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Upgrading Zero-Based Redesign With Digital

Upgrading Zero-Based Redesign With Digital

New technologies improve the results of a zero-based redesign in three important ways.

  • min read


Upgrading Zero-Based Redesign With Digital

This article originally appeared on Forbes.com.

More companies are taking a clean-sheet approach to budgeting, scrutinizing every dollar of spending to ensure their spending supports strategic goals. Many are going further with a process we call zero-based redesign, in which companies revamp their operating models by analyzing which activities should be performed at what levels and at what frequency.

However, in spite of this renewed interest in zero-based budgeting and redesign, few companies are tapping the full potential of a range of new technologies that could allow them to significantly redesign processes by removing work and cost. This oversight represents a significant missed opportunity for executives and the companies they lead, because these technologies support zero-based redesign in several important ways.

  • Costs and efficiency. Applying these technologies can reduce costs by 25%-50% and are more efficient since they can run 24/7.
  • Effectiveness. Automation reduces errors, speeds response times and ensures better compliance.
  • Insights. Digital technologies also do a better job collecting and organizing data, which helps companies form better insights. This allows executives to make better predictions and sometimes redesign processes and entire businesses.

Some executives might overlook this potential because they are overwhelmed by the prospect of determining which technologies they should invest in. So to gain a sharper view of what really moves the needle in a focused ZBR effort, Bain researched the performance of a wide range of digital technologies. Our research identified four technologies that demonstrate outsized potential to remove costs, improve efficiency, raise productivity and otherwise redefine tasks and processes:

  • Virtual business-process assistants (VBPA) or robotic-process automation (RPA) manipulate data, trigger responses, and basically replicate clerical actions.
  • Business-process management systems manage end-to-end processes and can support continuous improvement.
  • Cognitive systems perform complex tasks that sometimes require some artificial intelligence—such as using a natural-language interface to respond to customers’ requests.
  • Decision management technologies can make structured decisions based on inputs from various sources, rules and parameters.

Of course, it would be a mistake to automate every task and process simply because the technologies are available. Executives need to weigh the value of automating a business process against the quality of the current process. Is it already a streamlined approach, or has it been cobbled together? For each process, executives will have to decide whether the tools are available to automate it, and whether the process needs to be redesigned before automating.

At a higher level, embarking on a broad zero-based budgeting transformation requires a shift in thinking about the ways a company pursues its strategic goals, with a renewed emphasis on building up the assets and capabilities that can deliver success. As executives consider the role of technology in such a transformation, they can think of a three-stage process.

  • Set redesign targets and cost goals. During the early stages of a zero-based redesign, teams should identify the best opportunities, looking for pain points where costs can be removed. A comprehensive view enables them to go after the biggest opportunities first and move quickly to capture quick wins.
  • Evaluate technologies and prioritize deployment. During the first phases of a transformation, teams should look for opportunities where technology is the best tool for automating and improving processes (for example, cycle time and error-rate reduction). They can then evaluate the maturity and fit of relevant technologies to see which are most promising. This assessment includes weighing the costs and productivity benefits; evaluating execution risks (valuing relevant real-world success examples over vendor product claims); and estimating payback time for investment. With the results of that analysis, they can begin to prioritize which technologies to implement.
  • Build prototypes and launch pilots. With many newer technologies still developing, it is critical to use pilots to conduct “test and learn” experiments and determine how a particular solution fits the organization. Agile teams made up of functional and technology experts can develop solution designs along with plans for delivery and pilot programs. These teams can measure the results of their pilots against the broader goals and use these results to refine their ambitions and approach. These pilot results also inform the execution plans that underpin the broader deployment, and the agile teams stay in place to drive deployment across the larger organization, ensuring that progress stays on track.

Now is the time to think expansively, to discover what a risk-managed, test-and-learn approach can achieve, and to put plans in motion to transform business operations. When applied in the early stages of a zero-based redesign, these technologies can deliver tremendous change by reducing costs, improving efficiency and raising productivity.

Gary Clare is a partner with Bain & Company in New York, and Prasad Narasimhan is a Bain partner in Boston. Both work with Bain’s Information Technology practice.


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