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Prasad Narasimhan: How Digital Technology Supercharges Zero-Based Redesign

Digital technologies and automation can help reduce costs for companies that take the radical budgeting approach of zero-based redesign.

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Prasad Narasimhan: How Digital Technology Supercharges Zero-Based Redesign
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Digital technologies and automation can help reduce costs for companies that undertake a zero-based redesign. But although these tools are more available and affordable than ever, few companies are taking full advantage of their capabilities. Prasad Narasimhan, a partner with Bain's Information Technology practice, details promising technologies with high potential to improve results.

Read the Bain Brief: How Digital Technology Supercharges Zero-Based Redesign

Read the transcript below.

PRASAD NARASIMHAN: Companies are looking at zero-based budgeting and zero-based redesign as approaches to take out transformational cost. And this is important, given the pressures that these companies are under.

One of the underused levers in zero-based redesign and zero-based budgeting is the use of digital technologies and automation. These technologies, while historically immature, have proven themselves as starting to show some signs of being really effective.

So examples: In certain steps of a process, these technologies are enabling 25% to 50% reduction in costs. We are also seeing, with automation, that the software works 24/7. It's less error-prone. It is more effective. So [there is] lots of value in considering some of these technologies.

However, there's a lot of noise and buzz around all types of stuff that is available in the market. We think that there are four technologies that are most useful for companies to consider.

The first is what we call robotic process automation. This is software that replaces manual data entry, or taking data on one system and manually entering it into another system.

A second kind of technology is smart process redesign. This is technology that enables you to improve how a process works on top of legacy systems, or rethinking a process for the digital world, like straight-through automation.

Third is cognitive technologies. The classic example is a chatbot. This is software that has some intelligence in it, and can answer questions or do things that humans could do.

And then the last is decision management technologies that really take data from disparate systems, and then bring it together to drive a more effective decision process.

So while these technologies are promising, we think that companies should use a prototype approach. You know, set up a pilot lab, prototype the technologies, prove it out on a small scale and then take it as far as you can, in terms of what you can do with the technologies, especially in a zero-based redesign setting.

And we think 5 to 10 years from now, these technologies are going to be transformational, in terms of what they can do to companies. But it's prudent for companies to start thinking about them now.

Read the Bain Brief: How Digital Technology Supercharges Zero-Based Redesign

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