The Growing Importance Of Process To Digital TransformationThe Growing Importance Of Process To Digital Transformation May 8, 2018 2018 forrester Research, Inc. Unauthorized copying

The Growing Importance Of Process To Digital TransformationNew Goals, Tools, And Methodologies Reshape Process Initiatives

by Rob KoplowitzMay 8, 2018

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Key TakeawaysNew Goals for Process InitiativesCost reduction was long the major motivator for process initiatives. Now, process leaders have bigger plans: to tackle digital transformation and customer experience. But they face a big gap between goals and reality.

customer centricity calls for seamless front- And Back-end OperationsCustomer journeys have become a major driver of process design. Seamless experiences require process leaders to take a more holistic approach, paying careful attention to both front- and back-end operations.

Why Read This ReportForrester’s Q1 2018 Digital Process Automation Survey revealed that respondents’ businesses are changing in ways that require more digital automation than ever before. Application development and delivery (AD&D) pros must rethink their approach to process initiatives to support a level of automation most are unprepared to address. This report examines how process initiatives increasingly focus on digital transformation — and the approaches organizations are taking to accomplish their new goals.

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Table Of Contents

The Goals Of Process Initiatives Don’t Match Their Reality

Process Initiatives Target Digital Transformation . . .

. . . But These Initiatives Are Stuck

New Process Goals Require New Approaches And Methodologies

Customer Centricity Leverages Some Old Tools — And Some Important New Ones

Agile Methodologies Align With New Process Challenges

Low-Code Supports Decentralization Of Process Initiatives

Recommendations

New Process Goals Require New Skills, Methodologies, And Tools

What It Means

Process Automation Will Catalyze Deep Organizational Change

Supplemental Material

Related Research Documents

Crafting A Strategic Plan For Digital Automation

The Forrester Wave™: Digital Process Automation Software, Q3 2017

Traditional BPM Gives Way To Digital Process Automation

FOR APPLICATION DEvELOPMENT & DELIvERy PROFESSIONALS

The Growing Importance Of Process To Digital TransformationNew Goals, Tools, And Methodologies Reshape Process Initiatives

by Rob Koplowitzwith Christopher Mines, John R. Rymer, Allison vizgaitis, and Andrew Reese

May 8, 2018

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The Growing Importance Of Process To Digital Transformationmay 8, 2018

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New Goals, Tools, And Methodologies Reshape Process Initiatives

The Goals Of Process Initiatives Don’t Match Their Reality

How we think about process improvement is changing to address modern business concerns — including customer experience and agility — by automating end-to-end processes. Business processes span organizational structure and legacy technology investments that hinder end-to-end automation. Customers don’t care about these boundaries — they expect a seamless, efficient, transparent journey. To that end, process automation must be both a strategic and technical initiative.

Process Initiatives Target Digital Transformation . . .

Process leaders still place a high priority on digital transformation and customer experience as the current and future goals of process improvement initiatives (see Figure 1). Firms are shaking up how they think about process to match these emerging goals, resulting in new goals for process initiatives:

› cost reduction is no longer the most prominent goal. When we asked them to look back two years, one-third of respondents said cost reduction was the top driver of processes initiatives. In projecting forward two years, those citing cost reduction as the primary goal falls to a mere 8%.

› Digital transformation will be the main driver. The way we do business is changing, and there is a major push underway to reframe organizational operational processes around digital transformation efforts. The nature of core organizational processes is changing to meet customer expectations and keep up with the increasing threat of more automated, disruptive competitors. Rather than adopting a defensive posture focused on cost reduction, business leaders are looking to use process as a competitive weapon.

› The path leads through customer experience. Traditional process wraps around the business itself and creates internally driven processes. The shift toward digital transformation prompts a new design, with user experience and customer, as well as employee, satisfaction at the center.1




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fIGURe 1 Digital Transformation Is The Primary Focus For Process Efforts (Still)

Base: 354 business and technology decision makers

Source: Forrester’s Q1 2018 Digital Process Automation Survey

Cost reduction

Improve worker productivity

Improve customer experience

Accelerate digital businesstransformation

Regulatory compliance

2 years ago Now 2 years from now

32%

22%

16%

13%

14%

7%

12%

16%

32%

33%

2%

8%

8%

28%

49%

“What’s the primary focus of process improvement efforts for the time periods below?”

. . . But These Initiatives Are stuck

If these figures look familiar, it’s because they are. In our 2016 survey, we asked the same questions and received remarkably similar responses. Businesses’ goals remain the same, but they have made very little progress. In 2016, 50% of business and technology leaders said digital transformation would be the primary focus of their process improvement efforts by now. Flash forward to today, and only 32% of respondents identified digital transformation as the primary focus of their current process initiatives in our 2018 survey.2 Expectations about digital transformation do not match reality: Organizations are still bogged down with siloed systems and human-driven processes (see Figure 2). In a separate Business Technographics® survey, only 30% of global software decision makers whose firms were implementing business process management (BPM) software or had implemented it were satisfied with their existing product in 2017, compared with 60% in 2015.3




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Process is at a crossroads. Many organizations see the value of end-to-end digital transformation, but they still think traditional BPM systems are too expensive and too complicated — and too often focused on a limited number of applications that don’t really touch customers.4 Digital transformation requires a shift to digital process automation tools that offer faster app-dev capabilities with deep business involvement and center on improving user experiences and accelerating innovation.

fIGURe 2 Organizations Are Still Bogged Down By Manual, Paper-Based Processes

“What technologies are used to manage and automate business processes within your organization?”(Many, most, all responses only)


Note: Not all responses are shown.


*CRM = Customer relationship management; ERP = Enterprise resource planning

12%

25%

37%

40%

53%

66%

71%

Low-code development tools with deepprocess functionality (e.g., Bizagi, Nintex, K2)

Traditional BPM software(e.g., Appian, IBM, Pegasystems)

Paper-based, manual routing of tasks

Home-grown solutions

Work�ow in productivity/collaboration/no-code tools (e.g., SharePoint, Quick Base)

Packaged applications(e.g., CRM, ERP*)

Electronic manual routing(e.g., Excel and email)




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New Process Goals Require New Approaches And Methodologies

Embracing the new era of DPA calls for a healthy dose of change management. Process touches every part of an organization — and the impact is felt everywhere. Digital transformation requires end-to-end automation, necessitating the development of hundreds or even thousands of applications. Organizations are focusing their efforts on Agile methodologies, decentralizing process improvements to take pressure off IT and put control into the hands of individual departments that have the right knowledge.

customer centricity Leverages some Old Tools — And some Important New Ones

The increasing focus on customer experience is disrupting traditional approaches and creating new ones. Overall, businesses are adopting approaches that emphasize easy adaptability and design (see Figure 3):

› Lean/six-sigma is still relevant. Make no mistake: While Lean/Six-Sigma is no longer the darling of process methodologies, the process diligence it provides remains important. In fact, if we are on a mission to automate more processes than ever before, applying that diligence becomes even more critical to ensure that these efforts truly support strategic goals. In our survey, 37% of the organizations are using the Lean/Six-Sigma approach more.5

› customer journey mapping emphasizes customer centricity. Modern process efforts reframe workflows from the customer’s point of view. In the age of the customer, understanding the customer experience supersedes the business process itself. Mapping the customer journey helps illuminate key touchpoints and uncover opportunities for more seamless interactions. Among respondents to our survey, 84% plan to increase or significantly increase the use of customer journey mapping to support process initiatives.

› Design thinking becomes critical. Gone are the days when a relatively small number of back-office workers routinely accessed process applications. As the waterfront of process expands, these applications are now in the hands of many more employees and are increasingly customer-facing. So, the discipline of design thinking has jumped in importance accordingly, with a full 81% of respondents planning to increase or significantly increase their use of design thinking in process initiatives.




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fIGURe 3 Six-Sigma, Customer Journey Mapping, And Design Thinking Transform Process Efforts

Decrease signi�cantly Decrease No plans Increase Increase signi�cantly

“How do you plan to change or expand use of these process improvement methodologies in the next 24 months?”



Lean/Six-Sigma

Design thinking

Customer journey mapping

1% 4%

8%

1%

1%

54%

18%

16%

32%

55%

57%

26%

26%

Agile Methodologies Align With New Process challenges

Traditional tools and practices are heavy, expensive, and slow — often utilizing linear, time-consuming methods like waterfall development. Process improvement initiatives are now shifting dramatically toward Agile development (see Figure 4). Agile process development can handle user scenarios more effectively by supporting rapid, iterative development against evolving requirements.6

fIGURe 4 Agile versus Waterfall Process Methodologies

“How do you plan to change or expand use of these process improvement methodologies in the next 24 months?”



Agile development Waterfall

(Increasing or signi�cantly increasing) (Decreasing or signi�cantly decreasing)




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Low-code supports Decentralization Of Process Initiatives

More firms are leveraging cross-functional teams that work independently on process improvement at the department level rather than centralizing BPM initiatives in IT.7 This is gaining traction because:

› The job is too big to be centralized. Organizations are uncovering a multitude of process elements they need to be automate or streamline. It isn’t practical, or even feasible, for one centralized IT department to tackle the enormous magnitude of the software end-to-end transformation requires, making process automation ripe for low-code tooling and business user empowerment. Decentralization prevents IT from becoming a bottleneck and spreads responsibility throughout the enterprise. vendors are adapting to this shift with speedier, lighter-weight process solutions aimed at business professionals.

› Business teams understand the process. In many instances, businesspeople are the only ones who truly understand the process. Low-code development tools and user-friendly process software give control back to the business teams that own operational initiatives.8

Recommendations

New Process Goals Require New Skills, Methodologies, And Tools

AD&D pros take on a different role in the new world of customer-focused process initiatives. Rather than owning heavyweight BPM tools, development teams support the business owners of processes with methodologies and tools like Agile and low-code. To get started, AD&D pros should:

› expand the scope of “process apps.” The definition of “process” has for too long been associated with traditional BPM: costly, heavyweight, and time consuming. As process becomes more critical to digital transformation, applications that support end-to-end automation but used to fall below the radar of traditional process teams are now becoming every bit as important as the traditional process applications. As manual processes come into scope, the number of process applications in your overall portfolio could swell from the single digits to hundreds, or even thousands.

› set standards for business-owned process apps. End-to-end automation will require a consistent approach that allows parts of the organization to self-serve and move quickly. Establish product standards that offer flexibility and agility to the business so it can quickly buy or develop the applications it needs while supporting end-to-end integration. This will probably lead you to reevaluate of your current process portfolio with an eye toward products that are less expensive than traditional BPM tools and allow IT to apply governance and guardrails while putting nontechnical businesspeople at the center of the development process.

› Rethink the mandate of your process center of excellence (coe). As process goals shift from cost reduction to digital transformation, your organization must prepare to build more applications more quickly with improved customer outcomes as the success criterion. The team that can drive




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this is very different from a traditional BPM CoE. Build a team that can define and drive process excellence, while including UX professionals to drive design thinking and change management professionals to liaise with the broader business community that will ultimately become a critical development partner.

What It Means

Process Automation Will Catalyze Deep Organizational Change

Process automation is the lifeblood of digital transformation. As process automation demands grow, your organization will look and act very differently than it does today. Automating thousands of processes requires every enterprise to become a software company, meaning:

› Distinctions between the front office and back office will disappear. As customer journeys become the defining road map for process automation, understand this: Customers do not care about your arbitrary distinctions — they only care about outcomes. The strategy of focusing on front-office applications only addresses the tip of the iceberg; true automation means back-end operational excellence in support of front-end user experience.

› Organizational boundaries will be become far more permeable. Processes do not respect organizational boundaries. The era of each function optimizing to drive its own results has resulted in technology silos that do not integrate and fragmented responsibility for outcomes. This model will fall away as processes that span organizational boundaries expose the inherent obstacles.

› software development becomes a diaspora, not a silo. As every company becomes software-driven, they will require far more software support processes than they can build using traditional, IT-led approaches. Business developers, supported by IT, will fill the gap. This will require a massive change management effort to give those new developers the skills, tools, and motivation to become part of the developer diaspora.




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Supplemental Material

survey Methodology

Forrester’s Q1 2018 Digital Process Automation Survey was fielded to 354 business technology decision makers. For quality assurance, we screened respondents to ensure they met minimum standards in terms of content knowledge.

Forrester fielded the survey during Q1 2018. Respondent incentives included a summary of the survey results and a courtesy copy of the published research. This survey used a self-selected group of respondents (Forrester clients knowledgeable about business process improvement efforts taking place within their companies) and is therefore not random. This data is not guaranteed to be representative of the population, and, unless otherwise noted, statistical data is intended to be used for descriptive and not inferential purposes. While nonrandom, the survey is still a valuable tool for understanding the industry is headed.

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Endnotes1 As organizations move toward a customer-obsessed operating model, digitizing all business functions becomes an

imperative. The transition will take time as the primary driver for BPM moves from cost reduction, to an emphasis on customer experience, and then to digital transformation. To learn more, see the Forrester report “Traditional BPM Gives Way To Digital Process Automation.”

2 Source: Forrester’s Q1 2018 Digital Process Automation Survey and Forrester’s Q2 2016 Digital Business Automation Survey.

3 Source: Forrester Data Global Business Technographics Software Survey, 2015 and Forrester Data Global Business Technographics Software Survey, 2017.

4 As organizations have adopted Agile practices at scale, they have shifted away from traditional planning and requirements tools toward tools that help them work more flexibly and iteratively. See the Forrester report “The Quest For Speed-Plus-Quality Drives Agile And DevOps Tool Selection.”

5 Source: Forrester’s Q1 2018 Digital Process Automation Survey.

6 As organizations have adopted Agile practices at scale, they have shifted away from traditional planning and requirements tools toward tools that help them work in more flexible, iterative ways. See the Forrester report “The Quest For Speed-Plus-Quality Drives Agile And DevOps Tool Selection.”

7 Source: Forrester’s Q1 2018 Digital Process Automation Survey.

8 Nontraditional developers can fulfill many of their own needs for personal, team, and departmental applications. With the right tools and governance, some are playing a larger role in companies’ application delivery strategies. See the Forrester report “How To Harness Citizen Developers To Expand your AD&D Capacity.”








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