Introduction

 
Many of you will have heard of the term “tech debt”. This is short for technology debt, which simply means that the organisation has not kept its systems up to date. This creates a situation whereby the applications are fragile, particularly when used together, or are no longer fit for purpose. However, you may be less familiar with an associated term known as “process debt”, which is when an organisation has not regularly reviewed or kept its processes up to date. As it happens, “process debt” is a massive opportunity for enterprises before, during, and after a system implementation. Dealing with it early can pay very material dividends in terms of customer experience, revenue, and cost.
 

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The Relationship Between Tech Debt and Process Debt

Tech debt is often associated with process debt because old systems typically have related processes which are cumbersome at best. However, process debt also stands on its own as an opportunity. Many organisations have processes which have become less efficient and more fragile, as layer upon layer of band-aids have been placed on these processes over time, just to keep them working.

As processes are not reviewed, or even documented, they become cumbersome and prone to error. As they are handed down through word-of-mouth, or via weak documentation, critical controls might be missed, and old steps might be retained, when in fact they are no longer necessary. Process debt means that organisations are in a situation where they may not even be using their old technology as efficiently as they could.

The Problems of Process Debt

Let’s break down the problems in a little more depth. Firstly, dealing with the simplest problem, which is a lack of documentation. If a process is not properly documented, then various issues arise: the grapevine effect means that there are uncontrolled or unexamined changes as the process is handed down from one staff member to the next. This leads to risks, as critical controls can be missed. It can also lead to inefficiencies, either due to introduced errors or simply retaining (or even adding) steps that are not needed.

Furthermore, regulators are becoming very much aware of the risks of undocumented or unmanaged processes. For instance, in the superannuation space, CPS230 is a standard which will demand that processes are accurately documented and effectively managed.

The Opportunity in Process Improvement

Yet the opportunity is so much bigger than just documenting processes. As operating context changes, processes should change with them. Left for long enough, an unexamined process will almost guarantee a large amount of inherent waste. The waste might lead to staff burning considerable amounts of time, and from our experience it would not be unusual to have more than 30% of their time spent on activities that are no longer necessary or that can be removed with a little bit of improvement work.

The Impact of Waste on Revenue, Cost, and Risk

The critical thing about waste is that it can frustrate customers, frustrate staff, introduce risks, and cost you money. So, in effect, you are paying money to annoy customers, irritate staff, and introduce risk. Therefore, this is often a revenue, cost, and risk problem. With regards to revenue, if it takes you longer to get to a potential customer, process their request, or say “yes” to a deal, you have probably just lost revenue. With regards to cost, unnecessary process steps and errors both hit your cost lines in a very direct way. The introduction of risk is an incredibly interesting point, in that poor processes tend to be more risky or fragile. It is likely a problem will happen because the process not been thought through, and all this just because good process disciplines have not been applied.

Aligning Process Improvement with System Implementation

Now, let’s go back to the relationship between “tech debt” and “process debt” for a moment or two. A massive issue is that some organisations do not design either their process or data landscape before specifying a system. This means that today’s poor processes can get captured in a specification or “use case”. This is akin to paying money to build bad practices into your new system infrastructure. Furthermore, as those bad practices usually involve more steps, the system build itself is likely to be more expensive and higher risk. If processes are not reviewed, we are automating things that should not be there in the first place, or failing to include controls that very much should be there. The result is likely to be a more expensive and riskier system build, because the larger the scope due to more process steps being dealt with, the more likely that the system will have problems and fragility when it deploys.

Even without a system transformation, it’s quite possible that the processes are not using the old system well enough. One of the common situations we find is that an older system has helpful functionality that no one is using. Hence, we often recommend two steps to deal with both process and tech debt. The first step is to think about the processes as best you can with the systems that you already have. This will likely yield some quick tactical improvements with material benefits. Then, consider how to truly transform those processes with regards to new systems. Otherwise, your requirements will reflect old thinking.

Benefits of a Two-Step Approach to Process Improvement

The wonderful thing about this two-step approach is that you can save money in cleaning up your processes even before you start to design technology updates, and the new systems can be partially funded through the savings that you get from process work. Very importantly, because you’ve looked at the processes, both how they work with existing systems and how they could work with new technology, you’re much more likely to develop a cleaner, leaner, more efficient, and less risky future state. This will certainly contribute to the removal of tech debt. So it’s worthwhile pausing for thought and considering process debt, because you will find that this is an opportunity that you just might have missed.

Leveraging Technology for Process Improvement

Finally, it is worth noting that there are more technologies available than ever before to help you improve your processes. These include process mapping tools, tools to capture data and analyse it to find opportunities, tools to look for best practice, change management tools, and even tools to restructure your organisational design around new processes. Process analysts can now do their work faster and with a higher degree of measured impact.

Seizing the Process Improvement Opportunity

So, in summary, process debt might be a major opportunity that has not been in focus for you or your team. Yet, it offers huge potential for improvement, with or without an exercise to eliminate tech debt. Organisations should certainly consider redesigning their processes as part of a technology refresh, but even without a new systems implementation, process work can improve customer and staff experience, lift revenue, and reduce cost.