Title: How to get from Sustainability Insights to Process Action
In this third blog post on BPI for Sustainability, I am sharing how SAP Signavio Process Manager and SAP Signavio Process Intelligence can be leveraged to put sustainability insights into process actions. To illustrate this use case, I am taking an example relating to the people side of sustainability, in particular the risk for incidents of child, forced or compulsory labor. Human rights breaches can lead to irreparable reputational damage, and thus poses a significant risk to businesses.
The key take-aways from reading this blog post are:
1) understand how SAP Signavio products can support your business in putting sustainability insights into process action
2) key steps for achieving the above in this process.
There are many more important topics besides carbon emissions when we look holistically at sustainability. Therefore, I am focusing on the people side of sustainability in this blog post. Human rights due diligence is an obligation of companies and is a central component of the UN Guiding Principles. It relates to the impact of corporate activities on human rights and, thus, on society more broadly.
According to Bettina Grabmayr, Head of Institutional Relations at EcoVadis, human rights due diligence falls within the scope of a company's holistic sustainability management. Human rights due diligence can present risks and opportunities regardless of the laws in place – particularly in consumer-facing industries like retail, fashion, electronics and more. If done effectively, the implementation of human rights due diligence is likely to create value for companies through the avoidance of reputational damage from human rights breaches.
This is where Business Process Intelligence can play a key part in connecting insights to process action by understanding which processes impacts a specific sustainability indicator.
Steps from Sustainability Insights to Process Actions
In addition, Business Process Intelligence can support businesses to:
Get full visibility into your process realityand uncover opportunities to improve sustainability indicators
Design and simulate target processes to optimize - based on sustainability factors (triple bottom line)
Monitor sustainability performance and instill a collaboration culture on continuous improvement for sustainability
Use case example: Global Fashion Retailer battling human rights due diligence
For our use case we step into the shoes of a global fashion retailer. This is a fictitious scenario as for all use cases I describe in my blog posts on this topic.
The business has been continuously in the press, being accused of child and forced labor in affiliated factories, causing significant reputational damage to the brand. The company is determined to take decisive actions to ensure that human rights breaches do not occur in any step of their value chain. They see it as one of the key success factors for safeguarding their brand value.
To identify a potential breach, the company implemented an early warning ticketing system that collects information about any potential case of human rights breach and feeds into their sustainability management system where KPIs are monitored.
The challenge for the business is that they have no visibility which of the processes in their value chain have an impact on this KPI and have no transparency which of their different operations globally are conform or not.
The company assembles a team to investigate the insights gathered and recommend actions the business should take in ensuring that there are no human rights breaches across their entire value chain.
In a first step the team consisting of process owners, sustainability experts, and business analysts scan the company’s’ process landscape to identify which processes have an impact on this metric. Since the team is spread across the globe, they use the collaboration functions within SAP Signavio Collaboration Hub to keep track on their work to identify the right processes.
SAP Signavio Process Manager - Identify impacted processes and design process improvements
Once the team identifies an impacted process, it maintains an attribute at the process and/or individual process step level. This attribute defines that this process has an impact on the metric Sustainability->People->Risk for child->forcelabor (as defined in the World Economic Forum sustainability framework) which is a one-time effort. Moving ahead, teams would run a report on all processes to list the processes and or process steps that have this attribute maintained. This is a standard way to do process impact analysis.
The team further analyses the selected processes to define what changes they recommend. After a few iterations the team decides that the best way to manage the human rights due diligence challenge is to introduce a new mandatory step in the impacted processes.
Based on the advice from their sustainability experts, they recommend the use of an external service from to conduct forced labor due diligence in the relevant sourcing and procurement processes as well as to include this in the operational supplier evaluation process. This established service is called CUMULUS Forced Labor Screen™ - provided by the company Verité.
Based on the team’s recommendation the business implements the changes to the processes and systems. The shock comes a few weeks later when the sustainability management system is still showing a red warning light on the same KPI.
The process change has been rolled out to over 26 different locations and several business units. Enablement and trainings have been provided to ensure that the new processes are followed as intended. There seems to be a problem with the process conformance, but the team has no clue where the issue might be.
As the team has firsthand experience with process mining in SAP Signavio Process Intelligence, they decide to mine the two main processes that could cause the issue. They mobilize a new team with the required experts and within a few weeks, the team has the detailed insights from their process mining exercise. Where the initial investigation has been focused on process conformance.
SAP Signavio Process Intelligence - Check Process Conformance
The team’s investigation shows that one process variant, accounting for over 30% of all, is skipping that crucial process step of the due diligence check, hence not conforming to the designed process. The team drills down further and uncovers that this process variant is performed in two locations only. Equipped with these insights the team consults with the line of business owners on how to tackle the issue. Knowing that adherence to processes has been a continuous challenge in these locations, the business decides to change the process and make the forced labor due diligence step a mandatory activity before a case can be further processed in the system. While this requires additional implementation efforts, the business is certain that this is the right option as the opportunity costs for continuing to breach human rights issue by far outweighs the costs for this process change.
After the implementation of this last process change the team is happy to observe that the KPI now shows green, and the early warning ticketing system has seen almost no new submissions.
Furthermore, the process mining exercise provided the business with additional insights to further improve the process. Several other process improvement projects have since been kicked off.
In our use case we have seen the steps the fashion retailer has done to come from insights to process action:
Understand which processes have an impact on the specific sustainability metric
Analyze the process for improvement potential and design the desired state
Implement and continuously monitor the process performance
Execute a detailed process mining exercise to understand process conformance
Optimize the process further to ensure sustainability KPI’s are met
What the world needs most to make sustainability a reality is real process actions that move businesses towards the ambitious sustainability targets that they must achieve. To achieve this, businesses must connect insights to process action by understanding which processes impact a specific sustainability indicator. From there onwards, the standard cycle of managing business processes begins – design and simulate, improve and rollout, continuously monitor and analyze. This is what SAP Signavio Process Transformation suite is doing best.
Stay tuned for my next blog post, where we will discover how we can use SAP Process Manager, SAP Signavio Governance and SAP Process Automation to help businesses with regulatory compliance.