Resilience, the new "must have" for companies?
In an article for L’Opinion, Vinciane Beauchene (Boston Consulting Group) tells us that « companies are facing a triple crisis, economic, health and social, and must meet a double challenge: maintain productivity and reinvent their organization to become more resilient.”
To better understand what resilience is, it is important to go back to its origins. This notion, initially linked to matter and its capacity to evolve after having been subject to a shock, had evolved towards psychology by showing the capacity of an individual to find a state of balance in a context of adversity and discomfort.
How to adapt this concept to the company?
Let’s illustrate what resilience can be with the banking domain. The Bale Committee, a global forum for banking supervisors, recently released its guidelines for the financial sector. These guidelines pointed out that banks today are not sufficiently prepared for the technological dangers to which they may be subjected: cyber-attacks, frauds… For this committee, it is imperative that banks become more resilient by improving their ability to adapt in a changing industry and in times of crisis.
This must be reflected in their ability to anticipate technological attacks, identify their nature, react quickly and learn from them.
The example of the supply chain domain is also illustrative. During the health crisis that we have experienced, the consumption pattern has been deeply changed: consumers were no longer consuming finished products but more raw products in their diet. This new way of consumption went hand in hand with a more equitable consumption and with the will of the consumers to limit their consumption to local consumption.
Production and supply tools had to be rethought during this crisis to respond as quickly as possible to new consumer needs.
For the barometer of the industrial transformation carried out by KPMG and the factory of the industry, it is a good opportunity for supply chains to move from a cost-oriented logic to a resilience and differentiation logic at the service of the customer:
The operational resilience of a company is therefore a way to measure its ability to identify, prevent, react, find solutions and learn from an exogenous crisis, of operational incidents impacting their business. According to a Deloitte report, 70% of business leaders do not believe that their organization can adapt these changes.
Becoming a resilient organization can be complex. This complexity is explained by the fact that no cyber attack, no crisis, be it financial, economic or societal, is truly predictable. This is what Nassim Taleb calls black swans in his book “The Black Swan: The Power of the Unpredictable”. They can be explained by:
The disproportionate impact of rare and extremely difficult to predict major events that are outside the normal expectations of history, science, finance or technology.
The impossibility of calculating the probability of these events by scientific methods because of the low probabilities of their occurrence
Cognitive biases that blind people, individually and collectively, to uncertainty
This explains why so few CEO feel they are achieving resilience.
To be considered resilient, an organization must be able to identify in real time the stress points of a crisis in its organization, to evaluate the impacts on the globality of its business processes in order to be able to anticipate the response and make the right decisions.
Process Mining brings resilience to companies in times of crisis
- Process Mining allows first of all to visualize in real time the way processes are operated on the field. At each moment, Process Mining gives a global view but also allows to focus on a particular entity, a moment of the process to better understand what is happening in reality. Alerts can be sent in real time when events differ from what normally happens, which allows to gain agility and speed in identifying potential deviations.
Let’s take the example of raw material purchasing: process mining allows to capture all the expenses of a company and to consolidate them in a global expense pattern. If the company should experience a significant increase in a particular raw material, Process Mining can capture this discrepancy and report the information in real time. It is a way to identify an expense gap on a part of the company and to know immediately the origin.
- Process Mining allows us to identify the points of tension, anomalies or non-conformities in the processes throughout the chain. It also and above all allows us to highlight the root causes of difficulties: a missing process point, a late supplier, a particular geographical area in need, etc. This analysis allows us to be more precise in identifying solutions to resolve these difficulties. We can illustrate this with the temporary supply difficulties that companies may experience. Process Mining allows to immediately visualize the anomaly in the process, in this case a delay in supply and to know the cause: problem at the source, of the carrier etc. to find the right solutions.
- Finally, Process Mining is a tool that allows to anticipate future evolutions. Indeed, predictive is a technilogy that allows to visualize the changes caused by an evolution of all or part of the process. It therefore helps operational staff to ensure that the decisions made are the right ones.
Let’s take the example of a subscription that has been compromised by cyber-attacks. The company may decide to modify the subscription path to enhance security. Process Mining will allow to evaluate the impact of this change on the whole process and to see what could be the different bottlenecks or anomalies to better anticipate and correct them.
Process Mining is thus a technology that allows to have a clear vision of how a crisis will impact all the organizations and their processes, to elaborate scenarios of reactive actions and to see how this will contribute to the global performance of the company. The organization becomes more agile, better prepared when external events impact productivity.