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Why Value Targeting Is The Most Important Step In Digital Transformation
When building an organization’s hyper-automation suite, many companies go through some level of discovery. Today, leaders can waste money and months of discovery time on projects that require every detail of every process to be reviewed even though a number of those processes may have a weak benefit case. In fact, researchers found that 30-50% of initial robotic process automation (RPA) projects fail and often it’s because companies do not have an effective business case. While this statistic can be alarming, that number will likely only increase as automation becomes more complex. This is where value targeting can help.
Value targeting is a pre-discovery activity that organizations perform to provide a list of strong benefit cases. By staying high-level, as compared to common discoveries that are more intricate, leaders quickly and efficiently view areas of opportunities within their processes, cutting down wasted time and providing leadership with action plans on where to hunt for the greatest efficiency gains.
Value Targeting Vs Common Discovery Processes
The common discovery approach requires weeks of gathering information, creating process maps, understanding the full technology landscape and transcribing each slight variation of every task. Although this approach has a similar outcome, value targeting gets to the root of the business goal in a fraction of the time.
For example, when asked to perform a value targeting exercise with a major healthcare provider, we helped the client understand how their current business model could scale for higher volumes in the future, as well as how to provide a better experience for their employees and customers. Through process decomposition, a process actor study and an opportunity assessment to develop transformation recommendations, the client saw a 12% reduction in the time spent to provide a Continuous Quality Improvement (CQI) health service.
By using this cost-effective methodology, leaders can identify quick wins and create a new pipeline of transformation opportunities for their digital journey.
How Value Targeting Works
Value targeting begins by capturing how and when end-to-end processes are performed, who is performing them and how systems enable them today. It provides an understanding of baseline information around processes, in-scope organizations and systems used to accelerate and facilitate workshops and field studies. To put this in action: We worked with a large insurance provider to reimagine the ‘future of their claims’ with straight-through processing. We started by exploring the following questions through 30 stakeholder interviewers on both the technical and business side:
- How does your customer journey influence the future claim handler process/workflow and visa-versa?
- How are the capabilities (i.e. assignment) being incorporated into the future claim handler process/workflow?
Similarly, workshops can be held with subject matter experts and process/product owners to capture details pertaining to volume, effort, systems and other relevant information to process activities, including exceptions and variations while the processes are broken down by activity level.
From there, value targeting helps recommend and prioritize initiatives and actions and are substantiated by the quantitative value delivered back to the business. A top-down assessment of targeted processes is performed while leveraging all the quantitative and qualitative insights gathered to provide a prioritized backlog of transformation opportunities, along with benefit realization recommendations that strategically align with the corporate transformation roadmap.
By going through these steps to implement value targeting, organizations can benefit in a variety of ways, including:
- Increased flexibility and resilience to emerging or changing business environments and disruptive environmental patterns
- Improved customer satisfaction and engagement
- Enhanced accuracy and quality of decisions and outputs
- Increased profitability through cost reduction
- Decreased demand fluctuations and seasonal variations through scalability and flexibility
Value targeting is the ideal solution to provide a backlog of transformation opportunities, which will identify quick wins as well as long-term improvements to work towards future state vision goals. Whether an organization is just starting out on their transformation journey or a seasoned veteran, value targeting can increase efficiencies and buy-in within an organization. If an organization is already far along in their transformation journey, value targeting provides the ability to scale and shows a roadmap for more complex hyper-automation tools that can generate a higher return on investment.