Do Not Automate Inefficiencies

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In this age of digital transformation, many businesses have or will invest a lot of money in technology. But how are they planning to use this technology? In as much as automation is a key word in digital transformation conversations, NEVER use technology to automate inefficiencies. What does this mean?

Businesses have processes and people, all working in a certain way to achieve the set objectives. Some of these processes may be inefficient. For example, looking at an invoicing process, the following may be the inefficient activities:

  • A supplier supplies goods and presents a hard copy invoice.
  • The receiving clerk types the invoice details into their ERP system to initiate the processing of the invoice.
  • The invoice details are processed by the Finance team in the ERP (including matching system data to details in hard copy invoices to catch data entry errors)
  • Once the processing is done, the payments are made.

The business could decide that capturing data from hard copies is tedious and prone to errors. They, therefore, decide to invest in scanners and OCR systems. The receiving clerk scans the invoices received from the supplier and their details are picked by the OCR and loaded onto the ERP system for processing. But is this an efficient application of technology?

In as much as the possibility of data entry errors could have been reduced, the process is still inefficient. The business has, instead, given systems the same inefficient work that was performed by humans.

There is a lot of underlying process review and re-engineering that needs to be done when venturing into automation. Mundane steps need to be eliminated and people need to be trained.

In the above invoicing process, for example, why do we need the hard copy invoices? A supplier module can be created and connected to the business’ ERP for regular suppliers to use at their premises. A standard invoice template can also be agreed upon. As such, suppliers can raise invoices from the module on their end and these can be automatically pushed to the company’s ERP such that by the time goods are received, an online invoice is already captured in the system. Once the goods are verified, posting of the invoice can proceed.

In this case, scanning, OCR, data capture errors and the tedious task of cross checking hard copy versus captured invoice data are eliminated. This also reduces time taken to complete the end-to-end process of receiving and paying for goods.

Before embarking on investing in that costly system or infrastructure, assess your current state. As ITIL4 recommends, start where you are and focus on the outcome expected from your operations. Simplify your processes before automating, and make them practical. It is all about optimizing your operations and delivering value to end users and customers.

Do not forget to invest in the people aspect as well – employees need training for them to understand and appreciate the new and efficient ways of working, and for them to support the automation process and tools.

Lastly, do not shy away from process and automation experts or consultants. You need all the expertise you can get to align your people and processes to your digital transformation initiatives.

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