In this excerpt from the podcast, Mathias Kirchmer, one of the founders of BPM-D and Peter Schooff, Managing Editor of BPM.com, discuss digitalization and how to do it right.
PETER:I've been hearing a lot about digitalization so can you just tell me what is digitalization and how have corporate strategies changed in this new digital world?
MATTHIAS: Yah, that's of course a very hot topic and I'm currently also working with some of the universities I'm affiliated with on a research initiative in that area. Digitalization is basically, the integration of products as physical objects, people and processes through the internet of things. Often we use the term the “internet of everything” because everything and everybody is interconnected. That new integrated world creates for companies opportunities for complete new business models. For example, machinery company that produces compressors and used to sell those compressors as physical products, now can move to a business model to sell compressed air as a service. They just install the compressors at their client’s site, manage the compressor through the internet and they bill per month the amount of compressed air that the client used. So they establish a new value proposition, they have people with a new qualification to deliver all that and of course, they have very different processes in place. You can move your organization to the next level through digitalization - if you do it right.
PETER: OK, so that leads to the next question, how does BPM help in the context of digitalization? How does it help do it right?
MATTHIAS: If you look at the key components of digitalization you see that the products normally well managed through product managers and product marketing., As a company you normally also have a good management discipline around your people with your human resources organization. In most cases you also have a good information technology capability in place that can take care about technology topics, including the internet connection. However, what is in many organizations missing is a management discipline around their processes. If you cannot adjust your processes systematically according to your new business model and your new strategy, you end up not realizing the full potential of digitalization or you even don't realize any real business value at all. So it's very, very key that companies build a real management discipline around their processes, a discipline that moves strategy into IT and people based execution. That’s absolutely crucial to be successful in our digital world.
PETER: That sounds fantastic. Now, in the final takeaway that you think people should have, what would you say is the key takeaway in this discipline of value driven process management?
MATTHIAS: Yah, BPM was over many, many years a field where practitioners focused on developing new methods, tools, approaches and provide them to companies. So the whole domain was very tool and technology focused. Now we are in the lucky situation that many of those tools, technologies and approaches are on a high maturity level so that we can really focus on creating business outcomes using those tools and technologies. Value driven process management is all about focusing on value, focusing on outcomes. That's why we can now talk about BPM as a real management discipline that provides value by transferring strategy into people and IT based execution at pace with certainty..