Business Process Improvement

A strategy for productivity and competitiveness

Objectives


Create a closer link between operational efficiency and profitability

Connect your role to business profitability Introduce tools and techniques

Create a culture/model to sustain operational improvements  Make you laugh


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Five stepsto link operations and profit

    

Understand how the business makes money, strategic intent and the value proposition Alignment with a core/enable business process (end-to-end understanding) Baseline (metrics and unit costs)at a minimum go to the Balanced Scorecard Improvevoice of the customer Measure and control
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How the Business Makes Money

Revenue Expenses = Profit

Strategic Intent & Value Proposition

Business Strategy Product, placement, promotion, price Value Proposition Performance Metrics and Goals Initiatives Value Identification  Business Analysts connect to a Value Proposition through Value Delivery = Processes


Alignment with core business processes

  

Core business processes (business acquisition, renewals, servicing) Enabling processes (HR, IT, Finance) What does it give you
Holistic view End to End Inputs and Outputs Suppliers and Customers
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Process Improvement Objectives



Making processes effective. Have the right quality output, at the right time, at the right price. Making processes efficient. Minimizing the resources needed and eliminating waste (non-value activities) to focus on value. Making processes adaptable. Being able to adapt to changing customer and business needs.
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Good Business Processes..

Enable you to make better business decisions and implement them faster  Help to improve and control your operations  Improve your production flow


Common Characteristics of Well-defined and Wellmanaged Processes

     

Accountability for how well the process performs (process owner) Defined boundaries and interfaces Known cycle times (consistent, repeatable and predictable) Measurement and feedback controls Customer-related measurements and targets Formal change procedures

Quality Business Processes

      

Eliminate errors Minimize delays Maximize use of assetsmatch capacity to demand Promote understanding Are easy to use Are customer focused and adaptive to changing needs Provide the organization with competitive advantage
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Its all about the business

     

Businesses need to make money (grow profitably) Best way to contribute is by addressing business process BAs critical to analyzing the processgo beyond the human to system interactions Effect business change Change management Best way to prove your value is by delivering high quality metrics
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Creating a baseline
    

Functional reviews Objective to educate on all of the basics Focus on current state with a few ahas Align capacity with demand Teaches
Holistic view Management by fact

Are not public performance reviews

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Creating a Functional Review Process

Standardized template unique story  Creates a baseline (efficiency and effectiveness) and metrics  Each functional area presents to Sr. Management  Feedback memo with approvals and direction  Inputs to Operational Plans and Goals

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Content
            

Value Stream Alignment Organizational Design Performance Management Efficiency Snapshot High Level Process (SIPOC) (by output) Trend of demand and capacity (by output) Drivers, lead indicators and levers Performance metrics productivity, quality, timing (by output), external benchmarks Customer requirements and metrics (by output) Unit costs and trend Budget and expense management Challenges, risks and opportunities Commitments to go forward2008 Goal creation 14

Context of Organizational Fit

Develop Product Acquire Client Install Client Administer and Service Process* Claims Retain Client

Enabling Processes

Description of Services

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SIPOC
Suppliers Inputs Process
See Below

Outputs

Customers

Requirements

Step 1:

Step 2:

Step 3:

Step 4:

Step 5:

http://www.isixsigma.com/library/content/c010429a.asp

Capacity
  

Drivers: Network Pricing Arrangements and Customization Lead Indicators: None Taken staff out and team has continued to meet/exceed goals May be potential for additional efficiency gains June 2007 - a capacity review of this team will begin metrics, skill set, tracking of time & volumes to right size team

Volume and Staffing

12 10 8 S ta ffin g 6 4 2 0 Staff Volume 3000 2500 2000 1500 1000 500 0 V o lu m e

Q1 '05 10 2848

Q2 '05 10 2529

Q3 '05 Q4 '05 10 2057 10 2729

Q1 '06 7 2248

Q2 '06 7 2102

Q3 '06 Q4 '06 7 1767 7 2467

Q1 '07 6 2064

Metrics Provider Loads

Provider Loads - Service Timing
100.00% 98.00% P rc n e et 96.00% 94.00% 92.00% 90.00% Actual Goal

1 Q '0 5

1 Q '0 6

3 Q '0 6

Time

Service timing goal is 96% loaded within 14 days Quality goal is 98.5% for 2007 Timing and quality goals are a focus area for 2007
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1 Q '0 7

3 Q '0 5

Global Opportunities


   

Performance Metrics daily measures, inventory management (work in progress), team and individual productivity, quality and controls, unit costs Performance Goals (too low) Service levels same day, good order and bad order (reduce work in progress) Mature staffing models Process improvements eliminate hand offs and variation and improve the flow through the value stream
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Introducing Bursts
      

2 day events Scope and goal set Prep with leaders and team members Value stream mapping identify missing data points Data collection Improvement session Report out and action plan
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Identify Opportunities
         

Cost/unit cost (esp. if trending up) Duplicate steps Rework Complaints Missed deadlines Inconsistent results Many hand offs Long training curves Variation No work standard
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Best PracticesLean
        

Once and done No redundant work; minimum touch Right the first time Match capacity to demand Rational handoffs vs. specialization Workforce Engagement Scalable to variance in demand Visibility Team measures, goals and accountabilities
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The Importance of Culture and People Emphasis on the people great people can execute a bad process  How we do work is personal  Workforce engagement  Strong change management


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Sustainable Operational Excellence Culture

Its all about the people  The soft stuff is the hard stuff  Top down and bottom up  Quick wins


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Sustainable Operational ExcellenceCulture Shift

Counter-intuitive to conventional wisdom  Learning to see


New thinking New skills New tools, sources of knowledge

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Parting comments


Operational Efficiency
Metrics (measures and controls) Goals

Process Design
Use voice of the customer Dont automate an inefficient or ineffective process Dont fix at point of error when the right answer is to prevent upstream Observe the processinterview to identify variation Look end-to-end during analysis Use data (time track if no data available) Get user input and feedback Eliminate waste to add value Production flow no batch and queue (wait times)
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Closing


Questions and answers

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Resources
www.bptrends.com  Lean Enterprise Value, Murman et. Al  Business Process Change, Paul Harmon  Business Process Management, Profiting from Process, Roger T. Burlton  http://lean.mit.edu

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Source: Modified from BT Trends, Paul Harmon

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Source: Modified from BT Trends, Paul Harmon

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