Digitalization initiatives promise high returns, but often fail because they are technology-driven and lack focus. With our business process anamnesis (GPA), Gutmark, Radtke & Company offers a structured procedure with which our clients can answer essential questions themselves about the focus of such an initiative. On this basis, it is possible to decide whether and where a digitalization project makes sense.
The digital transformation of operational processes enables companies to increase their profitability. This can be achieved through a combination of web-based technologies, electronic document processing, workflow management tools, simple process automation through robotics and intelligent automated processing using artificial intelligence techniques.
For example, business processes can be made more cost-effective and customers can be acquired more easily, existing teams can process greater growth, and completely new business models can be created and new markets can be opened up quickly and cost-effectively.
However, these goals cannot be achieved through the use of new technologies alone. In our experience, digitalization projects often fail because they are driven too much by a technical solution selected in advance.
Measurable progress is only achieved when the right technology is used to solve specific problems in existing processes. To do this, however, processes must first be examined with regard to their technological weak points. And before this can be done again, existing processes must have already been at least partially optimized, since digitizing suboptimal business processes only delivers suboptimally digitized results. Overall, it's a complex process, but one that also promises high returns - if approached with focus.
It is therefore all the more important to start a digitalization initiative with defined objectives and a clear focus. This results in three core questions that must be answered before such an initiative:
And this is exactly where our business process anamnesis (GPA) in. Gutmark, Radtke & Company offers a structured process to answer these questions - which our clients can implement themselves. Once goals, potential and focus points have been clarified and the business case has been created in this way, the digitalization initiative can be started.
With our GPA approach, we provide companies with a procedure with which the success drivers of such initiatives can be identified based on their own expertise and therefore without external help as part of an internal preliminary study.
The goal of our approach is to launch a digitalization offensive with a clear objective and set priorities that have been organically defined within the company. To do this, we suggest an approach along the following six steps. Our recommendation here is that this project is controlled centrally by a single project manager who can also carry out a significant portion of the effort.
What goal should the initiative pursue? Typically it is about shortening throughput times, increasing quality or reducing process costs. The determination of the success metrics required for step (6) also depends on the definition of the goal or goals. For example, the goal of improving quality can be operationalized by reducing coordination differences, customer complaints, revocations of credit applications or errors in reporting. This information must then be obtained later.
The process map is a classic form of representation that makes it possible to show a rough structure of the architecture of core, management and support processes. For the area under consideration, for example the application process for a banking product or risk reporting, the rough processing steps can be presented in this form. In the next step, this form of representation serves to structure the viewing area. In the case of a loan application process, such a process map shows, for example, the essential application steps from the acceptance and review of the application to obtaining external information, keeping track of records and the credit decision through to payment. There are also management processes such as the distribution of load balancing requests and support processes such as financial security or fraud checking. Ideally, such a process map already exists in the company so that this step is no longer necessary.
Based on the process map, the relevant rough process steps can now be identified that require a more detailed consideration - or irrelevant steps can be excluded in order to reduce the scope of further work. The objective set at the beginning is helpful here. A process step that, for example, has no discernible impact on the quality goal can be excluded here, as can a process chain that deals with an irrelevant product. For example, a compliance check against sanctions lists that is already performed in a high-performance machine, with extremely rare manual post-processing, can be ignored depending on the objective.
A more detailed look can now be carried out for the focus areas identified in the previous step. Ideally, the company already has a process register from which the relevant processes are taken directly. Otherwise, they can be collected, for example, through expert surveys. However, this is not a formal process mapping, but initially just a tabular list of the relevant processes for the purpose of further prioritization. For this purpose, the end-to-end processes are listed in the observation area. In the example of a loan application process, this could be the processes for processing loan applications (i) from comparison portals or from (ii) the company website, (iii) automobile dealers, (iv) electronics stores, etc. These processes can be listed and provided with a unique identification.
Based on the initially defined objective, the defined target metrics must now be collected for each process. In principle, key figures are useful here, which on the one hand reflect the criticality of a process and on the other hand depict its materiality. In the example of a loan application process, the criticality can be recorded, for example, via the respective processing time or the number of revoked loan applications. The materiality, on the other hand, can be represented by the number of applications or the loan volume applied for in the respective process. Depending on the metrics and technical availability, this data can be collected either technically or through expert surveys. These key figures initially serve to prioritize the processes and can be further refined in a subsequent project if necessary. However, the aim of this step is to supplement the list of relevant processes created in the previous step with information on their prioritization.
At this point, the company has a list of all relevant processes, including assessments of criticality and materiality. On this basis, a selection of a small number of processes to be initially considered can now be made. These processes should then offer the greatest potential for positive changes in the selected target metrics and at the same time be sufficiently material to make a noticeable contribution to the overall result. At the end of this process there is a selection of processes whose closer examination and, above all, optimization and ultimately digitalization promise high economic success. These further activities can then be implemented in a separate project if necessary.
The aim of the process presented here is to enable companies to carry out essential preparatory work themselves and, in particular, to set goals and prioritize independently of external influences. GRCO will be happy to provide a more detailed description of the required activities as well as templates for recording the objectives, the process register and prioritization upon request.
However, if it is deemed useful, we are happy to support both this survey and prioritization process and any subsequent project activities to map, optimize and digitize processes. We have extensive experience, particularly in the areas of risk management as well as credit and trading business, which we can make available to your initiative.
Gutmark, Radtke & Company (GRCO) is a management consultancy specializing in the financial services sector. Since 2001, we have been supporting our clients across Europe in implementing complex projects, particularly in the lending business and risk management. An important part of our work is always the analysis, optimization and digitalization of work processes, taking regulatory requirements into account.
For further information about our business process history, our company or how we can support you with digital transformation, please feel free to contact Dr. Benny Gutmark or Hans Radtke .