Companies across Malaysia are finding out that change is the only constant in digitisation. It is a continuous journey that requires them not only to consistently mull over the technology mix within their organisation but to also regularly finetune their business processes to gain real value from their adoption of technologies such as artificial intelligence and blockchain.
This was the major takeaway during a roundtable last month held in Kuala Lumpur hosted by FutureCIO in collaboration with SAP.
“Many times, when we speak to a CEO or chairman of a company, he would say ‘this is my vision and this is what I am going to achieve’, but when they realise that they want to do a transformation, they neglect the processes that they have to put in place,” said Cynthia Quah, interim managing director of SAP Malaysia and also vice president – head of cloud for Southeast Asia at SAP. “ROI is always there. People are always there. The processes are neglected.”
For Sarawak Energy, the challenge of digitization is aligning changes in both technology and business processes.
“Currently if you want to move into digital transformation, you look into the process and then you choose the solution that would close gaps to move you into digital transformation. Some of the technology is globalised and some processes are localised within our settings – and whenever we do that, we have to make some changes. If [the changes] are procedure-wise, it is okay, but if it involves policy, sometimes we have to work around it,” said Iskandar Mohd-Sarkawi, procurement technology head, Sarawak Energy.
Josephine Omar, head of information management at Sarawak Energy, added: “Energy has some unique technology. There are a lot of moving parts. Putting it all together is really a challenge because the process that changed here is going to change elsewhere.”
Evolving business processes for successful digital initiatives
Asked how business processes have evolved to ensure the success of an organisation’s digital initiatives, a couple of participants emphasize on the integration of different technology systems.
“The different systems must be integrated first for the transformation to occur. If it doesn’t work, there is no reason to buy so many new systems,” said Vivi Lim, director of IT Services at the University of Nottingham Malaysia.
For the university, which operates campuses in three countries, introducing new technology is always a challenge in the face of a legacy system that is being used in all three countries.
“Technology-wise, what they have implemented, it does have a lot of baggage for us to change. So, in terms of where we have to use the same technology in our three campuses, it becomes very complicated,” Lim noted.
For Sarawak Energy, the integration of technologies is essential to the success of its digital initiatives, and it has greatly influenced the evolution of its business processes.
“Why do we do this? The objective is to understand how we operate our business and to improve our business. And to solve business problems, we need to have visibility; and the integrated solution steps that are crucial as we move along. Of course, later, we'll be measuring how efficient we are in our business process. We don’t have that yet and we have yet to craft how to measure it,” said Omar.
Measuring the efficiency of business processes in the wake of a new digital initiative can be tricky, particularly when a company’s top management has set ROI goals for the eventual business outcomes. IT executives are advised to set expectations.
“Setting up a target should be done based on facts of how the existing business processes are performing. We encourage C-suite to use technology such as process mining to understand how core business processes are performing today. This data, coupled with industry benchmarking should be then used to come up with a target,” said Rahul Mainkar, head of SAP Signavio South East Asia.
“Efficient Business processes are at the heart of every successful enterprise. It is imperative to have a view on how the core business processes are performing, and what are the blockers to serve the internal and external stakeholders better.”
Rahul Mainkar
People’s mindset makes it difficult to track business processes
Terry Yap, head of insurance information technology at RHB Banking Group (RHB Insurance) observed that tracking the efficiency of a business process is difficult when people within the company are pushing back against the transformation.
Some companies, he noted, are forced to do a partial transformation to accommodate the pushback, but then this means they cannot fully drive out the operation excellence from the entire digital transformation.
“A project which can be done within three months dragged on for nine months because we have to deliver it piece by piece as people still believe in manual processes. Mindset is hard to penetrate. You need to keep sending the message down the ranks,” added Yap.
Quah noted that companies find it difficult to track and analyse business processes.
Mainkar pointed out that any end-to-end business processes such as Procure to pay, Order to Cash, and Asset Maintenance are difficult to track as these involve cross-business functions.
“This is where technology can help businesses get a view of these processes’ performance by extracting data from the underlying systems and then reverse-engineer the actual process that is being executed in the system,” he added.
Getting insights to optimise business processes
Roundtable participants said they need both real-time analysis and business process recommendations to help them optimise business processes within their organisation.
“We need a combination of both – something like real-time actionable recommendations. Because basically, you can have great analysis, but that analysis doesn’t tell you anything. You can’t move and you can’t change your process at all. If you want to do process improvement, you need suggestions from your analysis,” said Ts. Nurul Haszeli Ahmad, general manager of IT at SIRIM Berhad.
For Sarawak Energy, real-time analysis is important as the utility company needs to be able to respond immediately in case of operational disruption. “But on the other side, we also want to see how we can improve our business processes,” said Omar.
The University of Nottingham Malaysia, on the other hand, prefers insights it can get from process improvement recommendations.
“With business process recommendations, they can tell us where we are doing wrong or doing too much; where we can cut down steps – and you know – make things more efficient. And in turn, let our staff have a better work-life and not do too much otherwise unnecessary work. I think that is more important than real-time,” said Lim.
Calvin Saw, Malaysia presales lead, industry & customer advisory – South East Asia at SAP said that in terms of setting a baseline for business processing, companies typically want to know where they stand against the industry.
“I think that's usually the baseline that they want to set because often, the system that they use today has been designed five to seven years ago. Often, you’re not doing bad in all areas, but there are indicators where you are lagging. That would be the baseline that people will see this is the area that needs to think through."
Calvin Saw
“So, this would typically set the benchmark to come up with the process recommendation. But obviously, that is the first step, and often, you will need to dive into organisational-specific data to understand the details right,” said Saw.
One observation is that many enterprises do not measure the efficiencies and optimisation that are built-in into their systems – hence, they cannot derive the full business value.
“Honestly, 70% of our customers might not even use the best practice in the software. They don't know how to consume best practices and how to optimise the software,” said Quah.
That’s where Signavio comes in, she added.
The combination of SAP and Signavio bring together standardised process KPIs, broad benchmarking data, process mining, user behaviour mining and customer experience analysis to give customers a 360-degree view of every business process. It will also provide tools to fully understand and transform the processes.
“Business process optimisation is not a one-off offer that comes with your digital transformation. It does not work like that. We empower SAP users to take charge of their processes and make the changes yourself.”
Cynthia Quah
