The hidden advantages of process transparency
‘Transparent processes can save organizations a lot of money,’ CFO Services Client partner Maddy Lauwers said in an interview on our website. ‘In general we estimate the savings from process transparency at around 20 percent.’
Considering the fact that one-off exercises to document processes often lead to scope changes and budget and time overruns, savings from process transparency amounting to 20 percent in large implementation projects (e.g. new ERP implementations) are indeed realistic.
In this article, I will highlight 3 further advantages of process transparency that will save your organization even more. Rest assured the list isn’t exhaustive.
Article written by Dieter Verbeek, project consultant, Processes for Transparency, CFO Services.
1. Process transparency decreases the time spent on searching for documentation
Despite ever improving technology the amount of documentation in organizations has risen to levels where employees can’t find relevant information anymore. There’s plenty of research to underline this:
- A recent IHS Knowledge Collections Webinar concluded that an engineer’s time spent searching for information has increased 13 percent since 2002.
- Interact reported that ‘19.8 percent of business time – the equivalent of one day per working week – is wasted by employees searching for information to do their job effectively’.
- IDC data shows that ‘the knowledge worker spends about 2,5 hours per day, or roughly 30 percent of the workday, searching for information….’
So, with an average of 25 percent of working time needed for documentation search, organizations basically hire 5 people to do the work, while only 4 of them show up.
Doing the math for a medium sized enterprise with 500 knowledge workers will shed some light on the magnitude of the cost savings that process transparency can bring. With a monthly wage cost for the employer of 5000 euros each, these 500 knowledge workers would generate a total monthly wage cost of 2,5 million euros. Reducing the working time spent on searching information from 25 percent to 15 percent after processes have been made transparent, would reduce the total wage cost for the company from 625.000 euros to 375.000 euros, or a saving of 250.000 euros.
These time and cost findings really put it into perspective how much resources are being wasted. This is only the saving from a diminished search as such. The cut in productivity loss of not finding (appropriate, updated, correct) information will only add to this cost. Information is useless if it can’t be found. Let’s take a look at this productivity.
2. Process transparency leads to improved collaboration within the organization
Social media made the world more transparent. It created a world centered around sharing the best places to eat, visit, travel, see,... So why not transfer that practice to the workplace?
Companies will go on developing ways to reach consumers through social technologies, gathering insights for product development, marketing and customer service. Yet the McKinsey Global Institute (MGI) finds that using social tools to enhance communications, knowledge sharing, and collaboration within and across organizations potentially generates twice as much value.
In a way, social media sharing is process transparency all over: sharing best practices, workarounds, what not to do and why not to do it. The research states the most powerful applications of social technologies in the global economy are largely untapped. By limiting documentation search, social technologies can also raise the productivity of those interacting. The numbers speak for themselves.
Social media has spread incredibly fast and undergone massive changes. It now stands as a near-ubiquitous technology and is almost unavoidable in the workplace.
Rather than police your employees using this technology, encourage them to use it productively. Steer them in the right direction. To share best practices, what to do in certain situations and what not to and why (not) and by doing so they create even more process transparency.
3. Process transparency makes training more efficient and effective
It’s not just the search for documentation or the untapped possibilities of social technology that are hidden costs for organizations today.
Related to both topics is the actual use of this documentation. Process transparency has a crucial role to play on this level also. An overview of the applications that are to be used in certain activities, the legal requirements why that activity is mandatory, the latest up-to-date work instructions: these are all crucial requirements to do the job properly.
The availability, accessibility and usability of this documentation should therefore be as important in the learning and development traject of new employees as it is in the retention of existing ones. Otherwise, ‘bad habits’ are taught on Day 1, wrong documents are used over and over again and workaround methods are passed from one employee to another instead of using technology to its full potential.
A 2014 Harvard Business Review article reported that, over the past decade, employers have repeatedly mentioned experiencing difficulties to find people with the right skills for today’s jobs. At the same time employees acknowledge they need better skills to do their jobs.
The skills gap is not mainly about too little schooling. Every employee once entered their new employers building with confidence that their studies and/or previous work experience were sufficient to make an immediate difference. After a first introduction in the organization’s complexity, uncertainty started to arise: How could they possibly get an overview of all the information that is available in the organization?
It rarely happens an employee arrives fully-formed, ready to hit the ground running with all the skills, knowledge and expertise that your organization requires. Employees know the skills gap is real, and they’re trying to close it. Seventy-two percent of workers reported on by HBR said they needed to learn new skills for their current job. According to the survey, employers generally play an important role in helping workers learn. By creating process transparency, they can make training and development also efficient and effective.
The unlimited potential of process transparency
A lot of research exists on business process management. These 3 more hidden advantages demonstrate the underlying value of real process transparency. It is not focused solely on process documentation. That is only the starting point, but it will be history tomorrow if not kept up to date.
In this fast changing world process transparency is a lever to increase your employees’ productivity by keeping the documentation available and up to date, sharpening their skills in the right way and by increasing collaboration. Research proves process transparency has an unlimited potential for any organization. Many business leaders recognize its importance, but only few have put it to the test.