How “Shadow Processes” Are Hindering Digital Transformation

While core system transformation efforts – digital transformation – traditionally receive the bulk of IT’s attention and resources, often resulting in multi-year initiatives that require all hands on deck, there are more insidious processes that often go on unnoticed for months, if not years.

These “shadow processes” are business processes that may not be core to your business but can still impact employee and customer experiences – and cost companies millions of dollars every year in time and resources. Left unattended, they can wreak havoc on your business functions if not caught and corrected sooner rather than later. But, as the name suggests, it can be difficult to identify these processes, let alone understand how to nip them in the bud before it’s too late.

From an IT perspective, it can be doubly challenging to identify these processes because so many of them are done offline – which is why they can destroy companies’ digital transformation if not addressed early. Here are some best practices to enact today when it comes to both identifying shadow processes and transforming them into enhanced operations.

Identifying “Shadow Processes”

One of my favorite illustrative examples is that of a bank. At a bank – and at any company, really – it’s fairly easy to identify the core processes.

Banks’ core processes include someone signing up for a checking account, applying for a mortgage, or accessing a mobile app. Within each of these core processes, there are countless supporting business processes, such as changing your interest rates, adding someone else to your mortgage or changing policies or account beneficiaries. While these actions may not get your bank new clients, they are part of the lifecycle of a customer’s experience.

It’s within all of these supporting business processes that shadow processes can begin to thrive, whether that’s manual data entry or form creation, or making a special allowance to assist a customer with a complicated issue. While it would be impossible to list out every single possible shadow process your company could have inadvertently created, it is far more possible to seek out and identify them for yourself.

Most organizations are centered around teams that perform certain functions or tasks; to return to our bank example, there are teams that focus on mortgages, checking accounts, policies, and so on and so forth.

Evaluate each of your teams’ processes, look at the core things they do, and then look for all the artifacts, widgets, paper forms, and other auxiliary tools that go around the major task the teams perform. That will give you a good idea of what kind of processes can be secured and tightened up to ensure that these shadow processes don’t have room to develop.

The Cost of Unidentified Shadow Processes

Most companies and IT departments already know these shadow processes exist. The struggle comes in with budget constraints and concerns; many companies won’t even consider bringing an issue to their IT department or accounting division to solve unless it’s proven to save the company a certain (large) amount of money every year.

These shadow processes do cost a significant amount of money and time, but they can be hard to quantify – hence the word “shadow” in the definition – and that typically ensures that IT departments and management will deprioritize addressing those operational concerns in favor of larger issues that directly impact the business’s core process, even if the shadow process could be dispelled by a relatively simple integration or support.

But the ironic thing is that money is still being spent because the teams impacted by the existence of these shadow processes will likely turn around and either build or buy a specialized solutions – like Pega or Appian software – just to meet their needs. And if you have a handful of shadow processes across each team, and each team finds their own solution, you could end up with hundreds of pieces of new technologies, each of which will eventually require IT support..

So do IT departments really gain anything when it comes to brushing off addressing the shadow processes likely running rampant across their organization? Not really. In the long run, you’re still losing money. Better to find a unified, cost-effective solution now, than watch those processes – and the specialized software designed to address them – balloon out of control later.

Prioritizing the Solution

It’s nearly always tedious and time-consuming to build strategies and solutions for addressing shadow processes, especially since many of them are manual and don’t live in the cloud or within existing data. But IT departments are going to inherit the problems shadow processes cause anyway – so now is the time to address them once and for all, and create a plan for how your organization can tackle them in the future.

By building a unified set of systems to address these shadow processes, you’re not only empowering developers to tackle them before they become a huge problem, but your equipping your organization to get more done because teams will be able to solve their problems without spending exorbitant amounts of money on specialized software that will fall on IT to support.

The end results? Each team can remain focused on their key goals without the added burden these ad hoc solutions ultimately present. And, the promise of true digital transformation, improved data-intensive workflows and automation can be achieved at scale.

About the Author: 

Art Harrison, Co-Founder, Daylight

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