Nov 16, 2017 Lauren Ruef
Companies that gain the long-term advantage over their competition have a little secret. Their wins are not from sweeping changes but from small, yet strategic improvements. The law of incremental gains shows us how having smarter business processes helps us win. And those who have the winning edge through automation know this best.
Workflows are the cogs that propel organizations toward success—or failure—each day. And it's automated workflows that help companies achieve successful, behind-the-scenes processes. While this is true, many still refuse to take a second look at them.
In our age of machine learning, artificial intelligence, and robotic process automation, the sky's the limit on what we can imagine. But in a more practical sense, we can start in places as small as the back office.
The individual pieces of the workflow are just as important as the whole. - Nvoicepay
A patchwork of legacy technology is a recipe for disaster for any company. Legacy technology encourages and maintains siloed workflows within your organization, which act as barriers to communication and transmission of ideas that move the company forward.
Silo: Not just a buzzword
Silos contribute to problems flowing from lack of automation. Manual workflows and disjointed communication can cause the whole organization to suffer.
Patrick Lencioni defines why silos are so dangerous to organizations in his book Silos, Politics, and Turf Wars:
"Silos—and the turf wars they enable—devastate organizations. They waste resources, kill productivity, and jeopardize the achievement of goals."
Silos happen when teams incite turf wars or refuse to accept change because "this is the way things have always been." Silos can represent technology holdouts within your company, or simply those that are inflexible to cooperating with others. They keep to themselves, and on all sides , the company loses.
But silos can also be physical barriers like legacy technology, manual workflows, or other inefficient processes that bar visibility or efficiency. Here are some of the most common silos businesses experience.
A cultural silo happens when a company takes on a new vision or change brought by new leadership or a shift in mission, and the rest of the company is slow to adopt it. Whether teams are resistant or just slow to change, the friction it causes can contribute to a loss of morale.
Departments that are obstinate in working cross-departmentally, or helping out other areas of the company, regard individual contribution above shared success. This fosters negativity and resentment within the company as a whole. And upholding company culture and preventing turnover is one of the most basic things companies should do to hold onto good people.
Breaking through these cultural silos can mean hiring additional managers to help department work together, bringing the company together for morale-building activities, or having regular meetings with heads of departments to break down communication barriers until attempts to collaborate are not met with resistance.
Legacy technology silos
This is another fairly common scenario. Companies can lag behind the competition because they are weighed down by operational inefficiencies. Manual processes, such as cutting paper checks, and data silos can cause bottlenecks that translate into decreased performance on a company-wide level. The best way to cure a legacy technology silo is to seek ways to introduce automation to menial tasks that are prone to error or involve a duplication of effort. The back office is usually one that is prime for automation in most companies, as well as other areas like the supply chain.
A data silo happens when a company is unable to share information freely with multiple parties due to lack of efficiency or tools that allow approved gatekeepers access to vital information. Without eyes on key business insights, companies cannot see problem areas or pain points where they are losing revenue. This is equivalent to a plane flying without radar. Data silos are dangerous because of how quickly a company can veer off course without visibility.
Operational silos can be illustrated by an example as recent as Tesla failing to meet its forecasted production goal for the Model 3, stemming from "a small number of suppliers failing to deliver on time." Manufacturing bottlenecks is an excellent example of what happens when big results are dependent on a smaller linchpins—such as a group of suppliers or a team that's underperforming—for the company's overall success. When a patchwork of legacy technology starts to show its true colors in laggardly production schedules and errors, good workflows are more important than ever. Streamlining product with technology, without compromising quality, is essential to the survival of any company, even those as progressive as Tesla.
Duplicated effort silos
In every company, there are areas where duplication of effort is dismantling productivity. The enormously frustrating result: tracking manual approvals, reworking tasks that have already been completed, and poor communication. And because manual processes are nearly impossible to track, visibility into these issues may be non-existent. Duplicated efforts can ruin the back office, especially when it comes to paying suppliers. If manually approving checks is how your organization handles supplier payments, they are likely to arrive late, or worse yet, contain errors. The issue of duplicated efforts ties into all the rest. When your business lacks visibility, operational efficiency, or good communication, it cannot hope to win against competitors with so many demons to battle internally.
Silos come in many shapes and sizes, but the damage caused is universal
While the prospect of automation may seem daunting, waiting to disrupt silos isn't a better alternative. Companies can lose hundreds of thousands of dollars, or even more precious—time, when automation is unnecessarily delayed.
The bigger a company grows, the more sensitive its growth is to operational costs, like using paper checks to make business payments or gaps where wasted product is hemorrhaging the supply chain. Don't table the automation conversation for next year. Determine which of these silos is affecting your organization and see how automation is the cure you've long needed.