Are You Automating Too Soon? Here’s Why Standardization Must Come First

Introduction

Following our recent webinar on Setting Up a Modern Shared Service Center, we received several questions about the importance of process standardization—what we referred to as the plumbing—before introducing automation—the electrical system. To further elaborate on this, we’re diving deeper into why standardization should come first and how to implement it effectively.

For those who weren’t able to attend the webinar, here’s a quick refresher. Standardizing processes ensures smooth operations by eliminating inefficiencies and inconsistencies, while automation enhances efficiency by streamlining and accelerating those standardized processes. Think of standardization as the plumbing of your house, ensuring everything flows smoothly, and automation as the electrical system, powering your operations efficiently. 

Why Process Standardization is Crucial

Before diving into automation, organizations need to ensure their processes are structured, optimized, and consistent. Process standardization:

• Eliminates inefficiencies by reducing variations across regions and departments.
• Improves scalability, allowing businesses to expand without operational disruptions.
• Ensures quality and predictability, providing a seamless experience for employees and customers alike.
• Creates a solid foundation for automation, maximizing its benefits and ensuring efficiency.

Key Steps to Standardization and Optimization

To build a strong process foundation, follow these structured steps:

1. Assign a Global Process Owner (GPO)

A GPO or similar leader should have decision-making authority across the entire process to drive standardization efforts. Without a dedicated owner, fragmented processes can lead to inefficiencies and misalignment.

2. Map Out the Current State

Utilize value stream mapping to:

• Identify inefficiencies, bottlenecks, and redundancies.
• Understand end-to-end workflows across different teams and regions.
• Pinpoint opportunities for process consolidation and elimination.

3. Design the Future State

Once the inefficiencies are clear, create a future-state process design that prioritizes:

• Operational excellence with minimal friction.
• A seamless flow of work across teams and systems.
• Clear governance structures to maintain standardization.

4. Eliminate, Consolidate, and Optimize

At this stage:

• Eliminate unnecessary steps to streamline operations.
• Consolidate similar processes to reduce complexity.
• Optimize workflows to improve efficiency before automation is introduced.

5. Balance Global Consistency with Local Adaptation

While standardization improves efficiency, some regional variations may be necessary for regulatory compliance or cultural differences. It’s important to allow flexibility where needed while ensuring global alignment.

Cross-functional alignment is also crucial. Ensure buy-in from all departments to streamline implementation and avoid silos. This collaborative approach helps in achieving a smooth transition to standardized processes.

6. Establish Metrics & Feedback Loops

To sustain continuous improvement:

• Define KPIs for process performance.
• Set up regular reviews to track effectiveness.
• Encourage cross-functional feedback to refine processes over time.

Why Standardization Must Come Before Automation

Attempting to automate before standardizing processes can lead to:

🚨 Automating inefficiencies, embedding bad processes into the system.
🚨 Increased errors due to inconsistencies across departments.
🚨 Costly rework, requiring process redesign after automation has been implemented.

By standardizing first, companies can ensure that automation enhances rather than complicates operations. Standardized processes lead to:

✅ Greater accuracy, reducing manual errors.
✅ Higher efficiency, eliminating redundant steps.
✅ Scalability, allowing automation to support growth without additional complexity.

Final Thoughts: Laying the Right Foundation

Think of standardization and automation as building a house. You wouldn’t install electrical systems before laying out the plumbing correctly. Similarly, a modern Shared Service Center (SSC) should have its workflows standardized before automation takes over.

By following these best practices, organizations can ensure their shared service centers run smoothly, efficiently, and at scale—delivering the cost efficiencies and operational benefits they set out to achieve.

For more insights and to explore how our solutions can benefit your organization, speak with an expert today!