R2R, O2C, P2P, H2R, A2R, F2D, Q2C, MTO etc., and the list goes on. Processes, processes processes, all fundamental to successful business operations, all time consuming. Any break in the chain can cause costly disruption. Behind these processes sits a veritable army of human resources, quite often doing repetitive, mundane tasks but tasks that are necessary to “keep the lights on” even though they add little or no value to the end product, service, or customer experience.
More often than not, especially in large global corporations, these process chains are further complicated by a multitude of systems. Even though the business process may be the same, for example, recording a vendor invoice or paying that invoice, the execution of what is essentially the same business process can be a very different experience from one ERP system to another.
Joining-up Processes Efficiently and Effectively
Therefore, it comes as no surprise that companies have invested considerably in systems and process improvements over the years, trying to keep pace with growth while trying to free the business from systems limitations that shackle growth. With limited financial resources, however, the end results of these efforts have sometimes been underwhelming, resulting in simply treading water, with no great improvements to the processes or the user experience that delivers them.
To ensure continuing process excellence today, we need to take advantage of new technologies in the fields of Process Mining, Robotic Process Automation, Experience Data, and Machine Learning and Artificial Intelligence. These new technologies can truly release value at scale by reducing or eliminating ineffective processes, improving performance of mundane tasks through automation (such as period end tasks, for example), reducing errors and streamlining transactional operations such as customer account clearing, and the list goes on.
In reality, as we can see in the example above, a combination of technology will release maximum value from the perspective of process excellence. An integrated automation platform is needed: intelligent RPA, workflows, chatbots and the ability to capture the entire customer experience.
Automating the automatable
It may be tempting to consider automation only as a temporary, quick fix, band aid rather than a scalable solution. If looked at in this way, however, the longer-term cost of added complexity can outweigh the short-term benefits that companies hope to realize. Organizations aiming to maximize value recognize the need for a more sophisticated approach to automation. The move to process excellence through automation needs to consider people, process and technology holistically within the overall transformation imperative.
So, how ambitious should companies be when it comes to automation? Gartner’s Top Strategic Technology Trends for 2021 identifies “hyper-automation” as one of the strategic trends. According to Gartner, hyper-automation is “the idea that anything that can be automated in an organization should be automated.”
Gartner have estimated that automation has the potential to save 25,000 hours of manual work in finance departments and that almost 70% of routine work currently done by managers could be fully automated by 2024.
Automation for strategic growth
Perhaps it is not surprising that most companies tend to favor a risk-averse approach to adopting new technologies, starting small, investing time and effort in proofs of concept, before a more widespread adoption is rolled out across the organization.
Initial automation efforts have focused heavily, if not exclusively, on the automation of low-value repetitive tasks, with the objective of releasing value in terms of cost savings and increased productivity. Although the apparent “quick-fix” point solution can seem like the best short-term approach, it can add to a company’s technical debt due to:
Underlying poor quality data,
inefficient processes downstream of the automated step,
different requirements across businesses, geographies and systems, and
failing to take into account the full array of integrated technologies supporting the end-to-end process.
McKinsey research has shown that, “successful automation adopters assume a mind-set that focuses on growth… organizations that meet automation goals are far less likely to view automation as a means to reducing costs and more likely to see it as a strategic lever.”
Therefore, a longer-term perspective of automation as an important lever of strategic growth, rather than merely an expedient cost reduction methodology, will yield a better return on the technological investment.
McKinsey further state that, “growth-minded organizations [that] focus on maximizing total returns and not just cost savings … are also far more likely to take an end-to-end ecosystem view.”
SAP’s Vision for Intelligent Automation
This aligns well with SAP’s vision for the Intelligent Enterprise, which is centered around helping customers to transition from the older technology to a new, intelligent, end-to-end, S/4HANA platform capable of providing ecosystem-wide, real-time business support.
Having a single platform for all enterprise operations is absolutely key in laying the foundation for scalability, flexibility and agility, with the technological capability to foster automation across the enterprise built-in to the core of the ERP system.
As economies have become more and more digital, the explosion of data has highlighted bottlenecks in the transactional interactions between users, business processes and systems - manual interactions and workarounds are more prone to error and/or inefficiency than ever before.
The single source of truth data model in S/4HANA simplifies the process challenges massively while, at the same time, delivering a technological environment enabling companies to maximize their end-to-end automation potential.
SAP has a well thought out, end-to-end, automation strategy, as opposed to a siloed approach of applying automation “band-aids” to various business processes. This end-to-end approach will result in increased value across a number of key areas in Finance and beyond: