Overview of Enterprise Digitalization Platforms in 2023 – Part 3
In this post, we look at the relevant trends for implementation.
Digitization is an intricate and complex area, so in several sections, we will take a general or summary look at the issues without claiming to be exhaustive.
Typification of enterprise digitization solutions
We cannot talk about significant differences in digitization products or platforms, but rather about emphases or guidelines.
It is a cliché, but true, that a larger organization is better off with the services offered by any digitization platform than with no process support, provided that the tool has been implemented correctly. A flawed, poor-quality implementation or an implementation without a concept puts the best tool in the world into the unusable category.
Digitization solutions can be divided into several categories based on their primary objectives:
- Process automation: Only the process runs according to a predefined set of rules, the data is usually transported as an attached file.
- Data integration: Not only does the process run, but data from collaborating systems are also automatically fed into the process, mostly appearing on forms, for further use or to provide information in the form of reports.
- Full digitization of the business process: In addition to the process steps, the entire data cycle, and the operations with the data, in short, the business logic, are implemented.
- Transitions between categories can be diverse, without strict boundaries. Each of the three classes has its efficiency and return on investment, it is worth examining where and for what challenges they work well.
Workflow planning solutions
The automation of process steps is nothing new, the significant innovation of the mid-2000s was the emergence of workflow scheduling systems, which came with the message that a business organization could design its process control without developer intervention.
These systems are highly mature today, but the breakthrough has not yet been achieved. Again, the question arises: why has this happened?
Of the many reasons, the dominant finding is that the colleagues involved in the process are generally not process architects. Organizational leaders, who have an overview of the whole process, rarely set out to draw workflow solutions. These initiatives tend to die out after the enthusiasm that accompanies their introduction. The organization moves towards the weakest resistance and, leaving the workflow system aside, continues to operate processes along the familiar lines of email, Microsoft Excel, Word, and PowerPoint.
Where the wall is successfully breached, and the organization embraces the process control tool, the background support follows the same success criteria as any other IT tool. Processes are rethought or re-engineered by colleagues skilled in process building, the staff involved in implementing them are provided with a solution and the associated training, and the process mapped in the system has an owner who coordinates the work and supports users.
If we limit digitization to the process level, we find a nearly linear correlation between efficiency and the organizations’ size. The more users there are, the better the process automation meets the expected efficiency. It is not easy to quantify, but for a more significant number of users (hundreds – thousands) for a single process, the return on investment will be demonstrable. In contrast, it may be questionable for a few tens or hundreds of users. Well-known, internationally listed process control systems are not designed for corporate operators in national or regional economies. A few large companies with a few comprehensive processes fit the target market for these systems, and if the required solutions’ prices are considered, this statement is even more true.
In the Eastern European region, the processes of more minor, at most, medium-sized companies are no more straightforward than those of prominent multinational players. Although the volume of tasks and the number of people involved in the process are lower, this tends to mean that the colleagues involved in the process have to deal with proportionally more complex issues during their daily work. In short, fewer resources are needed to deal with the same complexity. This is precisely what is emerging in the digitization needs.
Complex, data-intensive business processes need to be efficiently digitized at an affordable cost for the company. The requirement specification limits the solution options, but there is room to evolve and move forward. And the devil is in the details…
We will succeed in enterprise digitization, when we understand the business process in depth, we automate it at the highest possible level. We need to eliminate manual steps that machines can execute, especially manual data entry, where the same data is entered multiple times, maybe in two or three systems and auxiliary tables. To do this, it will be necessary to understand the business process in depth and to fit the digitized business logic into it. The integration tasks are on the other side of the coin, so automated interfaces read and write data whenever possible, rather than burdening human resources with the job. Let’s not think of significant issues, just eliminating redundant data entry rounds will result in considerable resource savings.
A practical example of digitizing a process
Let’s look at a practical example of enterprise digitization through a procurement of goods process.
The company in the example has an ERP and a warehouse management system, but the two operate in parallel without digitally linking the processes.
Initial state: A Purchase Order (PO) is created in the ERP system and sent to the supplier in PDF format by an intermediary email. The supplier confirms the Purchase Order with the expected delivery dates. The email confirmation is forwarded to the warehouse. The warehouse management system records the expected delivery from the PO data and the supplier’s confirmation letter. According to the confirmation, the supplier fulfils the order in two instalments, for which two delivery notes and two invoices are issued and sent to the customer. After each delivery, the warehouse confirms in an email to the administration team that the process has been completed. Invoices and delivery notes received after delivery are manually reconciled with the PO issued. This is a typical, partially digital process with many manual steps and time-consuming maintenance of Excel spreadsheets to help track the process.
Let’s look at this by integrating it into a digital platform. The platform automatically receives the generated PO and, depending on the process, are either sent to the supplier with a control step or directly. From the supplier’s email response, the administration team generates an electronic task for the warehouse. The recording in the warehouse management system is automatic or semi-automatic, depending on the depth of the integration. Documents managed during the delivery (delivery notes, other documents) are stored on the digital platform. The system logically links all the documents generated to the Purchase Order (PO) data, checking the numbers. The human checks built into the process are created as electronic tasks, with accurate log information on their execution. In the case of a standard run, if the numbers match, the invoice and stock data for the purchase are transferred to the ERP system without further human intervention, and the sub-operations can be carried out within the ERP system based on the transferred data.
Results and success criteria for enterprise digitization
What have we achieved through digitization? Process security, data security and significant savings in human resources. A skilled workforce can focus on the quality of the process because it is freed from the burden of time-consuming manual data entry and repetitive re-entry.
The success criteria are provided by a deep understanding of the process and the professional integration of the systems involved.
We have deliberately not mentioned products in these articles. The success of digitization is not product-dependent, there is no magic potion, and the task is complex and requires close attention. Success depends much more on the selected vendor’s professional attitude, professional knowledge, experience, and commitment.
Digitization is, first and foremost, a way of thinking about managing and using corporate data. It is worth taking it one step at a time, implementing as much as the organization can absorb.
Do you have questions about digitalization in your company, optimizing existing solutions or introducing new systems?
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Overview of Enterprise Digitization Platforms in 2023 – Part 3
Author: Zsombor Bereczki
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