Muscle memory is the enemy of innovation. When it comes to transformations, process optimization is often under-valued by auto and equipment finance organizations as they implement a modern core or move their data and applications to the cloud. Adam Little and I think that’s a mistake. You must let go of old habits and challenge your ways of working before you can truly transform.
It’s tempting to “lift and shift” processes to a new platform. But before you embark on your big transformation, make sure you look at each component. The little things can drive a big economic impact. That’s why we advise businesses to hit pause, and to evaluate which processes are worth optimizing or automating first. To truly optimize, you must question everything. In some cases, it may make sense to bring the existing process into your new environment as is. In others, processes could come from out-of-the-box functionality—or even be left behind.
This evaluation phase is much like the prep work you should do before painting the spare room. Filling holes and masking the trim takes an inordinate amount of time and it’s not glamorous work. However, if you do it right, the painting itself goes significantly faster and the end result will be clean lines and a flawless finish.
Similarly, if you move your operations to a new platform, but don’t take the time to adequately evaluate the process landscape, you will dedicate precious time to non-value-add activities, and yet inefficiencies will still exist in your new operations—and these are often harder to optimize post-transformation. Once your operation is up and running, you will need to break existing workflows in order to optimize them.
Benefits of optimizing upfront
Some of the more subtle benefits to pre-transformation optimization include:
- Reduce costs, not just for operations in the long term but also for the transformation itself.
- Mitigate risk. Project delays are often caused by course corrections mid-flight. Doing the prep work will help avoid cost overruns associated with stopping to retool processes.
- Position the business for future transformation. The auto and equipment finance spaces are rapidly changing. Properly optimizing and documenting your processes will put you in a better position to move with the market.
- Boost business agility to make it easier to respond to changes in the market or events like the COVID-19 pandemic.
Before you start your transformation, ask yourself and your organization these questions:
The processes themselves
Effects on accuracy
Ultimately, our two key takeaways are these:
- Don’t forget process optimization. It doesn’t always get the headlines in the way that robotics, sustainability, artificial intelligence or other modern technologies do. But process optimization is a critical part of your transformation effort.
- Be thoughtful in your approach. There’s no need to optimize or digitize every process. Choose only those that make sense.
As you would before any transformation, define a strategy and develop a roadmap for process optimization that meets the needs of your business. Decide which processes score “a passing grade” and which ones are worth perfecting. Then you can move on to giving your project a catchy name and funding a transformation that will make a lasting impact on the business.
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