In 2014 I was at the CeBIT tradeshow in Germany and stopped by the Social Business Arena where SAP’s Sameer Patel was about to give a presentation.
When introducing Sameer and the topic he would cover, digital transformation, the host asked if digital transformation was something ‘new’ in social business. Maybe it was because he just didn’t know as, after all, back then the discussions about digital transformation were only a few years young (Capgemini’s work with the MIT Center for Digital Business was published late 2011 and led to the attention for digital transformation as we know it today – the term isn’t new). Maybe Sameer‘s topic needed some additional explanation for people who sat in and listened as after all, Sameer was talking in the Social Business Arena and, here, in Europe, social business was still the term of the day.
What You Will Learn
We haven’t digitized enough at all
Sameer replied that digital transformation is the next incarnation of what the promise of technology should have always been. And in his short presentation he showed how we had digitized but not digitally transformed how we do business, work, collaborate etc. You can read more about his presentation and some comments on it in a blog post I wrote about it.
As mentioned in that blog post there is still a lot of digitization and automation to do. Sameer obviously was right with his ‘we haven’t transformed statement’ as he often is when it boils down to business transformation. And he didn’t say that we had digitized enough.
In fact, we haven’t digitized enough at all and leave ample opportunities to optimize our business processes, customer experience, worker’s ‘satisfaction’ and numerous goals.
We waste huge amounts of time and money because we still rely on expensive manual processes and slow paper-based processes (hence the whole paperless discussion) in areas where we really shouldn’t and where we need to fix that situation rapidly by digitizing in a prioritized and strategic way (digitization being the transformation of information into digital formats and ultimately the digitization of business processes).
The same applies to business process automation, one of the essential aspects in many optimization and transformation projects. We obviously need digitization and business process automation in today’s business reality. However, just as we ‘digitally transform’ for a reason, we digitize and automate for a reason.
Business process automation and digitization challenges beyond business goals
The crux of the matter is to know what to digitize and automate. And that question isn’t just about a single process. It isn’t just about the now. And it most certainly isn’t just about the business goals alone.
Organizations, governments and society are and will increasingly be confronted with considerations that are less related with business and more about work, people and society as such.
The future of jobs: a digitization challenge for all
Whether we like it or not: the road of ongoing automation can’t be traveled with a purely micro-economic perspective alone. Employment and jobs matter and digitization, automation and the ongoing digitalization inevitably come with a human, macro-economic and societal toll.
We are facing a series of evolutions and inevitable regulations, discussions and tough decisions in balancing the mix between profitability and employment. Simply put: if automation and digitization are “limitless” one day and unless there is a dramatic and highly unlikely radical shift in our economic models, the obvious fact is that if there are only little jobs left, there are no sources of income for a majority of people and no income equals no spending and thus no business. As you probably know there are ample predictions about the impact of the continuous digitalization and automation. While no one can exactly forecast for sure and there are efforts to focus on more ‘value-generating’ jobs that require specific skills (but can’t compensate for the loss of jobs among people who aren’t necessarily able to acquire those skills, mainly in white collar functions), data such as the ones from the World Economic Forum’s “The Future of Jobs” report can’t be ignored.
A quote: “Across the countries covered by the Report, current trends could lead to a net employment impact of more than 5.1 million jobs lost to disruptive labor market changes over the period 2015–2020, with a total loss of 7.1 million jobs—two thirds of which are concentrated in routine white collar office functions, such as Office and Administrative roles—and a total gain of 2 million jobs, in Computer and Mathematical and Architecture and Engineering related fields”. And this is just one report and only a forecast for a period in which, if various technological forecasts prove to be right, the foundations are laid for a digital transformation economy that is expected to boom AFTER 2020.
Automation and digitization: look at the full value picture
Essentially there are some very basic questions to look at when deciding on where to digitize and automate (first). The answers are less easy. While each question and approach to look for the answers is valid and useful as such, it’s a least as essential to look at the full ‘value’ picture.
An example: while it becomes – technologically – possible to highly automate customer service with artificial intelligence and other technologies and this automation could lead to huge cost savings and efficiencies, they might erode the overall value equation if customers want to interact with human agents for more than just exceptional cases which can’t be treated in an automatic way. And nothing is more unpredictable than sudden shifts in customer preferences, even if today digital interactions and self-service are increasingly gaining traction. If the gains of such a highly automated approach are partially undone by losses, for instance on the customer experience level, full automation is not the answer. The picture becomes even more complex if we take the cost of opportunity into account. To stay with the example of customer service: it’s not a secret that customer service isn’t exactly always seen as more than a cost center.
Automation and digitization: it can be easy to decide where to start and how to get there in obvious circumstances (e.g. where the cost and slowness of manual and/or paper-based processes really get in the way of several goals) but it can be very hard if you look at the broader equation.
In next blog posts we’ll look at some questions to ask when deciding to automate and digitalize – or not (completely) – and at the full value picture.
Top image: Shutterstock – Copyright: Tashatuvango