“How does it show on the top and bottom line?”

Many process automation projects boast about the number of hours of manual work they’ve saved, and the costs are derived by using an average hourly labor cost.

Unfortunately, too often a crucial question remains unanswered: “How do these saved hours translate into tangible improvements to the top and bottom line?” – But why is this question so often missed?

Based on my experience, it is about incomplete thinking. While saving costs and freeing up employee time are important, focusing only on “freed hours” can be misleading. This limited metric does not help us capture the potential for greater impact on the business. Focusing on hours limits our thinking, and our thinking stops when we’ve identified a case where we can simply exchange human hours with technology. What are left unexamined are the actual top and bottom-line changing aspects: the ways automation will impact growth, revenue and profit – in other words, the impact on business productivity.

 

Reframe to ask more impactful questions

When you reframe the question “How can we save in costs?” differently and ask about business productivity metrics like growth, revenue and profit, you start to get closer to the solutions that will make a larger impact. I have given a longer example in a previous article, but as a brief thought exercise, let’s reformulate the cost savings question and see how it changes our thinking.

Instead of focusing on how many hours it is possible to save, we’ll ask: “How can we keep the current level of output and productivity but produce it by using less resources?”.

 

Can you notice the difference?

I bet the first thing that comes to your mind is not about hours, but likely the question: “What is our current level of output and productivity?”. This is a key question. It helps us create a baseline for our current state which we would like to keep even after the changes. It helps us understand what productivity means in each context for the business. It also helps us to connect the team’s outputs to the outcomes the team is creating for the organization through their work – the “top and bottom line”.

Let’s continue with this thought exercise. The next questions you’ll likely have are “What are we currently doing to produce the results?” and “What are the resources we are currently using to achieve this level of productivity?”. So, we’ll go on to learn about the resources and tasks and how they are organized. While we are doing that, we get to understand what the important components are for achieving the current results.

 

After learning, it’s time to explore!

With an understanding of the important components, we can start exploring and creating scenarios to how we can change things to bring the savings without sacrificing business productivity and customer experience. And we’re not considering just the workers and their hours, we are thinking about the entire system that creates the outcomes.

You will likely notice another thing that is different from before: you’ve freed your thinking to consider a lot more alternatives! And while we are exploring the scenarios, we can also create options about the usage of the freed resources – an important component in realizing the full benefit of automation.

Finally, when we’ve found the most viable option, we proceed to implement it within the business. And once we’ve applied it, we’ll keep perfecting it.

And don’t get me wrong, you might have done well so far, saving hours. What I’m saying is that, inadvertently, you may have left significant value on the table. You can attain that value by changing your mindset and focusing on business productivity – growth, revenue and profit.

It is from this change in mindset where the LEAP-methodology was born. But what are the components of LEAP?

 

L.E.A.P. = Learn, Explore, Apply, Perfect

LEAP is specifically designed as a holistic methodology for digitalization, and it consist of four main phases:

Learn: The first phase focuses on understanding the situation and problem at hand. In this phase we use selected analysis methods to learn about the situation and how it connects to growth, revenue and profit. We create an understanding of the baseline for business productivity and the related resources, such as people, processes, decisions, information flows and structures. We use role archetypes to analyze the type of work people do and include the operational environment in the analysis. As we are doing this, we are reframing the problem to ensure we are solving the root cause and not the symptoms.

Explore: The second phase is about systematically exploring scenarios and the implications of each to the whole. The exploration phase can contain quick tests, and it can add further detail to the analysis, such as limitations on changing certain resources. We use a technology ladder to ensure validity of technological solutions, and the role archetypes guide us on what can make work better for your people. The results of this phase are validated options for solving the problem – with a connected impact on growth, revenue and profit.

Apply: The third phase applies the selected option. Here we use selected project delivery methods based on the type of solution chosen, recognizing that solutions like AI will require a different approach to process automation, or to establishing a Center of Excellence or a governance model, or to implementing a new way-of-work.

Perfect: The final phase is way-of-working where the solution is monitored and the applied solution is adapted to the changing environment, and optimized to further improve the results. It builds on the knowledge gained in the first three phases to ensure that a holistic view is maintained.

 

What is your digital leap to growth, revenue and profit?

There’s a lot more to talk about the LEAP-methodology, but it is best done while handling a real problem. How “Learn”, “Explore”, “Apply” and “Perfect” are practically implemented? What tools and techniques are used in each phase? In the coming articles, I will describe more details of LEAP and discuss practical examples to further illustrate the usage of the methodology.

In the meanwhile, do you have a problem you’d like to get solved? Maybe LEAP can help you. Get connected to tell us more about your situation.