What is Lean Automation?
Lean automation is a methodology that uses elements of Lean six sigma with business process automation. It focuses on reducing waste in the execution of business processes before automating tasks. Lean Automation enables the adoption of business technology using iterative improvements as opposed to traditional business software delivery that is based on overall transformations
Lean Before Automation. Why the two must go hand in hand
The match between Business Process Automation and Lean isn’t a perfect one if the goal is to redesign or improve the process rather than to automate its current state. But automation should always be combined with changes in the relevant business process. If the goal is to go beyond basic cost savings to improve the process — and it should be — then companies need a good understanding of both their existing business processes and the new processes they want BPA to enable before implementing any technology.
However, many companies don’t do that. Their BPA implementations support the “as-is” process, with no improvement or examination of the current process steps that are automated. As a result, they may achieve modest savings, but in many cases, they will miss out on opportunities to dramatically improve process outcomes, quality, costs, and cycle times
Risks of automating inefficient business processes
With so much value at stake in automation, leaders are often tempted to get straight into execution. That approach leads businesses to try to automate inefficient processes. If processes and the management team supporting them are not reconfigured before automation, the benefits are minimal – If any.
Companies that do best at automation take the time to consider how they could redesign their processes, their teams and even their organization to pave the way for automation. Lean thinking can reduce development times, simplify maintenance, reduce the gap between people and machines, and improve data management and reporting
Best tools for business process automation
When evaluating business process automation tools, organisations should consider two main elements:
Ability to Execute
This category includes:
Core services offered: Can they integrate with existing core systems? What support they offer? Can they provide ongoing updates/ upgrades?
Overall Viability: Is their business financially healthy? Are they capable on further investing and improve their capability?
Sales Execution & Pricing: Are their prices competitive? Is their pre-sales process effective in matching customers need to their solution?
Customer experience: Can they demonstrate success of past deliverables? What do their customers say about them?
Completeness of vision
The category includes the following criteria:
Market Understanding: Do they understand the latest market developments?
Industry Strategy: Do they have a strategy allocate resources, skills and offerings to meet the need of the industry they want to reach?
Innovation: Are they capable of innovating and consistently update their product or services?
Is it right for me? The Lean Automation ROI guide
Although the ROI calculation will differ depending on the scenario, a basic approach can be used is the following:
TIME spent on manual task X FREQUENCY of performing task per month X COST per hour X 12 Months = YEARLY COSTS OF MANUAL TASKS
Let us say an organization spends 2.5 hour on updating shipping data for sales orders daily. That is 50 hour a month, at an average cost of £25 per hour. That is £15,000 of admin costs per year
With a £40 per month Cloud app connected to your core system and about £3000 for scope, design and training costs, companies can achieve a 5X ROI.
How to get started?
If you want to get started with Lean Automation schedule a call to get a free assessment.