I have previously written about the development of processes: developing processes either as a continuous process (POOGI) or making giant leaps is a great opportunity, but also quite challenging. The company’s own resources may be so tied up in daily operational activities that there is no time for specific development project.

Using consultants in development brings resources and know-how into the company. However without sufficient input from own staff, the know-how and experience will not remain the company’s know-how capital.

Service design may be the answer to this problem. Service design aims to combine the methods used in product design with the development of operations – innovating together and experimenting with different options. Service formatting tasks can be presented in the form of a circle below:

Service design is a more informal way to approach the customer process (than strict processing modelling and development). Its advantages over traditional process development are:

• lighter – less quantitative modelling,
• concrete – let’s immediately go to customer needs and understand it,
• quick – results are obtained quickly (as long as new policies are invented),
• flexible – different options can be tested and their functionality can be verifyed,
• transparency – employees are constantly involved and learn new working methods,
• continuity – work is continuous and not project-like.

Problems with service design can be seen as:

• the holistic view may become blurred – focus is on local optimizations,
• making changes that are too hasty and poorly prepared,
• management becomes ‘nervous’ – constant changes (unless there is good leadership for this),
• there are no metrics to verify the change.

In practice, in service design, the service (product) is divided into parts that can be developed as parts of the whole by iterating and experimenting. The aim is to understand how the customer perceives the company’s services and products.

The service is modeled in a visually easy-to-understand format. This enables employees, suppliers or customers to be involved in development work with a little orientation.

Some time ago, we carried out an analysis of the customer interfaces of a company. The result was surprising: a total of 23 different contact points were identified. The original assumption was that the customer would be met in sales; however, a large part of the customer communication was in fact in logistics, product management and partly in financial management.

Step-by-step development reduces the risk of managing change while quickly delivering results. At the same time, all the company’s expertise and experience in customer work can be helped with the development.

The Finnish Govenment has stopped supporting ELY Development Consulting by the end of 2023. We thank all parties for the good cooperation.

Phoster Oy has been approved as a consultant in ELY development services. ELY’s development services is valid option for implementing a development project, especially for smaller SMEs. The service included the three areas described below:

The aim of the consultancy is to promote, above all, the

• systematic business development,
• controlled growth,
• a clear change in the company’s operations,
• the company’s rise to the next level of business.

Usually, the consultation is started with the Analysis phase. It documents the company’s:

• Financial situation (based e.g. on income statement and balance sheet),
• Current state of activities (physical premises, factory lay-out, warehouses, status of each business process …),
• Strategic development objectives,
• Identification of development potential.

Under the theme of Productivity and digitalisation, we can then jointly develop the company’s operations in the following areas:

• develope the productivity and fluidity of the work,
• improve the efficiency of production or service processes,
• document and develope responsibility for operations, taking into account ecological, economic and social aspects,
• exploring and developing opportunities for utilising technology and digitalisation.

The service is implemented in practice so that the customer submits an application in ELY’s online service (ELY e-services). In this case, the customer asks Phoster Oy / Jouni Leskinen to be a consultant. After the approved application, consultation can be started to the extent agreed. Before the application is sent, you should contact us so that together we can specify the content and extent of the application.

The cost of the service is EUR 260 per day for the customer for Analysis service and EUR 325 per day for Consulting services. In other words, the company may start development with fairly small own financial contribution.

Many companies not only implement the ERP system, but they see the ERP system as part of the digitalisation strategy, which is a holistic link between people, processes and technology. It is therefore necessary to understand the new nature and potential of digitalisation.

What is digital transformation?

Digital transformation is a process of creating new business models and creating the basis for the introduction of new technologies and data models. This is an ongoing process that challenges the management and employees of the company to identify old approaches and, on the other hand, to identify new opportunities at the level of data models and practices.

Digital is not primarily a technology, but a change in thought patterns and practices. The goal is to find organizational thinking mechanisms that enable and lead to the creation and deployment of new service models, data hierarchies, and applications.

What can a digital transformation achieve?

1. Seamless customer experience across customer interface
2. Enables continuous growth by applying mobile, eCommerce and digital sales channels
3. Renew existing services and products with new features
4. Develop strategic decision-making with deeper data analysis
5. Creates and enables a new continuous improvement of culture (POOGI)
6. Facilitate employee participation in the innovation process and in general to generate added value
7. Automation enables workers to apply job targeting to actual value production.

The maturity of the digitalisation of companies can be outlined in the following field:

Steps to Digital transformation

1. Understand strategic goals

The objectives need to be clarified especially from a customer perspective. Is it intended to create new business models or is it intended to improve the profitability of existing products?

Is it a small step in the process of development or radical change?

2. Analyze your organization's current culture and efficiency

What is the organizational attitude and readiness for continuous development? What is efficiency? Is there an instrument cluster for measuring efficiency?

What factors contradict the objectives of digitalisation and the current business culture?

3. Focus on developing human capacities and skills

Is organisational culture allowed open debate and encouragement for innovation and problem solving? Make a change management plan that comprehensively handles all change areas.

Strategic objectives should be set as the starting point for change management.

4. Put the focus on value production

Modelling of current processes and their pain points is a good starting point for the development of value production.

New value production processes can be modeled either (a) top-down value chain mapping (a) or (b) bottom-up value stream mapping. These can be used as a model for best practices in this field or can be introduced into a broader framework for development (e.g. Lean/Six Sigma).

5. Analyze existing data warehouses, their value and timability

Data quality is a critical component in the development of digitalisation. The existing data should be developed from two perspectives: (1) The accuracy of data, (2) data coverage.

These requirements require that existing information be cleaned and, on the other hand, enriched with new data elements.

6. Choose the new technology you need and also take it to the

To manage change, we need a technology road map. This is important in order to coordinate the steps that take place in stages in the desired direction. At the same time, a reference framework is created to assess the technical compatibility, cost-of-Cost-of-Ownership and deployment models.

A lot of work has already been done to develop digitalisation. The level of digital maturity can be outlined in different industries in the diagram below:

1.     Customer

The customer experience is the essence of everything. The customer can be involved in a business interaction with new processes and technical opportunities. Is the customer also at the centre of the strategy?

Technology can allow for an easier customer experience: common and up-to-date product information, easy and fast customer service, transparent delivery process, well-maintained warranty process.

Communication can significantly develop the Customer Experience: blog, vblog, podcast, chat, bot and chatbot are few examples of that.

2.   Operational efficiency

IT can continue to make a significant contribution to improving business efficiency.

This requires that business processes are also designed and developed in the IT considerations. Existing policies should be challenged (constructively) and together with new flexible and effective procedures. Flexible (Agile) procedures for both IT and business development are a good basis for the development of operational efficiency.

Less is more!

3. Cost control and cost transparency

The price of digital services has declined significantly. However, this is only one cost factor; Every service also needs to be really occupied. The service is expensive even if the unit price is affordable.

In particular, the difference between investment and operating cost is blurred. This must be clarified in order to make cost awareness widely known to the organization.

The role of it remains a great opportunity for reporting product and customer profitability. Even better basic data management (Master Data) gives a significant improvement in cost control.

4.    Development Management

The development of IT and business must also be done in well managed process. We must clearly clarify the business strategy, the orientation of the IT strategy based on this, and then link development plan between these two.

No good plan is worth anything unless it is implemented. That is why business management in a rapidly changing business environment is even more important. The rapid development steps (scrums) must not be an unplanned tinkering, but a decisive and planned progression.

5.   Artificial Intelligence and ethics

Most businesses are increasingly dealing with artificial intelligence (AI). We continuously use more or less consciously different algorithms. In manufacturing industry we have IoT and further Industry 4.0, which are becoming a everyday technology. Customer work is shifting to ‘bot’ and ‘robot’ time.

The effects of these must be identified and consequences must be defined based on the company’s values. Corporate management cannot leave this to the technicians.

The year 2020 will be really challenging, but inspiring.

1. Strategic objective

The strategic objective will be brighteing up. The goal must be seen as a short-and long-term development path.

The objectives must be clear in order to draft development projects. Clear targets include growth (growth in turnover of 20%, three new products annually, cost reductions, development of employee motivation through new working methods).

The objectives must also be communicating so that everyone is clear; Similarly, we must define what is expected to achieve the objectives. Communication is done by creating a company strategy Plan (blueprint).

2. Background work

Background work is an integral part of architectural creation. The background work must include:

• Sufficient current state analysis (customers, products, processes)
• Megatrends, Industry Foresight
• Competition profile/SWOT/PESTLE.

It may occasionally be appropriate to carry out an external market investigation to determine the expectations of the current and emerging markets. Customers ‘ ability and willingness to pay for products or services can open their eyes to see new opportunities.

Background work is also an organizational training for future transformation projects.

3. Skills and Resources

As the system architecture is comprehensive and complete, the project will also be resourdable correctly. The right people will ensure that difficult decisions can also be taken effectively: the financing of the project and the necessary persons will be made available as needed.

The core of the architecture team must be the CEO or, indeed, in the big companies, at least a member of the management team with an adequate view of the company’s strategy process.

To manage your workflow, strategy material, and development programs, you may need to obtain a software tool designed to use it (e.g. Fingertip, Orbus/iServer…).

4. Create a system architecture

The system architecture itself is built as a project – later its maintenance is part of a continuous development effort. The ITIL model or the TOGAF reference framework may, where applicable, be used as a reference frame. The Zachman Cage can also be a good tool.

However, none of the tools can substitute for your own thinking!

The architecture must include:

• Business
• Information management Perspective
• Information Systems
• Infrastructure

The architecture must be balanced in terms of business and technology.

5. Careful planning

Architectural construction is a very wide-ranging project, so construction needs to be carefully planned. Without good planning, the whole project begins to stretch and be randomly controlled by the current acute situation.

In planning, you should include an external entity that is able to compile a schedule that is disconnected from the company’s internist power games. This ensures a balanced project progression and the best result.

6. Change Management

In a changing competitive situation, organisations seem to have a tendency to stick to existing practices. To overcome this situation, consider the change planning to be included right from the start.

Managed change management clarifies the project’s objectives, impacts on operations and organization, creates policies to identify changes, strengthens roles and responsibilities. You should also take advantage of an existing model in change management (e.g. Kotter 8 Step Model).

The progress of the change must be continuously monitored and deviations must be responded to according to the plan.

Development of the manufacturing company has progressed to the Industry 4.0 phase. In this case, independent decision-making is used to automate production and reach a new level in terms of quality and capacity control.

This technology is based on smart actuators, big data and cloud services. This development phase has been evolved according to the following trajectory:

When the devices are capable of advanced learning based on an increasing knowledge base, the production system can be developed on a new footing. IoT enables continuous data collection and large Data collection. Simulations allow different scenarios to be tested before even exporting to production or in production in the selection of different delivery options. Augmented reality (AR) can enhance training or bring new dimensions to the analysis of anomalies and problems.

All of this relies on the effective integration between the various systems, in which case independent equipment and subsystems are in real-time contact with each other.

Industry 4.0 will Revoluton production, but not necessarily overnight, but as the old equipment fleet is replaced with a new one. That is why we need a strategic view that the development of production is in the right direction.

By carrying out careful whole design, we can avoid wasted investments and the use of time for matters that are irrelevant to the whole.

The most economical system is a system that does not need to be implemented …

However, most companies benefit significantly from the integrated system, because experience shows that it supports the growth and development of the company. The integrated system is an ERP system (Enterprise Resource Planning System), but it is more than a planning tool as it’s name suggests: it’s the backbone of business and information management at its best.

The ERP system’s proven benefits include:

1. Operational planning
   1. SCM – Purchase intensialization, warehouse management
   2. Production control
   3. Customer Service Boost (Customer promise: speed, availability)
2. Process and data management integration
3. Processes can be automated more efficiently
4. Improved data transparency
5. Data Management Harmonds
   1. Single and common Master data
   2. Common information methods (product groups, etc.)
   3. Clear responsibilities
6. Managed System Solution
   1. Fewer systems
   2. Less maintainating
7. Development of reporting
   1. Cost control

 The challenges of acquiring the ERP system are:

1. The demanding selection of the project
   1. Describe a business model
   2. Describing processes
2. ISO System Project
   1. A vast and complex project
   2. Extensive impacts
   3. Operational and deployment risks
3. Change Management
   1. Change management needs to be designed and coordinated
4. Costs
   1. The cost of the project is high
   2. Requires continuous maintenance

Despite all the foregoing, most companies benefit from the overall system. Better business planning, improved customer service, better management of inventories are things that should interest every company.  

Improved forecasting utilises both the entire supply chain and the economic planning. The realisation of benefits requires the coordination and development of holistic activities (processes) and tools (policies, software, training, support).

The purchase of the system must be taken seriously, invested in it and need to be seen. A workable overall system does not arise by chance but as a result of good planning.

Business Process Modeling strives to provide a complete overview of the processes and their integration with each other and more broadly to the strategic goals of the enterprise. Modeling aims to produce a holistic image of the business processes and tasks at the detail level. Modeling is not an end in itself – making a picture because of the image. Modeling is above all:

• Learning event
• Theme Interview
• Strenghts and problems analysis
• Open Inter-role communication
• Brainstorming
• Team building.

The process map is created as a co-product and is a special case of the meeting memo.

Often, the process image needs to be supplemented by surveys, numerical analysis and the collection of documents (prints, documents, work instructions, etc.). These all together form an image of the action.

An essential working stage is the analysis and documentation of development needs. They are based on the findings of documentation and management-defined guidelines. Clear strategy objectives are a backbone of the design of development projects. Without a clear common goal, development projects will be randomly controlled according to local sub-optimizations.

Sometimes, the notation of modelling may have a bigger emphasis (e.g., should we used strictly BPMN). However, our experience is that the notation used is not so important: most importat is that communication is conducted transparently and that the relevant elements are identified and there is ability to document the conducted dialogue.

Phoster is your partner in the development of business operations. We consult companies in the implementation of the strategy, process development, transformational and information technology areas.

We rely on transformational tools, open dialogs, and systemaolithic modelling. For modeling, we use a tool such as QPR EnterpriseArchitect software. Also, MS vision and IBM Blueworks are familiar, and sometimes even MS PowerPoint can work as a sufficient tool.

Our working method is an open and challenging dialogue and a bold introduction to new ideas.