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IMPLEMENTATION OF BUSINESS PROCESS AUTOMATION - PART 2

April 2, 2019

Lecture #4 Part #2

 

STEP 2: UNDERSTAND THE RULES AND REGULATIONS UNDER WHICH ENTERPRISE NEEDS TO COMPLY WITH

 

Before implementing the Business Process Automation (BPA), a company has to comply with number of rules and regulations which includes complying with internal policies and externally with industry guidelines, state laws and central laws. This is known as understanding the Rules of Engagement. In India, certain laws governing the companies like Companies Act, Income Tax Act and GST requires a company to maintain certain documents in specified formats. All these have to be kept in mind before implementing the business process automation. 

 

Example: In India, Companies Act, 2013 requires companies to maintain the Books of Accounts for a period of 8 years from the end of the relevant financial year. While automating the business process, it is imperative to take this into consideration.

 

STEP 3: DOCUMENT THE PROCESS WHICH HAS TO BE AUTOMATED

 

This step is to automate all important documents that an entity uses. While automating it, few questions are to be answered to make the automation successful.

 

The reasons are:

  • It provides good clarity in the automation process.

  • It helps to determine the places where there are inefficiency, bottlenecks and problems faced by the entity.

  • It helps to break the current process into digestible pieces to understand them better.

Here are the important questions to be answered

 

  • What documents need to be captured?

  • Where do they come from?

  • What format are they in? Paper, FAX, Email, PDF etc?

  • Who is responsible and involved in processing of these documents?: Find out the person who was earlier responsible for processing them.

  • What is the impact of regulations on processing these documents?

  • Can there be a better way to do the same job?

  • How are the exceptions in the process handled?

 

Usually, in real life scenarios, the entire process in sketched on a piece of paper or in MS Word or Visio in flow chart format. The company has to ensure that the automation process is successful and error free as the company would have spent considerable, time, effort, cost and manpower in doing it.

 

The technology used has to ensure that the information is accurate and provided on a timely manner, with optimum cost, to the right person and in safe and secure manner.

 

It has to be ensured that only the person who is authorized to view the data is given the access and the data does not get into the hands of other employees to whom it should not be shared with. A classic example will be the salary details. These are considered confidential and are given access only to the Team Manager and people in HR department.

 

STEP 4: DEFINE THE OBJECTIVES/ GOALS TO BE ACHIEVED BY IMPLEMENTING BPA

 

The next step is to define the objectives or goals to be achieved by BPA, to justify its implementation. SMART goals

 

Specific (S): Goals need to be clearly defined and identified.

 

Measurable (M): The benefits should be capable of being expressed in monetary terms, which means that it should be measurable.

Example: The benefit of implementing BPA for the company XYZ Co is that XYZ Co would save Rs.50 Lakhs a year upon implementation of the BPA.

 

Attainable (A):The goals must be realistic and achievable. You cannot build castles in air.

 

Relevant (R): The entity cannot implement a BPA, just because its competitor is doing it or few other companies are doing it. It must be kept in mind that the entity must be actually in need of automation.

 

Timely (T): The implementation must not take too long, but it must be completed within reasonable time frame.

 

SMART

 

STEP 5: ENGAGE BUSINESS PROCESS CONSULTANT

 

The next step is to identify the business process consultant. As discussed earlier, consultants are people well trained in automation and have considerable experience in implementing the automation process for various companies. The consultants available in the market must be carefully evaluated and selected. Few parameters are listed in ICAI's study material as essential steps in evaluating these consultants. Let me explain them to you.

 

Objectivity of the consultant in understanding/ evaluating the entity's situation: It says that the consultant engaged must be able to evaluate and understand the company's present situation with fairness and without prejudice.

 

Experience with the entity's business process: The next important aspect it says is to determine if the consultants have good amount of experience in automating similar business processes.

 

Experience in resolving critical business issues: Consultants are said to be competent enough, only if they have proven track record of handling and resolving critical business issues with the automation.

 

Capable of recommending combination of hardware, software and services: It also says that the consultant must posses adequate knowledge in various hardware, software, services and should be able to suggest the best mix according to the entity's nature.

 

Consultant's must have required expertise to articulate the business value of every proposed solution: Every solution that the consultant proposes must be able to add value to the business. He should be able to explain these benefits well to the management. He will be able to do it, only if he has good expertise in the field.

 

STEP 6: CALCULATE ROI OF THE PROJECT

 

As discussed earlier, a company incurs huge cost in implementing the Business Process Automation. Incurring such huge costs are justified only if the investment results in some good returns for the entity. The returns should not only be in the form of cost savings but should also be able to improve efficiency and effectiveness of the overall operations of the entity. It should also be ensured that the implementation is technically and financially feasible. Technical feasibility would mean, if the company already has the hardware, software and staffs which is required for implementation of BPA. If not, at the minimum, the company should be ready to make it ready by incurring the required cost. Similary, financial feasibility would mean that the entity must have adequate cash or money to implement BPA which usually requires quite a good amount of investment. All these have to be used in convincing the Senior Management of the company to give a go-ahead for implementing BPA.

 

The cost savings after implementing the BPA should be in the following areas:

 

a) It must result in reduction in required manpower, so that new recruits should no longer be needed in some areas and considerably reduced in some other areas. This will considerably reduce the salary cost to the company.

 

b) If employees leave the organization, the company should be able to continue with its operations without replacing them. This will considerably reduce the salary cost to the company.

 

c) Space saving which was earlier occupied by huge paper files and cabinets.

 

d) All savings in interest and penalties due to late payment to suppliers.

 

e) Reducing audit cost, due to reduction in audit hours and making the audit process easier.

 

f) Taking advantage of all discounts on early payments, because the system is in place to provide timely reminders or even automate the payment process in timely manner.

 

g) Ensuring complete documentation of all processes, thereby making the processes seamless.

 

h) Improving the cash cycle by taking steps to collect cash from debtors.4

 

i) The BPA must create new revenue generation opportunities.

 

j) BPA must help company improve their customer service manifold, leaving a satisfied customer and make him provide more business opportunities to the company.

 

These are some of the facts which can be presented to the management to give a go ahead for implementation of BPA.

 

STEP 7: DEVELOPING THE BPA

 

After completing all the steps above, the consultants engaged by the company develops BPA with required hardware, software and others.

 

STEP 8: TESTING THE BPA

 

Any software development, requires testing to ensure that it works according to the specifications and does not face any problem. Similarly, the developed BPA also goes through the testing process. Testing is done to remove all errors or problems while using BPA. It also allows room for improvements and ensures that the company's specification is met.

 


Then something called as User Acceptance Test is also carried out, where the employees of the companies are given to test the automated process in their respective work areas. This is done to fix errors if any which crops up when they test and from their perspective, make them get a feel about the automated system, reduces their resistance to change in the way they were doing this job and make them adopt to this new technology in a smooth manner.

 

Finally, the entire process is then documented. The documented process provides a proof, serves as a reference and can be used to train new employees.

 

If you have not already, to get a short and quick revision notes on the above topic, drop us an email to therankholder@gmail.com.

 

Catch you up in our next interesting lecture.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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