Business Transformation is a fundamental change in the way your business is conducted, in order to adapt to changing market conditions. Digital Transformation initiatives hold great promise for organizations striving to compete in the digital age. But the challenges facing such initiatives are enormous. According to Gartner:
“Business operations are not changing speedily or radically enough. One-off, large-scale strategic business transformation initiatives often fail, as do over half of all efforts. Organizations need a new way to change.”
– Bruce Robertson, Executing on Business Transformation While Building a Highly Adaptive Enterprise Primer for 2016
Why are digital transformation initiatives so rocky and prone to problems? To answer that question, let’s understand the process of a successful transformation. Gartner recommends adopting a Pace-Layered Application Strategy. This strategy achieves change via three types of systems:
- Systems of Innovation: Systems that provide the ability to experiment and prototype. In this stage, where applications are in their infant form, there is much trial and error. Only one among several prototypes may succeed, and can graduate to the next stage.
- Systems of Differentiation: The successful prototype is deployed into production on a small scale, handling a modest segment of the business, for example 3-4 processes. Here is the opportunity of ‘differentiating’ systems to prove themselves in real-live scenarios, and thereby differentiate the business from its competition.
- Systems of Record: After proving itself on a small scale, the application is ready to be deployed on a large scale to the entire organization. This can take place on systems of record – systems which can handle large volumes and organization-wide deployment. If implemented smoothly, the application has the potential to achieve its end goal – full digital transformation.
This stages of transformation then look like this:
There are several types of systems which can handle full scale rollout (the 3rd stage). These include systems like ERP and CRM. Some of these systems, are partially appropriate for the 2nd stage. But none of these systems is built for the type of experimentation and innovation of the 1st stage. Once the layers are split across too many systems, much can get lost during the transition from stage to stage, causing problems which threaten the entire initiative.
And that is a major reason so many transformation initiatives fail – the lack of a system which can orchestrate all three layers of the Pace-Layered model.
Analysts have identified BPM software as one of the only types of system that can orchestrate ALL THREE layers. For example, in Gartner’s recent paper on Systems of Differentiation: Building Applications That Provide Competitive Advantage BPM software is identified as a tool of choice for developing the most powerful options for systems of differentiation, the critical second stage. Some BPM suites, including PNMsoft’s, excel at the 1st and 3rd layers as well (as we will demonstrate below).
In consequence, organizations that are motivated to achieve a successful transformation, would be advised to select a BPM software suite which can facilitate it.
Digital Transformation with PNMsoft BPM
At PNMsoft, we’ve had diverse experience assisting and leading successful transformation projects. Our BPM software enables businesses to work through the three stages of transformation. This is a combination of the software itself, and our unique project methodology.
Here’s how it works:
- Sequence, our BPM software provides a Dual View interface, where Business Teams can collaborate with IT teams to model and build application prototypes. Teams can experiment, testing ‘what if’ scenarios, and quickly assembly an MVP (Minimum Viable Product). Our teams use a BPM methodology we’ve called Evolutionary BPM to achieve quick iterative improvements on the MVP, building toward the second stage.
- Sequence BPM applications can be quickly deployed to a segment of your businesses, optimizing and automating an achievable set of processes. At this stage, you’ll be able to demonstrate how the application differentiates your business from competition and justify wider roll-out.
- Sequence includes patented architecture which enables it to be rapidly scaled up for handling high volume use for some of the largest organizations. At this stage, Sequence can become your business’s transformation engine, reinventing hundreds of processes and impacting the work outcome for a majority of business units across an organization.
Our customers have come to recognize that they can transform operations using both our unique technology and methodology. AutoNation, a leading US automotive retailer, is a case in point. There, we’ve successfully led a transformation initiative which has enabled AutoNation to change the way it conducts its business. The following Case Study describes just one part of this wider initiative, showing how AutoNation transformed customer experience and saves over half a million USD in costs annually on its F&I Cancellation processes.
AutoNation Transforms Business Processes for its Shared Services Center and Franchise Stores
AutoNation is the largest automotive retailer in the United States and recently sold its 10 millionth vehicle. AutoNation chose PNMsoft Sequence BPM suite to achieve a digital transformation. One of the processes involved in this initiative was the consumer F&I product cancellation process. Sequence has reduced the time it takes to cancel consumers’ F&I products to three days on average, a fraction of what it used to be.
AutoNation Saves Over $500,000 a Year in Labor Costs
Because of the faster turnaround, car buyers at AutoNation stores can now more easily use a refund from a canceled product on a trade-in vehicle as a down payment on their next vehicle.
“With AutoNation’s old system, in some cases, it took months to cancel consumers’ F&I products, in part because the system gave no reminders when the process was stuck at a step,” said Li Huang, IT director for AutoNation. “It was a drawn-out process that could hold up consumers’ refund payments.”
“On average, AutoNation receives 10,500 cancellation requests per month,” Huang said. “Now this process takes under three days.”
Huang reported that, “Sequence helps us reduce errors, increase control & visibility of process performance, save costs, improve customer experience, and reduce business process cycle time, making us more competitive.”
AutoNation is using Sequence to optimize several additional processes as part of its broader digital transformation initiative.