Automated Business Processes (Explained in One Handy Guide)

Dive into the world of process management and discover how digital transformation and automation are reshaping business landscapes, driving unparalleled efficiency, and unlocking new levels of productivity. Learn from real-world examples and expert insights to understand the critical steps and technologies propelling businesses into the future.

How to Manage Business Processes

Process management is closely linked to the field of change management because of its broad scope. In process management, we focus on the entire process, not just individual tasks. Moreover, when discussing process management, we must consider continuous optimization. It's like a journey toward perfection, a goal we will never fully reach but continually strive for.

Why Process Matters

William James, the late American philosopher, psychologist and Harvard professor, said:

"The more of the details of our daily life we can hand over to the effortless custody of automatism, the more our higher powers of mind will be set free for their own proper work."

The subject of this reflection was habits, which are essentially just repeatable processes. If we realize that creating business value involves steps from A to Z, we can use less mental effort, as we'll automatically perform our tasks efficiently.

Reengineer The Process - Ford Motor Company

Let me tell you a story that will help us understand how to manage processes properly and why it's so labor-intensive, but in the end, it provides us with unimaginable economic results. IT helps us make our processes faster, but often this requires us to reengineer the process completely, breaking old rules. This situation happened in the late 1980s at Ford Motor Company. Their managers began examining their processes and found that the most inefficient one was ordering goods from vendors.

Before optimization, Ford employed about 500 accountants to manage this process.

Here’s how it looked:

1. The purchasing department writes a purchase order,
2. Sends a copy to accounts payable,
3. When goods arrive, the warehouse sends a receiving document to the accountants,
4. The supplier sends an invoice to the accounts department,
5. Finally, payment is made.

At the same time, Mazda, an automotive concern, employed only 5 workers to handle the same process. Considering the scale of their businesses, we can say that Ford had 5 times more accountants than its competitor.

Ford optimized their process by implementing a single point of contact through a digital database and focusing on digital information.

1. The purchasing department enters the purchase information into an online database, which is sent electronically to the supplier.
2. When goods arrive, a warehouse worker checks the database to ensure the products match the purchase order.
3. If everything is correct, the software prepares the check, which the accounts department sends to the vendor, eliminating the need for invoices.

Initially, Ford's managers aimed to reduce the workforce needed for this process by 20%. The result of the invoiceless processing was a 75% reduction, cutting down the number of employees from 500 to 125! This exemplifies the purpose of process management.

Process Management Steps

There is a field of study called business process management, which helps explain process management steps. It's a niche area, but incredibly valuable for understanding how to manage processes effectively. Once you become aware of your processes, you can optimize them to be more productive and effective. To paraphrase, you need to identify your processes first.

Here are five examples of repeatable processes:

• Paying recurring invoices,
• Publishing on social media,
• Creating monthly SEO reports,
• Conducting cyclical sales follow-ups,
• Writing articles.

Absolutely, I can describe the outputs/results of these processes, but identifying the steps, inputs, and suppliers is more challenging. This brings us to the second step of process management: process discovery. Here are a few options for discovering your processes. You can simply ask how each process is done and write down the steps in bullet points, or you can take a more advanced approach.

Process Identification & Discovery

The most popular way to map a process is a flowchart. A flowchart is a logical diagram that uses graphical geometric shapes, where, for example, a rhombus always indicates a decision point.

A more advanced method, originating from Kaizen and Total Quality Management (TQM), is called SIPOC. This acronym stands for Suppliers, Inputs, Process, Outputs, and Customers. It helps provide a comprehensive overview of the process from start to finish.

At the enterprise level, process mapping is done using BPMN (Business Process Model and Notation). BPMN is a global standard language for business analysts, offering a variety of symbols that allow us to map even the most complex processes.

Process Analysis & Redesign

Once we have written down the map of the process, we can move on to the next step: analysis. At this stage, our goal is to identify weaknesses in the steps and research their impact on inefficiency. When we agree that certain steps are wasting our time, we can proceed to the redesign phase of process management. IT supports businesses in becoming more efficient, and the same principle applies here.

We should bring together the following key stakeholders:

1. Business owner,
2. IT director,
3. Process owner.

The main goal of this meeting should be to brainstorm ideas on how to optimize the process, drawing on business knowledge, IT expertise, and operational input from the process owner.

Process Implementation & Monitoring

In the fifth step of process management, it's time for implementation. Often, optimization involves new IT technology, as seen in the Ford example with their digital database. This is the time to prepare everything for change management.

At the end of our process management steps life cycle, we need to monitor and control the flow of the new version of the process:

• How does it work?
• Does the performance of the process meet our expectations?

Business Process Automation

Daily business challenges and the pursuit of growth can often lead us to overlook our technological legacy in processes. On the profit and loss dashboard, you might see year-over-year growth, which is paramount. However, if your financial intelligence suggests focusing on savings, it might be time to pause for a moment and sharpen your axe.

In the 18th century, the Industrial Revolution began. Companies that specialized in cotton spinning previously worked on wooden mechanisms and did this manually.

Based on research, in 1775, craft workshops could create, for example, one t-shirt in a day. Thanks to the steam engine, 100 years later, the same workshop could produce 300 t-shirts in the same period of time. Thanks to business process automation, the performance of weaving increased 300X. This is why process automation is so important.

Business process automation provides a brilliant increase in efficiency. You might think it's not the right time for you to automate processes and decide to wait for a better moment, but if your competition has started implementing the latest IT technologies, they are becoming much faster. In the famous fable, the tortoise wins over the hare because he was consistent. What if we could combine both the consistency of the tortoise and the speed of the hare?

How to Automate Business Processes?

It is said that the first automated business process was born when people wrote a single line of script around the middle of the 20th century. Regardless of how you view it, computers and bots can perform tasks that you delegate to them, and to this day, people continue writing scripts to automate business processes.

The next phase in the development of automated business processes is robotic process automation (RPA).

1. The user demonstrates the process workflow on the GUI through mouse and keyboard activities.
2. The robot performs tasks by repeating these actions directly.
3. Robotic process automation can manage a lot of data across different applications.

Thanks to today's tools as Zapier or Make, you can integrate any type of SaaS with another (as long as they have an API). With just a few clicks and without writing any code, you can create a bot that automates your business processes. Additionally, from the front end of the site, you can create a user interface to manage your automated business process operations.

AI, including Large Language Models (LLMs) and Large Action Models (LAMs), is transforming business process automation. Integrating these technologies offers unprecedented efficiency and adaptability, driving innovation and growth in businesses.

Business process automation statistics

Every year, Gartner prepares a list of top strategic technology trends that IT leaders should consider reinvesting in, as these trends help businesses drive key objectives. In 2022, one of the technological trends was hyperautomation, which involves large-scale business process automation.

As reported by UiPath on their blog about business process automation statistics at Spotify, since 2018, Spotify has been building a robotic process automation center of excellence. They have been training business developers to use automation tools and identifying new metrics to validate ROI.

• Thanks to 100+ bots,
• they have saved over 45,500 hours,
• and released 24,000 hours of capacity!

Another significant example of enterprise automation is Heineken. With 25 million of its beers served daily across 192 countries, their vision is to automate everything that can be automated. Their goal is to save 1,000,000 hours by 2025. Currently, they are saving over 14,000 hours per month and have implemented 140+ automations.

Should We be Scary About our Jobs?

As more and more processes are automated, the question arises: should we be worried about our jobs? History shows us that we shouldn’t. One of the biggest examples of business process automation is the invention of the tractor, which eliminated about 10,000,000 farm jobs in the US, but those jobs shifted to the manufacturing sector.

A similar situation could occur with business process automation. The major concern is the modern equivalent of gold in the 22nd century: data. Advanced AI algorithms, which can automate complex processes, rely on data to learn, and the largest enterprises possess the most data.

This advantage could allow corporations to deepen their monopolies. If their goal is to maximize profits (increase profits/employee KPI), they could potentially reduce the number of employees at a rapid and alarming rate.

New inventions always replace human hard work, but it is in our nature to continually find better and more useful technology to take over these tasks. Is it an endless loop, constantly redefining what hard work means for us? Let me leave this question open.

What is certain today is that we can create scripts to perform digital work for us, even without programming knowledge. Thanks to this, we can automate our repetitive tasks and focus on creative, more business-valuable duties.

Algorithms are becoming smarter every day.