This commentary was written by Reginald Twigg, director of product marketing at ABBYY. The views expressed here are solely those of the author and do not necessarily represent the views of FreightWaves or its affiliates.
By Reginald Twigg
You’ve read the news — first, the COVID-19 pandemic disrupted the global supply chain, then two major container ships blocked the Suez Canal. Confounding the long-term effects of the pandemic, ports are continuing to lock down, including the Yantian Port, which threw another wrench in an already fragile supply chain ecosystem.
Despite significant investments in digital transformation, often for ensuring resilience, the industry has struggled to get its grip on these disruptions. In fact, a recent survey reveals that digital technology investments are not delivering results. Investments in automation and analytics to solve these problems have either not worked as intended (62%) or have been tossed aside altogether (23%). Anyone considering these investments should take immediate pause.
Transport and logistics professionals shared in a recent survey that their bottom lines suffered (46%) and financial goals weren’t met (46%). They expect this will lead to falling behind the competition (54%), with nearly half of survey respondents reporting missed business opportunities.
These results spell out financial disaster for an industry that already has little margin for error. The numbers are alarming when research points to the fact that companies are investing in technology with the goal of removing risk and friction from the supply chain and it is not delivering on that promise.
If you’re asking why this is happening, you’re on the right track. Let’s unpack why digital transformation is not working as expected and steps you can take to ensure positive outcomes and a strong ROI.
What is your content telling you?
Investments in digital transformation for transport and logistics are heavily geared toward trying to understand content — from data analytics (62%) to intelligent document processing (IDP, 46%) and robotic process automation (RPA, 46%). The results suggest two things: one, that automation technology alone does not deliver resilience against disruptions, and two, that technology may, in fact, be part of the problem.
One lesson from the research is that the technology that industry leaders are using today treats the symptoms of disruptions as automation problems, but the root causes are in the complex interdependencies among events, people and processes and the content they use. Companies need a holistic view of their entire workflow in order to ensure automation can cross the T’s and dot the I’s.
A disjointed approach will only spell disaster.
Events like the COVID-19 pandemic are globally significant and unavoidable. But even a sophisticated automation solution needs to do more than automate a process. After all, it’s possible to automate everything and solve nothing if the process is broken and contains behaviors that disable its ability to respond to disruptive events — both internal and external. This is what the research is showing in the serious gap between investment and desired outcomes.
A new playbook for digital transformation
When it comes to digital transformation in the COVID era, the reality is that the rules have changed. Automation for its own sake has given way to questions about process effectiveness and resilience, and we are seeing “experience” growing as a direct measure of success in technology investment — both for employees and customers.
Industry leaders must remove friction from the experience in a value chain, while meeting service-level agreements, profit objectives and competitive positioning — all with the realization that experience is the common driver.
If technology must evolve for sustainable and adaptable outcomes, companies should think about investing in process-mining tools that understand how people and content behave in their processes. Ask yourself if there are problematic behaviors in the way your processes interact with people and content, then look for a solution that seeks to remove them. Then ask how they impact experience as a driver on your business.
The good news is that companies are on the right track.
Nearly half of supply chain professionals expect a budget increase for digital transformation projects in the next year, notably toward low-code/no-code platforms, IDP and RPA. This commitment points to the fact that content and agility are key to digital transformation, but the current gap between investment and desired outcomes suggests that it is not solving the problem.
The foundation for better digital transformation results is in understanding whether your content is facilitating, or working against, your process agility. With experience emerging as a key measure of digital outcomes, we should expect greater focus on solutions that remove friction from the processes that enable it.
This idea is reinforced by the fact that companies plan to invest more in process-mining technology next year — 46% compared to the 38% that use process-mining today. But what is driving these investments?
The answer is simple: Companies realize that their processes can make them vulnerable but don’t know where their vulnerabilities are. And they don’t know how processes behave when interacting with the content and people who rely on them. This explains how experience is changing how technology investments are measured.
For an industry that impacts nearly every other sector, and at the same time is most vulnerable to disruptions like COVID and shipping incidents, leaders will do well to focus on technology that changes their processes for greater agility to handle disruption, with a sharp eye on customer experience as the measure of their success.
About the author
Reginald Twigg, the director of product management at ABBYY, has a background in bringing technology innovation to market. He graduated from the University of Utah with a doctorate in communications.