31 Mar The State of Process Automation in Small and Mid-sized Firms in North America
Over the past few years, I have had an opportunity to speak with dozens of small and mid-sized firms regarding their use of tools to increase employee productivity. The focus of those discussions has been in the area of improving business processes for clerical and knowledge workers, many of whom are using a computer for the majority of their tasks. The size of the firms I have spoken with range from 85 employees ($15 million in revenue) to 1,500 employees ($200+ million in revenue). I have found the results very interesting and worth sharing.
My interest in this topic stems from serving in executive roles in companies across various industries. I found that it did not matter if it was a technology company, medical services, financial services, office automation, software, or horticultural, the problem was the same. I was amazed at how much time and money was wasted on manual processes! I came to find out that the problem exists in all industries.
The most startling finding from my research is that, depending on the size of the company, somewhere between 80-100% of internal business processes continue to be performed manually using Paper, Fax and Email Attachments!
To understand this phenomenon, I think it is important to draw a distinction between the types of processes used by an organization.
Core Business Processes are often the first ones to be automated. Those core processes are ones that are critical to the company’s performance of its main function, and revolve around generating revenue (i.e. a pharmaceutical distributor- getting drugs to the patient and billing for it, or a financial services company- executing trades on behalf of its clients). These Core processes are small in number, but key to the organizations’ livelihood and financial health.
Non-Core Business Processes are all of those “Other” processes which, although important to the proper functioning of the organization (employees spend much of their day executing), seldom can justify automating due to the cost of currently available Business Process Management (BPM) tools. These non-core processes can be found in every department across every public and private organization.
Over the past several years, the research firm Gartner has performed surveys of CIOs asking about their key priorities. Year after year, one of the top (if not the top) response has been improving business processes. Other analyst firms estimate that the Business Process Management market is a US $16 billion market growing at 9% annually, with the software and services component being a US $5 billion segment growing at 15% annually. Not surprisingly, the majority of that money is spent with people like SAP, Oracle, and IBM automating those mission critical core processes for large enterprises.
Where’s the disconnect?
If this much money is getting spent on automating processes, why are small and mid-sized firms still performing the vast majority of processes manually? The issue revolves around those tools named above being way too expensive to use on anything that is not mission critical. Therefore, small and mid-sized firms are forced to use paper forms, fax and spreadsheets attached to emails.
Using these manual means to process form based processes causes all kinds of issues/problems/pains for both management and the employee. Things like:
· Which form do I use?
· Where do I find that form?
· Who do I give my form to?
· Where is my form in the process?
· What is the correct entry for that field?
· Why do I have to enter the same data in multiple forms?
· Did I submit that form? What did I submit?
· How long do I have to keep that form?
· How do I dispose of it?
Dealing with issues like those above wastes time of employees and steals valuable resources from the organization.
Some analysts estimate that implementation of BPM systems can save clerical workers, who perform repetitive tasks, as much as 35% of their day! Knowledge workers can save as much as 25% of their day from implementing such tools. The challenge is getting cost effective tools into the hands of managers of those small and mid-sized organizations.
If you are a manager in a small or mid-sized firm, I would be very interested in your perspective. I’d like to understand what has worked for you, and what does not. Please contact me at firstname.lastname@example.org