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What are shadow processes and why do they matter in business?

Every thriving business has thousands of millions of documented processes and workflows. However, even the best organizations face a challenge of shadow processes. In this article we go through what they are and how they can be avoided.

What are shadow processes?

Shadow processes are business tasks and workflows that are typically not formally tracked or monitored by the organization. This can include manual processes, undocumented activities, or informal practices that are not officially recognized or documented. Shadow processes can occur within an organization's operations or extend to customer or supplier interactions. They can add complexity to existing systems, create inefficiencies, and lead to security and compliance risks.

Companies have long been trying to see what digital work looks like inside the organization. Many different methods have been used for that purpose: special consultants mapping processes, process mining software, task mining, and other workflow building tools. However, a fraction of the processes would still remain undiscovered. 

How are shadow processes created? 

There’s always a happy path to how the process should work. It’s usually documented and outlined, like onboarding the new colleague by an HR or monthly close process by Accounting. However, sometimes “happy” path doesn’t work the way it should in real life. Some deviations and workarounds modify the process from what it’s supposed to be. 

Shadow processes are hidden processes that need to be done but are not documented. They overtake the main process and add non-documented random stuff and ad-hoc work. For example, the Accounts Payable unit is involved in invoice processing. However, it ends up doing many small tasks that are not specified anywhere so that work would flow further. As a result, it ends up being much more complex than initially supposed to be. 

These hidden processes might be very versatile. They’re those minor fixes in the middle of the main process or tiny variations from the task that we unwillingly end up with. Shadow processes are often the small procedures people create over time without even realizing it. Unfortunately, it might easily add up into a big chunk of time when combining all the variations from the whole team. 

Where do variations in the process come from?

  • Not sufficient data. If the process is not well mapped and has a lot of room for interpretation, people might undertake their own path, which might not always be the most effective.
  • Changes in requirements. If the process has changed from early times (for example, because of acquiring a new customer) but the documented process is still the same, then employees will have to find new ways of doing things on the go. 
  • Double work from people. Sometimes people might be doing doable work by rechecking certain parts of the process to ensure its smoothness (might happen because of not trusting the software robots and redoing that part manually). 

Why are shadow processes dangerous?

As one might guess, these shadow processes steal a lot of time. They might seem critical to work, but that’s just because people are used to doing them for a long time. When rebuilding and going through the processes again, they prove to be redundant in many cases. 

Shadow processes halt other projects, for example, digital transformation. They usually get undiscovered because they can’t easily be detected and are not within IT systems. They accumulate and grow fast, making them even riskier for the overall work. 

It’s easy to overlook these shadow tasks because they are not the core parts of the work and might not account for their large portion. However, it’s these small hidden processes that steal the time, prevent the flow, and go neglected.

Types of processes in the organization

How can shadow processes be removed from business operations?

Shadow processes may occur when well-intended people attempt to remove dull and ineffective work. Here are a few ways shadow processes can be removed from your organization.

1. Identify and document expected processes. Take time to document each process and its associated steps, including the manual steps and informal practices that may be creating inefficiencies.

2. Automate processes whenever possible.  Look for opportunities to replace manual processes with automated solutions, such as using software to streamline customer interactions or automate supplier management.

3. Establish more formal processes. Make sure that all processes are formally documented, communicated to stakeholders, and tracked and monitored.

4. Monitor and review processes regularly. Regularly review processes to ensure that they are up to date and that any changes are documented.

5. Invest in training and education. Make sure that all employees are aware of the processes and are trained on how to use them. This can help reduce the need for manual workarounds.

How to discover shadow processes?

1. Interview key stakeholders. Speak with stakeholders in the organization to get an understanding of the processes they use and the manual steps they have in place.

2. Analyze process data. Look for patterns in data that may indicate a process is taking place that isn't formally tracked or monitored.

3. Monitor processes. Take time to observe processes in action to identify any manual steps or informal practices.

4. Ask the right questions. Ask questions that can help uncover any hidden processes, such as "how did you do that?" or "where did you get that information from?".

5. Conduct a process discovery audit. A process audit can help uncover any shadow processes, identify areas of improvement, and provide insights into how to streamline operations.

Last updated April 4, 2023

Written by

Kazyna Turdibayeva

Marketing manager at Workfellow

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