The Most Common Business Process Improvements From Digital Transformations
Summary
TLDRIn this video, Eric Kimberling, CEO of Third Stage Consulting, explores key business process improvements driven by digital transformation. He highlights the automation of manual tasks, centralized data visibility, improved financial consolidation, and predictive analytics. Kimberling also discusses the benefits of machine learning, artificial intelligence, and shared services models in enhancing operational efficiency. He emphasizes that accurate data management is crucial for leveraging these technologies. The video aims to guide organizations on maximizing value from their digital transformation initiatives.
Takeaways
- 🔄 **Business Process Improvement**: Digital transformation often aims to improve business processes, with automation being a key driver.
- 🤖 **Automation of Manual Processes**: The first step in digital transformation is typically automating repetitive tasks to increase efficiency.
- 📊 **Centralized Visibility**: Digital technologies provide centralized access to information, which is crucial for better decision-making.
- 💼 **Financial Consolidation**: Improved financial consolidation is a common goal, aiming to streamline financial reporting processes.
- 🛠️ **Shared Services Model**: Larger organizations benefit from consolidating redundant functions into a shared services model for cost savings and efficiency.
- 📈 **Predictive Analytics**: The use of AI and machine learning allows for better planning and forecasting, improving business processes related to demand, manufacturing, and procurement.
- 🔗 **Supply Chain Management**: Advanced technologies help manage supply chain unpredictability, a critical issue in the current economic climate.
- 💾 **Data Management**: Effective data management is fundamental to leveraging AI, machine learning, and business intelligence for process improvement.
- 📚 **Resources for Transformation**: Third Stage Consulting offers resources like an annual digital transformation report and software rankings to guide organizations.
- 🌟 **Strategic Benefits**: Beyond incremental improvements, digital transformation can lead to strategic restructuring and innovation within organizations.
Q & A
What is the primary driver for digital transformation in businesses?
-The primary driver for digital transformation in businesses is the desire to improve business processes, which includes automating manual processes, enhancing visibility, and increasing efficiency and effectiveness.
Who is Eric Kimberling and what is his role?
-Eric Kimberling is the CEO of Third Stage Consulting, an independent consulting firm that assists clients worldwide in advancing through their digital transformation journeys.
What is the first and most common improvement organizations expect from digital transformation?
-The first and most common improvement organizations expect from digital transformation is the automation of manual processes across various functions and business processes within the organization.
How does machine learning contribute to business process automation?
-Machine learning contributes to business process automation by taking over highly repetitive and redundant tasks, allowing employees to focus on more strategic work and managing exceptions.
What is the significance of centralized visibility to information in digital transformation?
-Centralized visibility to information is significant in digital transformation as it reduces the time spent searching for data and provides real-time access, enabling better decision-making and insights into business operations.
What are some technologies that provide centralized visibility into business processes?
-Some technologies that provide centralized visibility into business processes include business intelligence tools like Microsoft's Power BI or Tableau, and enterprise resource planning (ERP) systems.
Why is improved financial consolidation important in digital transformation?
-Improved financial consolidation is important in digital transformation because it enhances efficiency, effectiveness, and accuracy of financial data, which is crucial for business value and regulatory compliance.
How does a shared services model contribute to business process improvement?
-A shared services model contributes to business process improvement by consolidating redundant functions across the organization, leading to time and cost savings, and a more consistent way of conducting business.
What role do predictive analytics and artificial intelligence play in planning and predicting for the future?
-Predictive analytics and artificial intelligence play a crucial role in planning and predicting for the future by providing better accuracy of data and tools to make sense of that data, allowing organizations to anticipate future outcomes based on past events.
Why is better data management considered a critical business process improvement?
-Better data management is considered a critical business process improvement because accurate data enables organizations to take full advantage of technologies like AI, machine learning, and business intelligence, leading to more effective operations.
What resources does Third Stage Consulting provide to help manage digital transformation?
-Third Stage Consulting provides resources such as an annual digital transformation report featuring best practices and lessons learned, and independent software rankings for various types of software to assist in managing digital transformation.
Outlines
🔄 Digital Transformation and Business Process Improvement
Eric Kimberling, CEO of Third Stage Consulting, discusses the concept of business process improvement as a key driver for digital transformation. He explains that organizations typically undergo digital transformation to automate processes, enhance visibility, improve efficiency, and deliver better customer and employee experiences. Kimberling emphasizes the importance of understanding the potential value that can be gained from digital transformation. The most common improvement organizations expect is the automation of manual processes, which can apply to various functions like marketing, sales, supply chain management, and inventory management. Technologies such as ERP systems, CRM, and machine learning are increasingly being used to automate these processes, allowing employees to focus on more strategic tasks.
📊 Centralized Visibility and Financial Consolidation
The script continues with Kimberling discussing the benefits of centralized visibility to information and improved financial consolidation as outcomes of digital transformation. Centralized visibility allows for easier access to real-time data, enabling better decision-making and insights into business operations. Financial consolidation is highlighted as a significant improvement, particularly for larger organizations that previously spent considerable resources on manual accounting processes. The efficiency and accuracy of data are crucial for business value and regulatory compliance, especially for publicly traded companies. Kimberling also introduces the concept of shared services models as a strategic approach to restructuring organizations for efficiency, where redundant functions like accounting, HR, IT, and procurement are centralized to save time, money, and ensure consistency.
📈 Leveraging AI and Data Management for Strategic Improvements
In the final paragraph, Kimberling explores the strategic benefits of digital transformation beyond incremental improvements. He mentions the use of predictive analytics, artificial intelligence, and other quantitative technologies that enable better planning and prediction for the future. This is particularly relevant for financial planning, demand forecasting, manufacturing, procurement, and inventory management. The script also addresses the importance of supply chain management in the context of current global uncertainties, where AI and machine learning can provide clearer navigation. Kimberling concludes by emphasizing the critical role of data management in digital transformation, including master data management and transactional data management, which are essential for leveraging AI and other advanced analytics tools. He suggests that accurate data management is fundamental to realizing the full potential of digital transformation. The paragraph ends with an invitation for viewers to access additional resources, including an annual digital transformation report and software rankings, to aid in managing digital transformations effectively.
Mindmap
Keywords
💡Business Process Improvement
💡Digital Transformation
💡Automation
💡Visibility
💡Efficiency
💡Machine Learning
💡Shared Services Model
💡Predictive Analytics
💡Supply Chain Management
💡Data Management
Highlights
Business process improvement is a key driver for digital transformation.
Digital transformation often aims to automate, provide visibility, and enhance efficiency.
Eric Kimberling introduces himself as the CEO of Third Stage Consulting.
Third Stage Consulting assists clients in reaching the third stage of their digital transformation journeys.
Automating manual processes is the first and most common improvement in digital transformations.
Machine learning is increasingly used to automate manual business processes.
Centralized visibility to information is a key improvement from digital technologies.
Dashboards and business intelligence tools like Microsoft's Power BI and Tableau provide centralized visibility.
Improved financial consolidation is a common benefit of digital transformation.
Shared services model can save time, money, and provide a consistent way of doing business.
Predictive analytics and AI help organizations plan and predict the future better.
Supply chain management is a critical area for improvement with AI and machine learning.
Better data management is essential for leveraging AI, machine learning, and business intelligence.
Master data management is a critical business process improvement for digital transformation.
Resources such as the annual digital transformation report and independent software rankings are valuable for managing digital transformation.
The importance of understanding the potential value of digital transformation for business process improvement.
Transcripts
business process improvement is one of
the biggest drivers for digital
transformation it's a pretty vague word
so what exactly does that mean what are
the biggest business process
improvements that organizations
typically see with digital
transformations that's what i'm going to
talk about here today
[Music]
my name is eric kimberling i'm the ceo
of third stage consulting we're an
independent consulting firm that helps
clients throughout the world reach the
third stage of their digital
transformation journeys and when we're
going through digital transformations
inevitably most of our clients that we
work with are doing it because they want
to improve their business processes they
want to automate they want better
visibility they want to be more
efficient more effective provide a
better customer experience better
employee experience manage their supply
chains better all those different
reasons why organizations go through
digital transformations so what i want
to do today is talk about the
most common business process
improvements as well as the business
process improvements that have the
greatest opportunity for business value
within digital transformation the reason
this is so important to understand is
that so you don't lose sight of the
potential value that you could be
getting out of your digital
transformation
[Music]
the first and most common improvement
that organizations expect to see in
digital transformations
is automating manual processes this is
oftentimes the first thing that comes to
mind when organizations think about
their digital transformations and it's
oftentimes the lowest hanging fruit it's
the easiest thing to address as part of
your transformation which is why it's
the most common
so when we think about automated
business processes and getting rid of
some of those manual processes that you
have in place now that applies to a
whole host of different functions and
business processes within your
organization it can apply to your
marketing automation the way you manage
and track your sales force your supply
chain management your manufacturing your
warehouse management inventory
management
procurement all those different
components of your business can be
automated and you can take away some of
those manual processes
those spreadsheets that you're using to
track data and manipulate data all that
stuff can go away and so you can start
to look at ways to get rid of those
manual processes so that your employees
can spend more time
managing exceptions and doing more
strategic work as it relates to their
day-to-day business processes
now if we look at any sort of enterprise
technology whether it's an erp system or
crm human capital management supply
chain management manufacturing execution
a lot of those different types of
technologies are starting to use machine
learning as a way to further automate
manual business processes so in other
words they're taking
highly repetitive redundant business
processes and using automation to
automate those processes and to do some
of the thinking behind some of that more
mundane work so that employees don't
have to manually transact all the stuff
that they're transacting today so for
example if you're in the accounts
payable department of your organization
instead of processing each and every
single purchase order that comes in it
may be the machine learning can learn
what the common normal purchase order
processing might be so you can process
those for payment and it also knows when
there's an exception or an anomaly that
needs to be flagged for human
intervention and that can eliminate 70
80 or even 90 or more
of the manual work that maybe humans
were doing prior to automation so this
is just one example of many that
organizations are doing to
enjoy the benefit of automation as one
of their key business process
improvements
[Music]
another key business process improvement
that organizations often realize from
their investments in digital
technologies
is centralized visibility to information
so rather than having to manually go
search for data go into different
systems or ask people or go look in
spreadsheets or manipulate data to get
the data you really want
now you can have centralized visibility
into a whole host of business processes
and outputs from those business
processes and this is something that can
be a game changer for a lot of
organizations not only because they're
spending less time manually going to
search for that data but because now
they have easier access and more
real-time access to that data and they
can make better decisions and just have
better visibility and understanding and
insights into what is making their
business run what's working well and
what needs to be improved some of the
specific technologies and functions that
technologies can provide in today's
enterprise technology space is the world
of dashboards and business intelligence
you look at tools like microsoft's power
bi or tableau those are two business
intelligence tools that can bolt on to
other systems to provide that sort of
visibility
you also have enterprise resource
planning or erp systems that provide
end-to-end business processes but also
provide centralized reporting and
business intelligence to consolidate all
the data being captured in their systems
and these are just two examples of the
types of technologies that are enabling
the sort of visibility
into enterprise-wide data
[Music]
another common business process
improvement is improved financial
consolidation which is partially based
on the efficiency gains that i've
already talked about but it's also based
on just being able to consolidate data
across the enterprise to get the
financial results that you need
and if you look at some of the larger
organizations out there in the world you
find that they spend a lot of manpower a
lot of horsepower on closing the books
every period whether it's every month or
every quarter every year
they have large teams of accountants
that are oftentimes doing very manual
processes and journal entries and going
to manipulate and find data that they
need to be able to provide that
financial consolidation so having that
efficiency and effectiveness and
accuracy to your data is important from
a
business value perspective and it's also
important from a regulatory perspective
too for a lot of organizations that are
publicly traded or have investors that
expect real time and accurate
information this can be very important
from a regulatory perspective as well so
financial consolidation and better
financial consolidation is one of the
more common business process
improvements that we see within
organizations going through digital
transformations
[Music]
now the first three business process
improvements that i've already talked
about are i'd call them more incremental
business process improvements they can
be very significant very material but
they're only scratching the surface of
what technology can do and what the
potential business process improvements
could be so now if we shift gears and
sort of work our way up maslow's
hierarchy of needs and get into some
more of the strategic
benefits from a business process
perspective
we can now start to look at real
innovative ways that we can restructure
our organization and one of those ways
is through a shared services model
larger organizations that have grown
through acquisition or organizations
that have multiple locations often in
times have built up
redundant competencies throughout the
organization in other words they have
multiple departments doing the same
thing and if they were to consolidate
those functions and have more of a
centralized shared services model they
could save time and money and have a
more consistent way of doing business
for example many organizations find that
functions like accounting hr and i.t
and procurement as well those are four
areas that organizations often find are
redundant throughout the organization
they're spending too much time and money
on people doing the same exact thing and
even though they may be doing the same
exact function they have different ways
of operating so what organizations are
doing in many cases is saying we're
going to move to a shared services model
where we're going to centralize and
consolidate our hr or i.t or our finance
department or whatever department it may
be and we're going to have a common
operating model we're going to use the
same tool set
we might reduce our workforce and and
have
less people doing more because you're
centralizing that function but that can
be a big game changer in terms of saving
time and money as well as becoming more
effective in the way they conduct these
business processes
[Music]
with the advent of predictive analytics
and artificial intelligence and other
sorts of quantitative
technologies that can help provide more
meaning behind the data that you're
capturing as an organization you're also
finding that organizations are able to
plan and predict for the future better
because they have better accuracy of
data and they have these tools like ai
and machine learning that can help them
make sense of that data and even
cast their minds forward to the future
to better anticipate what will happen as
a result of what's already happened in
the past that allows organizations have
better planning processes
so when you look at things like
financial planning or demand planning
trying to figure out what your sales and
revenue might be your manufacturing
planning your procurement planning
managing your inventory all the stuff
that requires you to make decisions into
the future before you have a hundred
percent certainty of what's going to
happen in the future that can be
automated and that can become
streamlined to become more effective as
a result of ai machine learning and
other sorts of enterprise technologies
that are providing that sort of
visibility another example that's
extremely relevant here in the 2020s is
supply chain management when you look at
broken supply chains and supply chain
bottlenecks and the unpredictability of
supply chains right now
having better access to data and better
tools like ai and machine learning can
help you navigate that uncertainty a lot
more clearly than if you didn't have
that tool set and quite frankly that's
why so many organizations are struggling
with their supply chains right now is
partially because of macroeconomic
disruptions but also because they don't
have the proper tools and data to help
them plan for the future so look to this
area as a potential business process
improvement that can be a total game
changer that can deliver a huge amount
of value in your digital transformation
[Music]
at the end of the day one of the
business processes that can be most
improved with the digital transformation
is just better data management and it
may sound sort of mundane and sort of a
back office sort of function or a real
technical function but if you think
about it the troubles that a lot of
organizations have are related to data
in inaccuracy of data
in some cases it's because they don't
have the right tool set to make use of
the data like the bi and the machine
learning and some of the other stuff
we've already talked about but on the
other hand it's also because the data
itself is not accurate in other words
we're not tracking data accurately we're
not putting in place the data governance
controls that are required to make sure
that our data is accurate and the better
data we have the better we're going to
be able to take advantage of ai machine
learning predictive analytics
business intelligence and some of the
other stuff i've already talked about
so master data management and overall
data management as a whole even
transactional data management is
something that can be a critical
business process improvement that can
deliver a lot of business value and a
lot more effectiveness to an
organization as part of its digital
transformation so in addition to some of
these business process improvements i
have talked about i also want to share
with you a few different resources that
will help give you some ideas on how to
better manage your digital
transformation and also make sure you
get more business value out of that so
below i've included a link to a number
of different resources including our
annual digital transformation report
that features a number of best practices
and lessons learned from digital
transformations throughout the world as
well as independent software rankings
for all different types of
softwares that you might be considering
whether it's erp or crm or hcm or
whatever the case may be so i encourage
you to download that report as well as
some of the other resources that have
included links to below so if you found
this information useful and hope you had
a great day
[Music]
you
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