This post is a follow up to my earlier post. It provides a method to improve processes by leveraging new technologies delivered in products such as HANA, SuccessFactors and others. A method to improve processes is important because organizations too often do not take advantage of advances in technology by rethinking, reevaluating, reorganizing, restructuring, reengineering, reinventing or refocussing (“7R’s”) their processes; instead building the same process in the new tool. Besides money down the drain for the organization and not achieving its vision; a user’s life is not easier or faster.
Before we start, let’s first understand what policy, process and procedures mean. Too often, when I goto a client site, they hand me over a sheet of paper that describes a procedure and call it a process. Let’s take a example where a person is driving to a new location. In this situation the person goes through the system of driving, but in order to successfully complete the task of reaching the destination they need a policy, process and procedure.
Figure 1: Policy, Process and Procedure
- The policy is the list of rules or the framework for the task. In the case of driving, the policy is the rules and regulations for driving.
- The process is the outline of how to get to the destination. Imagine the map showing the driver where they are starting and where they are ending.
- Finally, the procedure is the list of exact instructions for every turn the driver needs to take to arrive at the destination.
As you can see in this example the driver should have no problem reaching their destination (i.e. organization’s vision) efficiently. With all three elements of the task in place they can avoid hindrance.
Now that we have a clear distinction of what a process is, let’s take a process and explain how we could make it easier, faster and cheaper. I am a big fan of Blue Ocean Strategy (Authors: Renée Mauborgne and W. Chan Kim). One of the frameworks these authors created is the Four Actions Framework which can be applied to product strategy. I believe we can also create completely reimagined processes that can lead to competitive advantage to an organization by applying these principles of “Eliminate-Reduce-Raise-Create” to a process, .
Figure 2: New Value Creation
ERRC method may be applied to processes using the following questions –
- Eliminate: Which task(s) in the process can be eliminated?
- Reduce: Which aspects of task(s) in the process can be reduced?
- Raise: Which aspects of task(s) in the process can be raised?
- Create: What task(s) should we really be doing that adds value in the process?
By asking these fundamental questions, we can rethink, reevaluate, reorganize, restructure, reengineer, reinvent and refocus the process thereby building processes that are easier, faster and cheaper that will achieve the organization’s vision.
Have you ever used Uber? The first time I used Uber it was like magic. It uses all of the above principles to deliver value to the customer. Allow me to describe the experience and how the principles were applied.
I wanted to go to the airport (goal or vision). I tried calling a few cab companies and couldn’t connect with one of them. I heard of Uber and thought of trying it out. I downloaded the app while I took my dog out for a walk. I soon realized that I didn’t need to call for a Uber several hours in advance. I decided to take the “risk” and summon a Uber when I needed it, hoping (and praying) that I would actually get a car to take me to the airport. When the Uber driver responded, I was able to see his name, license plate and rating BEFORE I even saw my ride. The car was better than any taxi I rode on and I did not have to pay using my credit card when I got off. And the receipt was automatically emailed to me. I was later able to submit it easily without having to save a paper receipt and then scanning, etc. The cost to airport was around 100.00$ plus tip in a regular cab. Cost with Uber was around 50.00$. Needless to say, I will never ride a taxi again if I can help it.
Take a step back and observe how the process was reimagined in terms of easier, faster cheaper.
- Eliminate: No need for me to scan paper receipt.
- Reduce: No need to let Uber know several hours ahead of time that I need a ride.
- Raise: Savings of about 50.00$ in addition to the convenience.
- Create: A fully mobile experience.
SAP S/4HANA is delivered with predefined business processes and best practices. SAP calls this S/4 Reimagined solution (see my earlier post “Understanding SAP S/4HANA Finance with SAP SuccessFactors HCM Suite Cloud Deployment Solution” – Figure 2). What feature, functionality or technology delivered in the Product that you are implementing or enabling could lead to reengineering of a process thereby benefiting business and achieving its vision/goals?
Examples of how HANA can affect business processes –
- Eliminate: HANA eliminates the need for batch jobs, reconciliation process, etc.
- Reduce: MRP run times
- Raise: Fiori interface is intuitive and can be accessed from any device
- Create: Drill down from executive dashboards to transactional level, Real-time simulations
Examples of how SuccessFactors can affect business processes –
- Eliminate: Puts configuration in hands of business users and creates less dependency on IT
- Reduce: Single screen for all employee data reduces navigation
- Raise: Intuitive user interface requiring very less training
- Create: Docusign can be used to for digital signatures
How would you design a process applying this method? Start with these three pieces. 1. Process mapping as explained in Part 1 will help in understanding inputs and outputs, the process owners, KPI’s, etc. 2. Understand the capabilities of the product. What feature, functionality or technology delivered in the Product. Does it give you the power of innovations like cloud, mobile, IoT, etc. 3. Use the method of Eliminate-Reduce-Raise-Create in designing the new process. This would help you architect and build something the users would love.
Hope you enjoyed this post and thanks for reading it. It would not have been possible without help from the SAP community, so please feel free to reach out to me for any decisions that you might need guidance on with regards to SaaS ERP with S/4 HANA and SuccessFactors, I am happy to pay it forward. Please connect with me at https://www.linkedin.com/in/krismoturi so that you can get notified if topics like SuccessFactors and S/4 HANA interest you.