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Selecting the Right Automation Option: ERP or Specialized Products?

With the rising cost pressures, automation has become an organisation’s new way of operating and innovating. Today we see many ERPs adding advanced technologies to their products along with the automation of more and more business processes. New technologies like ML and RPA play a key role in how enterprise business process modules are written. These advancements come as no surprise given that ERPs have always been driven by the goal of increasing the efficiency of business processes and saving time spent on performing manual tasks.

At its core, intelligent process automation is the use of emerging technologies that can enable business process improvements and redesign. Such automation products can be presented in numerous ways according to the technology or the use case they deliver.

 

Industry Trends

Advances in ML are providing organisations with an increasing number of automation options. On one hand, ERPs are acquiring or partnering with automation experts to accelerate their RPA and Machine Learning portfolio while on the other end, niche and specialised automation vendors are focusing on developing connectors with core enterprise software. For instance, SAP has acquired Contextor – a European leader in design & RPA, and Signavio – a process automation startup to build its process intelligence offering. Oracle has partnered with Automation Anywhere and UiPath to develop its RPA capabilities.

Niche products for finance management provide advanced and specialised automation solutions for finance processes such as automated financial close management that include unified & automated platforms for accounts receivables and intercompany financial management. These solutions help companies to modernize & use best-in-class practices for their financial processes. Such products support different ERPs and therefore can help to automate functional areas working across multiple ERP systems.

Balancing Cost vs. Complexity

Niche solutions provide a greater depth of functionalities and may involve less cost and complexity than an ERP. We have seen companies preferring a purpose-built e-solution rather than wanting to expand the capabilities of ERP. However, if the depth of functionalities is almost the same as that of ERP capabilities, then it may involve less hassle to expand the capabilities of existing systems like ERP.

Organisations, thus, today face the challenge of choosing from a wide range of options, be it leveraging the automation capabilities of an enterprise suite or using a specifically designed solution for a given business function. With this fast-growing market and increasing cost pressures, the burden falls on companies to carefully evaluate not only their present needs but also anticipate the future scope to make the right decision in choosing an automation solution. Otherwise, they run the risk of building multiple fragmented and siloed solutions across their IT landscape.

Opticos supports clients with formulating automation strategies and implementing solutions using ERP or niche products,  as per your organisation’s specific requirements.

Authors: Abhishek Kale, Jasmeen Kaur and Johan Saks

Abhishek Kale, Senior Consultant with experience in Process Excellence, Digital Transformation, and ERP Consulting across multiple business sectors.
Jasmeen Kaur, Senior consultant with experience in Intelligent Automation, Process Transformation and Program Management.
Johan Saks, is a seasoned leader and Head of Digital Transformation at Opticos. He specialises in guiding clients through the challenges of digital transformation, strategic planning, and performance enhancement.

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ERP and PLM - competing or complementary solutions?

ERP and PLM – competing or complementary solutions?

Is it a question of one or the other, or are the benefits of having both so great that it is an obvious choice? For most product-centric companies that are developing, producing, and selling products, it is obvious that both are needed.

Nevertheless,  some trends can challenge this:

  • Many companies are now applying a business model where partners supply parts of the whole product related develop-delivery process
  • Many ERP suites now include PLM-like functionalities
  • Products today are increasingly bundled along with services such as financing, installation, and after-sales support
Illustration 1 – ERP and PLM combined can unlock the true potential

 

If you go back a few years, the distinction between PLM and ERP is quite evident. PLM was used to develop, create recipes and maintain products throughout their lifecycle. ERP took the recipe developed by PLM and procured, manufactured, sold, and delivered these products, creating orders and transactions.

Even though ERP and PLM have distinct use cases, both have overlapping capabilities as we see emerging trends at the intersection of the two functionalities. ERP and PLM now include capabilities such as managing Manufacturing Bill of Materials (MBOMs), following up on development costs, handling engineering changes, and tracking products. Processes such as sourcing are shifting up in the development process and, thus, moving from the purview of ERP towards PLM. Both systems are highly critical in every large IT landscape; thus, they must complement each other.

From our experience, a product-centric organization will most likely need both systems, and the main point of discussion should be where to draw the line between them and how to integrate them to serve your organization best. We have seen that the benefits of well-integrated systems are immense for any organization, and we have listed some of them below.

Cost reduction

With an increase in data accuracy and improved ownership of data, cost reduction can be achieved in many ways:

  • Improved material visibility preventing material shortages or high inventory costs
  • Single source of data provides more accurate view of the operations, making it easier to find potential areas for cost savings
  • Feedback from operations to R&D about product usage and quality concerns makes it possible to quickly revise and improve products in production, thus reducing future warranty expenses.

Supply Chain Resilience

A Mckinsey Report* stated that companies with end-to-end supply chain visibility are twice as likely to avoid any supply chain disruption. An integrated environment removes information gaps and provides a holistic view of the supply chain, thus building resilience.

Product Provenance

Organizations might soon face regulatory pressure to provide product and manufacturing details such as ingredients, sources, and sub-suppliers and share them with the consumer. Seamless integrations between PLM and ERP thus become a prerequisite to achieving full product traceability as it can help trace and monitor a product throughout its lifecycle – at a model level in PLM and an individual level with ERP.

Increased efficiency

ERP and PLM integration automates some processes, such as updating, transferring, and accessing product-related data. This can help employees improve productivity and focus on more critical tasks. With an integrated product data setup, the organization can easily detect errors or enhancement possibilities and thus make modifications more efficiently.

Improved collaboration

Integration enables clear communication between different departments and create alignment through single source of data. The improved collaboration between interdependent functions will reduce time to deliver new and better products to consumers, at a lower cost.

Role of ERP and PLM in IT Landscape

ERP and PLM are critical parts of a system landscape for manufacturing companies, and to maximize their benefits, it is imperative to understand their respective strengths and use cases.

Companies rely on being competitive through their products, making effective collaboration between design and manufacturing operations essential. ERP and PLM integration enables this collaboration by having complementary functionalities for design and manufacturing processes.

Essential activities for creating competitive products, such as design, development, sampling, approval, etc. are executed and signed off in the PLM system. ERP then takes the finalized products forward by managing the sourcing, operations, finance, and sales.

Illustration 2 – Comparing high-level functionality of ERP and PLM

 

The integration of ERP and PLM systems affects various business areas and processes, enabling synergies. To realize all the synergies, organizations must develop an interactive and effective intersection between the systems. Furthermore, the ownership of the product structure and bill of material (BOM) must be managed.

Success factors for ERP and PLM integration

Transferring data from one application to another is only one side of the coin. It is equally important to recognize that ERP and PLM integration integrates critical organizational processes, raising the need for effective change management.

Based on our experience, the successful integration of ERP and PLM depends on:

  • Complete understanding of current product design and manufacturing process as well as requirements moving forward
  • Assessing and identifying the current inefficiencies and developing a vision for efficient collaboration of design and manufacturing
  • Complete understanding of the data involved, including how and where it is stored and how it can be used (including master data management)
  • Understanding the Master Data nature of PLM and the transactional nature of ERP to make relevant decisions of functionalities and data resided in the borderline between these two applications
  • It is also relevant to have this understanding while sourcing the two systems as the vendors would compete for a larger part of the IT landscape and thus try to sell components and functionalities that organizations do not need

 

Illustration 3 – The ERP and PLM processes running incorporated, interacting

 

At Opticos, we are open to engage in discussions around the ERP – PLM integration and to assist your organization in various stages of your ERP – PLM integration journey. With expertise in Digital Business Transformation, Sourcing and Procurement, Data and Change management, we can help your organization turn ideas into action.

Want to know more? Please do not hesitate to contact us.

References: * Mckinsey Report: “Taking the pulse of shifting supply chains”

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The EU Green Deal, what does it mean to the CIO?

Even if the Europen Union Green Deal is about making the EU more sustainable – it could impact the day-to-day life of the CIO – in a good way. Sure, it would be obvious to start measuring and reducing greenhouse gas emissions and IT-related environmental impacts. Let’s go beyond simply CIO reporting on sustainability.
The article will include examples of how a CIO can provide value to Sustainability Strategies. Real value.

 

The EU Green Deal, what does it mean to the CIO?

The EU Green Deal aims to achieve climate neutrality by 2050 through reduced greenhouse gas emissions, renewable energy, and biodiversity conservation. As companies strive to meet these goals, the role of the CIO is expanding from IT management to becoming a sustainability information provider. This requires ensuring products and services comply with the upcoming Green Deal’s traceability and identification requirements. This Opticos viewpoint examines CIOs’ crucial yet unclear role in driving their companies toward sustainability. But first, let’s look at the background of the EU Green Deal.

What is the European Green deal?

The European Green Deal is a flagship project of the European Commission and a holistic approach to addressing the challenges of climate change. Some of the ambitious goals can be seen in the figure below.

Illustration 1 – EU Green Deal key figures – ( * compared to 1990)

 

The Green Deal covers all sectors

The Green Deal includes a variety of measures, such as promoting electric vehicles, enhancing energy efficiency in buildings, and investing in sustainable infrastructure and research and development. The Green Deal covers all sectors of the economy, including transport, energy, agriculture, buildings, and industries such as steel, cement, ICT, textiles, and chemicals. In this context, the Green Deal must deliver legislation and regulations, such as the potential use of Digital Product Passports and different Supply Chain Acts. These legislations will require how the sustainability data of products and services sold on the European market should be measured and made available to consumers, customers, partners, and suppliers.

It is important to note that the EU Green Deal differs from the UN Sustainable Development Goals (SDGs). However, the SDGs and the EU Green Deal are closely related as they promote sustainable development and address global challenges such as climate change. The SDGs provide a global framework for the EU Green Deal, and the EU Green Deal is seen as a tool to achieve the SDGs.

What does this mean to the CIO?

Traditionally, the CIO role has been viewed as a technology expert responsible for managing and implementing IT infrastructure and systems within organizations. They are now becoming key players in helping companies reach their sustainability targets. With increasing pressure on the world to reduce greenhouse gas emissions and address environmental challenges, companies are turning to their CIOs to lead in implementing sustainable technology solutions, often under the digitalization taxonomy. However, this is only part of the story. Going back a couple of years, the introduction of the GDPR law and other privacy legislation had a tremendous impact on the organizational use of privacy data. The EU Green Deal and upcoming legislation could have a similar data challenge impact on companies. This time it’s about how they communicate the sustainability data on their products and services to the public. In the not-so-distant future, a consumer of a product in the EU shall easily understand the full sustainability impact of a product or service they are about to purchase. It could be scanning a QR code in a store when buying a new TV to get the sustainability score, or it could be when buying a vacation journey online. The EU will start with complex products with a high environmental impact, but eventually, it will come to mass-produced products and services.

Using legislation to promote competition

These legislations aim to make producers compete with sustainability like they already do with price. Sites that compare sustainability scores between similar products will appear in the same way that price comparison sites already exist today. For companies that would like to compete on sustainability, it will probably be a must to be able to provide open data on sustainability scores for their products and services. WatchGuard organizations will scrutinize this data, and cheating on the data will be a business risk, with a magnitude similar to Diesel Gate’s on car emissions a few years back. Additionally, companies that today provide products and services to the public sector will face the challenge of supplying this type of information to at all being able to participate in public procurement.

Data as a carrier for environmental impact

One thing that makes the demands on data architecture even higher is that it will likely not be sufficient to provide this data on the model or article level. It could be required to provide data on an individual product level, batch, or serial number. Otherwise, it will not be possible to understand the environmental impact of transportation or evaluate the potential use of a product from a second-hand and recycling perspective. It means that new and higher demands on supply-chain-traceability and the possibility of identifying a product in a globally unique way. Many companies using legacy ERPs will realize this the hard way when discovering that meeting these demands is impossible with their current IT systems. Many companies could face costly repercussions if they delay addressing these issues. Similar to the GDPR events a decade ago, it will be more expensive the longer you wait to acknowledge this. Resources to rectify the situation will dwindle and become increasingly scarce and costly.

In the figure below, we provide examples of how CIOs can help provide value to their company’s sustainability strategies.

 

Illustration 2 – How can CIOs add value to sustainability strategies? Here are some ways for inspiration.

 

Opticos offerings

The scope of the CIO agenda is expanding, and the requirements and opportunities related to sustainability are one primary driver. There is a wide range of aspects to consider that may impact and shape the IT landscape in the future.

At Opticos, we are open to engaging in discussions around this topic and providing assistance to help clarify requirements, identify opportunities, and assist in forming the change agenda going forward for your business and specific needs.

Hans Bergström & Nils Andersson

 

Hans Bergström
Director Enterprise Architecture
Nils Andersson
Consultant Specializing in Sustainability

 

 

 

 

 

 

 

 

 

 

 

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Leveraging IT to achieve Environmental Sustainability Objectives

Environmental Sustainability is becoming an integral part of corporate strategy with changing perspectives worldwide as most organizations are making future commitments towards sustainable operations.

However, along the way, they encounter several challenges ranging from performance reporting and governance to data and technology limitations. IT and Data Strategy now sit at the heart of environmental Sustainability as they enable organizations to collect and analyze information, monitor performance, and gain actionable insights.

This article will help you navigate the critical areas and some of the pitfalls. 

 

Why are Environmental Sustainability objectives relevant to your organization?

Decarbonization was the focus of all attention during the Climate Change Conference (COP 27) in November 2022. A factor acknowledged as a critical step in offsetting human impact on the global climate. 

From a business perspective, organizations face increasing pressure from their customers, investors, governments, and regulators and are held accountable for their Environmental, Social and Governance (ESG) initiatives and actions. 

Most leading organizations are now incorporating ESG and environmental Sustainability in their corporate strategy and reporting progress in their annual performance reports. 

Measurements for Environmental Sustainability

Environmental Sustainability requires an organization-wide transformation program and framework for computing, assessing, and allocating greenhouse gas (GHG), climate, and environmental impacts and outcomes to the organization’s direct and indirect actions and business operations. 

 

Illustration 1 – Opticos approach to assess and measure environmental sustainability

 

Therefore, organizations must establish a clear link between their operations (Scope 1, 2, or 3)*(1) with measurement parameters (CO2 equivalent, water consumption, waste, biodiversity impact) and positive or negative climate and environmental externalities.

 

Illustration 2 – This is how the Swedish Government announces its position and commitment

 

Challenges in the current ecosystem

While there has been a rapid increase and adoption of reporting standards and accountability mechanisms, many organizations are yet to align their net zero commitments to any robust process or criteria. As the Net Zero Tracker reports – More than one-third of the world’s largest publicly traded companies now have net zero targets, up from one-fifth in December 2020. However, 65% of corporate net zero targets do not yet meet minimum procedural standards of robustness.

Well, where do the organizations fall short? And why do some organizations find it challenging to set a path to achieve their environmental sustainability objectives? 

Organizations face many challenges, from data shortfalls, technology limitations, and time-consuming manual processes to defining robust KPIs for reporting and obtaining ESG metrics across the value chain. A fragmented approach with a weak governance structure can even aggravate the problem further in the absence of universally accepted industry regulations and standards. 

A Growing Need for Change

Organizations have realized the need to decarbonize and improve Environmental Sustainability across their value chain but often struggle to translate this ambition into action and results. Sustainability may be a relatively recent concept, but the core principles of business transformation still apply. 

Leadership to accelerate a shift in the corporate strategy

Environmental Sustainability directives should trickle down from the top, i.e., the leadership and organizations need to embed environmental sustainability targets/KPIs throughout their business operations. Organizations require more than better measurement and reporting practices to achieve real progress—fundamental changes in the industry ecosystems and business models are also vital areas. 

Analysis of the 26 largest publicly traded Swedish Companies shows that net-zero targets are entering the mainstream, and so are the efforts to report and govern them. However, the primary challenges include drafting and deploying a detailed plan that addresses the entire scope of the value chain.

Illustration 3 – Net Zero Tracker’s analysis of Swedish large companies

 

Collaboration can help you along the journey

Sustainability is a systemic concept that requires the entire value chain to collaborate. Competition, though essential, is one of many drivers for success. Organizations realize the power of collaboration as shared interests and goals incentivize them, and the growing need to invest in the health of e shared ecosystem. 

It is now imperative for business leaders to take a broader ecosystem view based on an understanding of all stakeholders and go beyond engagement to enablement. 

Technology as a critical enabler

Much of the critical data necessary to support environmental Sustainability resides in enterprise software systems, and if this data can be standardized, combined, and analyzed, the improvements can be substantial. Whether in individual companies or large and complex organizations, the data-driven approach is already delivering sustainability-linked dividends – from reducing waste and water consumption to calculating and subsequently lowering the carbon footprint across the entire value chain.

As the world struggles to reduce or isolate the emissions causing climate change, it’s exciting to see new digital tools and technologies coming into play to help industries meet this urgent challenge. A broader digital transformation is becoming a significant enabler for monitoring sustainability performance and driving a reduction in carbon footprint. Businesses implementing transformation programs and the right technological toolkit will find that net zero targets can be compatible with organizational growth. 

How can organizations engage?

Organizations need to determine the current maturity of their environmental sustainability initiatives, understand their material environmental impact, and work towards building objectives, targets, and action plans. 

Illustration 4 – Organizational Maturity Levels for Environmental Sustainability

For organizations in their initial phases of the environmental sustainability journey, existing measurement frameworks, such as GHG Protocol *(2) or IFRS Sustainability Disclosure Standards *(3), can offer a way forward to establish program guidelines and a measurement strategy and help focus on data management.

A formal, structured transformation program can be a clear solution to multiple challenges organizations face on their way to the environmental sustainability journey. Opticos has worked with clients across different industries and varied transformation objectives during the past decade. 

We provide expert knowledge and help organizations develop key transformation strategies and analyze current and key success factors. 

Do not hesitate to contact us to discuss this further.

 

Learn more:

Authors

Abhishek Kale
Johan Saks

 

*(1) – In short, Scope 1 direct emissions come from owned or operated assets. Scope 2 consists of indirect emissions from purchased energy, such as district heating or electricity. Scope 3 encompasses all other indirect emissions, including those that result from the company’s activities executed by e.g. suppliers and distributors.

*(2)GHG Protocol establishes comprehensive global standardized frameworks to measure and manage greenhouse gas (GHG) emissions from private and public sector operations, value chains, and mitigation actions.

*(3)IFRS Sustainability Disclosure Standards are intended to provide a global baseline and to be compatible with jurisdiction-specific requirements, including those intended to meet broader stakeholder information needs.

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How to establish a cost savings agenda?

Cost seems to be top-of-mind for most CXOs and retains a high position on the agenda.

The objective of a cost optimization programme could be to fund growth or market expansion, enable innovation in both short- and long-term perspectives, or attain or maintain market position or leadership.

Cost savings initiatives can originate from different perspectives and be quite diverse in nature.  A top strategic agenda which impacts the fundamental way of doing business to address structural costs within the current operating model is one example. A selective focus on tactical and targeted improvements within certain parts of the business could be simple in its rationale but effective in optimising cost and trying out an approach.

 

A structured approach towards the cost savings agenda is essential.

  • Ensure (swift) progress to meet determined targets.
  • Choose and implement a cost-out model to meet desired scope and objective – neither too complicated nor too narrow, but “fit for purpose.”
  • Facilitate necessary shift from a budget perspective to cost cutting, cost optimization or value-driven cost improvements – depending on ambition
  • Ensure long-term savings and cost focus become integral to the business agenda.
  • Avoid typical pitfalls and limit potential risks.

 

OPTICOS APPROACH TO COST OPTIMISATION

Leveraging a hypothesis-driven way of working in close cooperation and clear sign-offs from relevant stakeholders help bolster analysis and execution. Given the scope and an emphasis on cost savings, the overall approach may be tailored to meet the desired business objectives.

Opticos structured and pragmatic approach encompassing five phases to executing a typical cost-out programme.

TYPICAL SUCCESS FACTORS

There are identified factors that significantly impact cost out program success rate where effective program management helps boost progress, manage risks, and increase output.

Methods and areas to work with to help articulate, define and achieve financial goals:

  • Cost optimization
  • Cost transformation or Cost-out
  • Cost mapping
  • Cost allocation
  • Cost assessments and Benchmarking
  • Cost transparency
  • Financial management

 

Areas of knowledge and expertise critical to fully establish a cost-savings agenda:

  • The Sourcing and Procurement domain, e.g. address overall spending – since this often constitutes a large portion of the total cost.
  • The IT Strategy and Digital Business Transformation area provide valuable insights and capabilities to address improvements within the IT and Technology space, often crucial drivers for improvements and cost savings.
  • To drive real business change, broad industry experience is needed to understand the market and the industry dynamics within the industry in scope.
Acquiring access to these three areas of knowledge and expertise before embarking on a cost-saving journey could be added to the success factors mentioned above.

Learn more:

Any questions about our insights? do not hesitate to reach out to:

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Choosing the right automation partner

Choosing the right automation partner for your organization

Making a good choice among hundreds of automation partners operating across the globe can be a challenge. It’s not about finding the best partner – it’s about finding the best fit for your organization.

The path to successfully implementing automation capabilities and solutions depends on the partnership between your organization and the automation partner.

The automation partner of your choice will engage with your company long-term – as the capability area requires a long-term business commitment. Technical skills are not enough.

A compatible work culture, communication style, and the right chemistry go a long way in building a strong partnership.

Nowadays, “automation” is attracting a lot of attention because of several possible and desirable benefits. Here are some of them:

  • Time savings for employees
  • Reduction in errors and human mistakes
  • Decrease time spent performing repetitive tasks
  • Increased business capacity

However, there are also consequences and limitations when entering the area of “automation” to consider. Let us list a few of the most common:

  • Cost and effort (time) to set up
  • Continuous maintenance and support
  • Not suited to deal with low-volume unique scenarios

Considering the above, choosing the right partner will help you to achieve your automation goals and subsequently help you to harvest the fruits of your investment.

At Opticos, we help you to evaluate future automation partners, not only from a technical capabilities standpoint but also from a cultural perspective. Our framework and methodology were developed through extensive industry experience helping customers pick the right partners.

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Don't strangle innovation with KPIs, give it life through empowerment

Innovation is what drives us forward. Today it is something that is invested in and commonly interwoven in business plans and formulated in business and IT strategies. Going forward, however, innovation will more likely be driven across all levels and departments rather than solely from IT and by a selected few e.g. the management, consultants or project groups. Innovation cannot be organized and governed, it is part of the culture and it must grow organically in the company’s entirety. To innovate is to re-imagine, re-defining our existence [1], it is not just another change management project.

According to Forrester “20% of CEOs will fail to act on digital transformation and put their firms at risk”. Innovation will require breaking the boundaries of any hierarchical structure. CEOs will need to be open to new ideas and letting innovators be part of defining the strategy for embracing the digital future. Creating an innovative climate will be crucial. As a result, governance models based on KPIs will become obsolete and irrelevant and ultimately a new governance landscape will emerge.

On a corporate level innovation might come to be driven by all who are interested rather than those with designated roles, allowing a freedom to be innovative. On a societal level, which we must not forget in the context of digitalization, innovation will likely be driven by and in communities of digital activists and freelancers.

 

Learn more about innovation in the future digital society:

Together We Innovate – Innovation in Networks rather than lone geniuses:
https://www.wsj.com/articles/SB118841662730312486
5 Innovation Keys for the Future of Work – five innovation practices:
https://www.inc.com/jacob-morgan/5-innovation-keys-for-the-future-of-work.html

 

 

[1] Götz Werner – Founder of DM (Drogerie Markt) and advocate of basic income.

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Financial management – An essential part of a healthy company

Financial management – An essential part of a healthy company

Financial management is essential for companies to survive. By planning, organizing and controlling financial undertakings you create room for growth.

A prerequisite for optimizing your costs is to understand the current situation as well as how the cost structure of where you are heading will look like. Four key points to remember when assessing costs:

  1. Establish the cost baseline.
  2. Identify and assess opportunities and risks. Analyse and break down spend.
  3. Develop a strategy and a roadmap. Identify where to start and your end goal.
  4. Track the benefits to understand if you are heading in the right direction.

To understand your cost structure and identify addressable spend it is common to look at what costs are fixed, semi-variable and variable in the short, medium and long perspective.

An example of fixed costs, only addressable in a long perspective, is a contract written in a 5-year period. A variable cost in short term is for example to stop buying consultant hours. In order to get fast results and create momentum it can be important to find which costs can be eliminated today.

By setting up a roadmap of short- and long-term cost initiatives you can visualize a timeline stating actions that are most important to start with as well as in what order cost optimizing activities should be performed. More often than not this is a timely and complex task but, quick improvements could be achieved by finding out the following:

A roadmap of activities of cost optimization

Drive the change within line organization

Permanent cost savings are best initiated and driven by the operational business with strong support by top management. It is in operations you can optimize and/or standardize your processes. Some costs are, as mentioned previously, easier to cut while other costs are the opposite – essential. Costs linked to essential processes could, instead of being cut, be optimized.

Today, there are many administrative processes that, by definition, provide low or no value to the end customer or generate no revenue, but are still essential for the company. Usually these processes have been consolidated into shared service centres which in turn could be outsourced to near- or off-shore locations. This has been a formula for cost cutting and lowering the administrative burden on employees. Instead of taking these measures it could be more cost effective to turn to technologies such as Robotic Process Automation.

Robotic process automation is the fastest growing enterprise technology today. By using RPA, companies have the possibility to automate business processes that are many times both costly and time consuming.

There are different levels of how advanced RPA can be. The less advanced levels are nowadays mature technologies with many competing vendors. Here we can find business cases to be made where case studies have shown return of investments of RPA implementation to be between 30-200% already in the first year. The business case is not only built upon increased efficiency where the processes are executed faster. By implementing RPA in existing business systems, it also helps save costs incurred due to human errors. According to estimates from IBM erroneous data input by humans costs $3 trillion per year in the US alone. By implementing RPA, errors for those certain processes are coming down towards 0%, which of course has a positive impact in a business case.

Having a cost-optimization focus is possible regardless of organization maturity, requirements for innovation and change and improving current operations. There are many different ways of achieving this; stop doing, standardizing or re-negotiating contracts. But now we also have the possibility of applying RPA, something which has emerged rapidly in the last couple of years. If you are interested in getting more information, please don’t hesitate to contact us at Opticos.

Read more about financial management and RPA by clicking on following links:

https://www.cio.com/article/3257786/cios-reveal-their-most-essential-it-financial-management-principles.html

https://www.mckinsey.com/industries/financial-services/our-insights/the-value-of-robotic-process-automation

https://isg-one.com/pt/artigos/calculating-a-robot-s-tca-(total-cost-of-automation)

https://assets.kpmg/content/dam/kpmg/pdf/2016/05/rise-of-the-robots.pdf


 [1] https://www.mckinsey.com/industries/financial-services/our-insights/the-value-of-robotic-process-automation
 [2] https://hbr.org/2016/09/bad-data-costs-the-u-s-3-trillion-per-year

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Expecting RPA to improve your business will only cost you time and money

It is easy to fall for the latest trends and buzzwords, it’s what keeps us up to date and relevant. But rarely is it completely applicable and implementable on your organisation as-is. Take the new trend of RPAs for example. Robot Process Automation is seen as a quick road to automation and most importantly cost reduction but what is often overlooked is the fact that RPAs are actions that would have been done by a human (manually) now being done by a robot (automated). Which ultimately means that an inefficient process done manually will be just as inefficient, although somewhat faster, when automated. In other words, RPAs do not improve your processes they simply make them go faster.

According to Forrester, “75% of AI projects will underwhelm because they fail to model operational considerations, causing business leaders to reset the scope of AI investments”[1]. With automation comes vast opportunities for decreased lead times and higher quality – if what is being automated is a fully functioning and effective process/activity. When investing in automating processes it is therefore important to set up a clear business case and plan for the new intelligent layer that is being added as it will require new competence for driving the improvement processes, configurations and much more.

 

Learn more about what RPAs are, how they can be used and what to consider when implementing them:

How to Capitalize on Robotics – Savings Drivers with Digital Labor:

https://www.cio.com/article/3187865/leadership-management/how-to-capitalize-on-robotics-savings-drivers-with-digital-labor.html

How Artificial Intelligence Will Change Everything:

https://www.huffingtonpost.com/entry/how-artificial-intelligence-will-change-everything_us_58e52bd6e4b0ee31ab9533eb?guccounter=1

AI in the Workplace and the future of Robotic Process Automation:

https://soundcloud.com/the-impact-podcast/episode-42-ai-in-the-workplace-and-the-future-of-robotic-process-automation

[1] Forrester, Predictions 2018 – A year of reckoning

If you have any questions about the insights we share or are keen to turn ideas into action, please contact Mattias Gustrin, Head of Insight, +46 734 30 14 92, mattias.gustrin@opticos.se

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Only time (and robots) can tell us what the future holds

47 % of jobs in the United States are at risk of being automated, according to an Oxford study. OECD has found that “close to one in two jobs are likely to be significantly affected by automation” in 32 OECD countries. These statistics can be alarming at first but only if one is not prepared. Denying the inevitable will lead to a deer-in-headlights situation for all companies that have not adapted their modus operandi in time for the coming change that will affect the corporate landscape and the global society.

This is not another Orwellian prophecy – vast transformations toward an increasingly more digital society are inevitable in the next decade. Bain, amongst others, predicts that by 2030 “the global economy will likely be in the midst of a major transformation”.

 

Learn more about the future of employment:

AI & The Future of Work – TED Talk by Volker Hirsch

The Future of Employment: How Susceptible are Jobs to Computerisation?

OECD Social, Employment and Migration Working Papers

Labor 2030: The Collision of Demographics, Automation and Inequality

If you have any questions about the insights we share or are keen to turn ideas into action, please contact Mattias Gustrin, Head of Insight, +46 734 30 14 92, mattias.gustrin@opticos.se

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