What Challenges Do You Face in Business Process Improvement?

Anytime you introduce change in an organization, challenges can arise. Business Process Improvement (BPI) is no different. Whenever a process changes, you can expect push back from someone! So, what are the different challenges you might face and how can you overcome them?

1. Prioritizing the work: When multiple opportunities exist, you may find it hard to identify the biggest opportunity. On NBC's The Biggest Loser, you can easily see who has the biggest problem! You can accomplish the same thing with business processes by building a Process Prioritization Matrix.

Merge your list, or inventory, of processes and prioritization criteria into a single spreadsheet, using the rows to list the business processes and using the columns to list the criteria. If you do not have criteria established to help you prioritize, identify some by thinking about the impact, current state, and value of the existing processes as a starting point. Begin your improvement efforts with the highest scoring process.

2. Avoiding scope creep: Once you begin working on a single business process, you can easily veer away from the original focus of the work. Have you ever started a project at home and then you find that one thing leads to another? This happens all the time in BPI work because new ideas, demands, and needs surface as you get into the work, and the temptation is to continually expand the scope of a BPI effort.

Before you begin working on improving a business process, establish a foundation for your work. Similar to building a house, where the foundation carries the weight of the entire structure, the process "blueprint" will help you to avoid scope creep. While you can do this in various ways, I find it helpful to create a one-page document that includes, at a minimum:

• a description of the process that anyone can understand
• the process boundaries (where the process begins and ends)
• the customer and their needs
• a list of the measurements of success

3. Getting people engaged: In the perfect world, you have sponsorship for BPI, but this does not always exist. Colleagues may not see "what's in it for me," or you may not have a culture of improvement in your organization.

Employees have to "own" process improvement to achieve sustained success because that is where the POWER of business process improvement lies! Until everyone in an organization sees BPI as part of their normal day-to-day responsibilities, process improvement will always come and go.

While managers clearly have a role (they are employees too), their responsibility lies in creating the right environment for process improvement. The problem with this idea though is that many managers got to where they are today because of their ability to deliver results as individual contributors.

All managers should list BPI on their annual performance plan and have part of their year-end review focused on their achievements in this area. They cannot view BPI as an "event" that they can check off though - it is a process, like anything else!

4. Handling difficult people: During any BPI effort you will encounter someone you probably wish would "go away." You may wonder why they resist the change or display a negative behavior.

You should discover the source of your colleague's concern. Forget about BPI for a minute, and try to identify what the person values and then match the benefits of BPI to those values. For example, if a colleague values job security, then you have to show him or her how BPI will enable them to keep their job - perhaps by doing more value added work. Once you match outcomes to values, you can overcome almost any challenge.

5. Changing priorities: As new management enters an organization, priorities can shift. So how can you stay focused on BPI?

The key is to stay focused on the customer. If a new manager comes in that only seems to care about the bottom line, take time to explicitly link "BPI," "customers," and the "bottom line" together. Only customers contribute to a company's profits and keep this concept at the core of everything you do.

6. Criticizing your Improvement Technique: Sometimes colleagues would rather use another improvement method than the one you chose. You may face the dilemma of which one has a better reputation at your computer. Is it Lean, Six Sigma, Reengineering, Lean Six Sigma, or something else?

In reality, most improvement techniques come down to "quality." All the techniques have the same goal -- to achieve improvements in delivering a product or service to the customer, and all have a connection to the Total Quality Management (TQM) movement. While the various techniques have some differences, you will see more similarities than differences. You should feel free to take the best from several techniques, combine them, and select a name that works for your organization.

SOURCE: EzineArticles.com

Process 'n' People – Synergies for Improved Business Performance

Introduction

It amazes me how many medium to large-sized organisations are still communicating fragments of policies and processes to employees through one-time emails. In one nation-wide organisation, employees were informed of a new purchase authorisation policy via email. In another multi-national, a manager conveyed new data entry procedures the same way. I am not talking here about notification of changed policies and procedures. Email may be a good medium for mass communication of such changes. I am talking here about relaying important policies and procedures to employees and ensuring that they understand and act on them.

Imagine these employees two weeks down the track. "Now how does that new procedure go? Oh yes! I think it was in an email I got last month. Now where did I file that email? Or did I delete it?" In most cases, the procedure is long forgotten or a fruitless or time-wasting search is begun to locate what should by then be common knowledge and practice.

Process clarity is one of the three key foci in effective organisational design, along with people and technology. Yet how many organisations are struggling with poorly defined and communicated processes. How an invoice is processed, customer complaint handled or engineering drawing approved in many organisations depends more on who does it and what day of the week it was done on rather than on sound business reasoning. Where process and role clarity is lacking, personal idiosyncrasies and political manoeuvring take over.

In this environment, there is little point in paying above market salaries to attract the best talent. High-performers will simply leave the organisation when they tire of beating their head against a brick wall. The solution is to conscript these new supercharged recruits into working with your people to clarify, define and agree the way things should be done. Achieving this synergy between people and processes is a key lever in improving organisational capability.

Research indicates that less than 20 percent of product defects and service problems are due to non-random factors such as malicious employees, machine breakdown and poor raw materials. The other 80 percent or more of problems are due to systemic deficiencies with processes. Defining and mapping your business processes is simple to do, involves no costly capital expenditure and pays huge dividends in business efficiency and employee motivation. If you are thinking about mapping your processes, here are ten key pointers to keep in mind.

Involve employees who actually do the work in the mapping

Employees who do the work are in the best position to know the detailed steps in each process, the common roadblocks and bottlenecks and the key contacts in the organisation to get things done. Our workers are our greatest resource, however, many organisations do not tap in to the enormous wealth of experience that walks through their doors each morning and walk out again each night. Involve your employees up front by inviting them to join process-mapping teams. Keep managers and supervisors out of the process-mapping sessions, as they have a tendency to dominate the sessions with their own "expertise".

Getting employees to map their processes is a powerful morale booster. Apart from mutual goal-setting, there is no more powerful method that I know of for engaging the hearts and minds of employees. I have seen employees' eyes light up during briefing sessions in which I offered them the opportunity to identify and remove the roadblocks to them doing a great job. Most employees are tired of the day-to-day fire fighting that comes with many jobs. At one briefing session, employees were so enthused that they all volunteered to join the team!

Set up one process-mapping team per work area, with no more than ten employees per team. Look for a team leader with good interpersonal and organising skills and that has the respect of the other team members. The team leader's first task is to get the team members to brainstorm all the activities they perform and then to group them into separate processes. The following sessions will then see one process mapped per session. If you don't have a lot of time to spare, teams can meet weekly. Each process should take no longer than two hours to map.

Identify process start and end activities

For each process, clearly identify the start and end. If the team neglects this important step at the start of each mapping session, in the team's enthusiasm, extra activities will quickly creep into the picture until the process becomes unmanageable. Think of one activity that triggers the process, such as an invoice appearing in an intray. This is the start. Then think of the last activity performed. It may be, for example, posting an item to the General Ledger.

Identify process objective and inputs and outputs

This is where work starts to take on new meaning for employees. The team leader should ask employees why each process is performed and what are the expected results of each process. Not only does this help to focus attention on removing non-value add activities, but it also gives employees a sense of purpose in their working life. Instead of work being a disconnected set of meaningless activities, employees begin to appreciate that everything they do helps to achieve a bigger goal. So, I no longer just remove boxes from one shelf and put them on another. I am maximising the use of warehouse space and reducing pick times so that we can deliver widgets to our customers faster and cheaper.

Asking the teams to identify the inputs to the process and the expected outputs will serve to clarify what the process needs before it can begin and what customers of the next process will get before they can begin. For example, agreeing that widget assembly cannot begin until the joining screws are supplied will eliminate a lot of idle work in progress.

Identify Customer and Supplier requirements

Next, each team needs to work out who the suppliers and customers of the process are. This step is critical as it identifies who the team needs to work with collaboratively to maximise business results. If a process does not have a customer, then eliminate it as it serves no one's purpose. Every employee working in a process should serve either an internal customer or an external customer or both. The team will then ask their customers what it is they want from the process, in terms of quality, turn around time and so on.

Conversely, the team needs to clarify what it is they need of their suppliers, both internal and external, to perform their process effectively and efficiently. A purchasing team may require other departments (suppliers) to fill in all fields of the Purchase Order prior to submission. The customers of the purchasing team (other departments) may require orders to be fulfilled within two days unless placed on backorder. As in this case, suppliers of the process can also be customers.

Seeing how their own local processes fit into the wider organisational processes and goals allow employees to see the "big picture". For many, this is incredibly empowering and motivating. Through engaging customers and suppliers and taking responsibility for the complete process, employees, supervisors and managers will all start singing from the same hymn sheet.

Identify a Process Owner for each process

For each process, specify one Process Owner. Identifying one person who is responsible for the process end to end is critical to ensuring process efficiency. There is no more effective way that I know to dismantle quickly and effectively the silo walls that get built separating departments. Where processes flow through departments, as all major processes do, the Process Owner will need to have sufficient authority and credibility to make decisions spanning these departments.

Manage the level of detail

The magic of process maps lay in their seemingly simple visual presentation of complex ideas. One picture can tell a thousand words. Each process map should take up no more than one page, with its definition taking up just one other. If a map takes up more than one page, identify sub-processes within each process and show each sub-process on a separate page. Use clear referencing to link each sub-process with its associated macro process. I have seen process maps that flow on page after page after page. These do little more than confuse employees. At the operational level, for each activity in which you need to convey detailed information, have your employees or subject matter experts write clear and logical step-by-step work instructions. Once again, use unambiguous referencing to link the work instruction to its associated process.

Do not try to document everything that goes on in your organisation. Decide on the priority processes and concentrate on these. Processes from which you can gain quick wins are those that interface with external customers and suppliers and those that are currently providing you with your biggest headaches.

Use standardised mapping conventions

What you want is for anyone in the organisation to be able to pick up a process map and understand instantly what it is they are seeing. Standardise on mapping conventions and formatting of the maps. Mapping symbols, flow direction, page layout, fonts, titling and so on should be the same from one map to another. Keep the number of flow chart symbols to a minimum. You should need no more than six to keep the maps easy to read.

Get agreement on the process

The most beautifully documented process will mean naught if there is little commitment from the major actors to follow them. Crunch time will come in those tough times of impending deadlines and snappy stakeholders. I find what works well is getting formal sign-off from the process-mapping team leader, the Process Owner and the managers of the interfacing processes (both supplier and customer). If the interfacing processes are being mapped as well, then also get sign-off from their process-mapping team leaders. This may seem overkill and you may get some resistance, however, getting formal agreement now will save you much heartache later when people start to come up with excuses as to why the seemingly agreed process does not apply in this or that case.

Document the process

The most important thing that team leaders can do after the team agrees on the process definition and steps is to write it down. I remember working with one nation-wide distribution business where at the end of a mapping session with a group of managers, two of the managers came to me and said that this was the best thing since sliced bread. You see, they had held meetings before to thrash out and decide process flows and responsibilities, but nobody wrote down what they agreed. Two weeks after the meetings, these managers lamented, nobody could remember what they had agreed.

Do not fall into the trap of writing down the process as the team brainstorms. During the next two hours there will be many changes to the flow. Writing it down will only lead to a mess as process steps are added, others removed and other moved forward or backward. What works extremely well is brainstorming all the process activities first, writing each process step on a Post-it note and then having a team member place the Post-it notes in order on flipchart paper. The next hour or so is then devoted to arguing about the activities and order of steps. Post-it notes can easily be moved around during this debating process. Only when there is full agreement are the lines and arrows drawn in to signify the process flows. I have seen managers trying to shortcut the process waste a good two hours writing their processes on a white-board and then having to start again when they could no longer understand their "spaghetti drawing".

The documents must now be made easily accessible to all who need them. Have the documents centrally managed and well indexed. If employees have access to computers, make the documents available on-line. You want everyone working on the latest version of each document, so practice strict version control. If you're a small to medium-sized organisation, you don't need expensive dedicated document management software. An electronic spreadsheet or simple database will suffice. As with many things in organisations, its not the technology that is limiting business effectiveness; its the commitment to following practices rigorously. By the way, don't forget to document your document control process.

Convey management commitment and train your teams

Although mapping business processes will not cost you much in capital expenditure, it is not for the faint-hearted. The management team will need to show unswerving and visible commitment to the project. Teams will loose faith and energy quickly if management support is piecemeal or grudgingly given. Team leaders will need time management and organising skills, along with interpersonal skills and analytical thinking. Each team will also need a mix of skills; people who can think creatively, bond the team and follow through on tasks, to name just a few. Where these skills are lacking, they will need to be learned. However, these teams have proved to be a fertile ground for developing the next line of leaders.

Use as a basis for further improvement

Business Process Reengineering was a big buzzword in the 80s and 90s. A key objective of reengineering efforts was often technological implementations with a consequent radical downsizing. The severe dampening of employee morale as a result is well known. What is not so well recognised is the employee enthusiasm and business improvements that may be gained by many organisations in engineering their processes for the first time.

There is a lot to be gained just in mapping initially your core processes. Every team that I have worked with have uncovered many areas for improvement. One team reduced dramatically the incidence of lost inventory items whilst another improved substantially the pass rate of electronic circuit modules.

Once the mapping is completed, they then serve as excellent induction and training resources. However, the fun does not stop there. The process maps and work instructions can now serve as the agreed baseline for ongoing process improvement. Through continuing process improvement teams, your employees will remain emotionally engaged with the organisation and motivated to continue working towards a common organisational goal.

SOURCE: www.businessperform.com

Optimise Growth Rates With Business Process Improvement

Business process improvement incorporates a systematic approach for enabling an organisation to optimise its systems and procedures and to maximise the effectiveness and efficiency of its operations. The method was primarily documented by H James Harrington in his book Business Process Improvement. BPI, as it is otherwise known, helps reduce cost and cycle time while improving quality.

In the current business climate it is more important than ever to ensure your efforts are focussed on €doing the right things well€. With the help of a management consultant working with your teams to optimise their systems and processes, your company can excel in its field. By conducting a systematic examination of your business processes, you can enable your business to identify its inefficiencies and drawbacks and more importantly, to identify the actions necessary to adjust your processes so as to make your operations more productive. Your business processes will be better aligned with your goals and your business will be on the right track. This helps avoid unnecessary and/ or inefficient actions, improves quality and saves time, effort and money.

Another important aspect of business process improvement is related to the focus placed on customer requirements. It is critical to meet the evolving needs of customers in order to grow dynamically. By improving your processes you are better able to serve the needs of your customers and to assist them to meet their goals and objectives and to strengthen your customer/ supplier relationships - everyone wins.

The aim of business process improvement is to ensure that your people are only doing the things that add value to your business (they are being effective) and that the things that they are doing are being done well (that the business is efficient). For the uninitiated it can seem confusing but in the end, it is just about ensuring that you have the right people, with the right skills, in the right place, at the right time, only doing that which supports your business's goals and in turn delivers your customers' requirements.

By identifying the process steps that do not meet your expectations, you can use available resources to look into the areas that require development. This helps your company achieve maximum efficiency improvements. Personal coaching and training, for managers and team members in BPI and other supporting management skills, can also help in ensuring that the gains made are locked in and are sustainable, and the resultant improvement cycle is the natural way of operating.

Spending a few hours a week on business process improvement, and getting a head start on it with the right management consultant will have noticeable effects on your business profits as well as your time. Start now and see the rewards.

Changing Culture With Lean

As state Medicaid programs expand to cover more people, it is more important than ever to take a closer look at the work processes and apply Lean principles. Lean is a way of thinking that challenges the status quo, defines value from the customers' perspective, removes waste from processes and encourages people to seek continuous improvement. It typically takes an organization 5 to 10 years to fully transform into a Lean culture.

The Lean approach started in the manufacturing industry but is now used in all industries, including health care and government. It is a natural fit for state Medicaid agencies, which administer health coverage for their state's low-income citizens and those with disabilities. With its focus on continuous improvement and customer needs, Lean offers these agencies a method for cutting through the noise of health policy (and politics) to focus on their public mandate of improving health outcomes while managing costs.

Colorado's Medicaid agency, the Department of Health Care Policy and Financing, adopted Lean in 2012 in response to Governor Hickenlooper's mandate for leaner government. The agency leadership believed in the value of the Lean approach and prioritized three pressing projects to focus on: one concerned the hiring process, one focused on managing a Medicaid member's eligible out-of-pocket expenses and the third was not so much a process improvement but an organizational planning initiative. This third project was not well-suited to Lean, and the other two were complex issues involving multiple state regulations and stakeholders.

It was a difficult way to begin our journey with Lean. These projects quickly became large, unwieldy and time-consuming, with partial implementation of solutions stretching out more than a year. For some projects, full implementation appeared to be a distant dream. Some wondered if Lean could really work in our agency, but a small group of committed people were not ready to give up. We still believed in the power of continuous improvement to make our work better.

When we first adopted Lean, we used a self-evaluation tool, the Organizational Lean Maturity Assessment, which indicated our agency was definitely at a level one, an introductory level, for Lean. It was understandable that the agency was struggling to get their first big projects off the ground. As the Department's Lean Leader, I decided it was time to try a new approach.

Therefore, I decided a grassroots strategy that emphasized training, educating and coaching staff on Lean tools and methods would be the most successful approach. I listened to the voice of the customer (staff) who said they did not have time to analyze and fix the broken processes through Lean projects, because there simply was not enough time to accommodate the extra work required.

Based on this feedback, I launched Lean "Quick Hit" sessions. These sessions are requested directly by staff, are completed in four hours or less, focus on a very specific problem, improve cross-divisional collaboration, create solid documentation and result in actionable solutions.

This grassroots approach has produced significant results. More than 200 staff, or almost half of our agency's employees, have participated in Lean trainings, projects or Quick Hit sessions. In the most recent employee engagement survey, 86% of agency employees were familiar with Lean, and 71% had participated in a Lean project.

In addition, we have documented more than 180 processes, which is helping to reduce slow, inefficient processes by identifying ways to better use existing technology and resources. This aligns with our mission to improve health care and access while demonstrating sound stewardship of financial resources. We are creating "green," sustainable processes that are customer-focused.

It has been two years since the inception of Lean at the Department, and we are now solidly at level three (demonstrating success) in the training and coaching category of the Organizational Lean Maturity Assessment, one year ahead of schedule. We expect to reach level four (a successful, mature deployment) for all categories of the assessment within the next three to five years.

Eventually, employees will no longer need as much help with Lean process improvement, and will do their own "Quick Hits" as they continuously improve. But for now, it is good to have a way to embed the continuous improvement and customer-focus principles into daily work. It has generated energy, excitement and buy-in for continuous improvement.

Incremental changes like this are sometimes interpreted as failures, or at best, concessions. Leaders sometimes worry that only big, dramatic changes take root and grow. But, according to over 30 years of process improvement research, it's continuous improvement that wins the day. That's true even when the change is the Lean initiative itself.

In an environment of too much to do and not enough resources to do it, Lean can be the best thing that happens to a state Medicaid agency. But the agency should expect to apply the Lean principles to the rollout itself. Small changes made over time are better than no changes at all when the state's health and financial wellbeing are at stake.

Article Source: http://EzineArticles.com/8866607

How Do You Know You Are Getting Better? Use Data to Drive Improvement

The best quality improvement initiatives are driven by data! Why? How are you going to know how much you have improved if you don't measure something?

All of you have been exposed to measures in many situations. Most of them were important. In school, you were graded. Perhaps you own shares of stock; how do you measure the success of the stock – its increase in value, a measurement. How do you know if your team wins? By its score; a measurement. The fact is that many daily activities in life have accompanying measures to judge their success.

You might argue that you know if things are getting better; you can just tell. I am sure that you can. This is not enough, though. In the healthcare field it is important to measure improvement. One reason to do so is to prove to others that things are improving. For instance, suppose you are in charge of implementing electronic health records in a hospital setting. You meet resistance from several staff members, including a large number of doctors. How can you overcome this resistance? Collect data – lower percentage of wrong prescriptions, for instance – from a pilot program of willing participants and then demonstrate the positive benefits with your data. With such results in hand, you will overcome many doubters.

Another reason to measure improvement is to demonstrate the saving of time and money. With healthcare costing so much today that many find care out of their price range, it is important to find ways to lower costs. For instance, suppose that staffing at your facility is very expensive; the payroll costs are way over budget. I recently read of a lean six sigma project that demonstrated through the use of data collecting by staff charge nurses that staffing shortages and costs were significantly reduced. The right staff was present when needed and the facility eliminated the need for using short-term staffing of nurses through agencies; this saved a great deal of money. Besides lowering costs, staff morale improved significantly at this site.

I hope that I have convinced you that to make significant quality improvements, you should be actively measuring. What should you be measuring? The most common measurements are costs in providing a service, time taken in providing a service and various measures of patient health, such as the lung capacity of asthmatics. You can also measure improved bottom lines. One doctor I know improved his income 38% in five years by working hard to adopt quality measures in his solo practice. Many ER's now boast of how they have significantly decreased waiting time for patients. One such local hospital did so well that they were overwhelmed by the increase of demand for service at their ER. You might want to measure if spending a few more minutes with patients talking about pursuing good life habits like eating the right foods leads to improved health, like lower cholesterol.

Once you have decided what to measure, you should first measure the variable (cost, time, etc.) as it is in the state before you begin an improvement initiative. This is a baseline against which you can measure your improvement. As you begin and proceed through a quality improvement effort, keep track of the measures and see what improvements occur. I suggest that you keep the data in a spreadsheet or database. For short term record keeping you might want to use charts. You will want to check to see if your means are significantly improving (you can use statistical tests if you choose – they are more accurate) and if your variation is decreasing.

Once you have reached your goals, revisit the new processes once in a while and collect new data on the variables you chose to measure. Doing so will help keep you from backsliding to the old ineffective state. Backsliding is all too easy. It is hard to break old habits, but keeping data will help you. This is, in fact, what drives the the success of many programs, such as Weight Watchers.

I hope that I have convinced you that data driven change is the best way to approach quality improvement. It will concretely demonstrate how you are progressing and will prove to others that your site is doing much better. It will help you earn your just rewards!

SOURCE: www.businessperform.com

Business Process Management: A Hot Area That's Still Immature

Research shows that BPM is near the top of many companies' to-do lists. But governance, strategy, IT resource and collaboration issues are huge roadblocks to BPM success.

Business process management, or BPM, is one extremely hot area for vendors and IT consultants. This far-reaching and complex concept is a combination of IT governance, business-activity monitoring, architecture and application integration, workflow management and process modeling techniques.

Done right, BPM allows organizations to define, execute and refine processes that involve human interaction (such as placing orders)—working with and among multiple business applications—and manage dynamic process rules and changes)—not just simple, static flows, states the report.

Many CIOs and businesses, however, are struggling with BPM initiatives today, according to BPM analysts and research. A September 2007 Aberdeen Group report titled "BPM Convergence" states that getting business integration and workflow software products to work together has long been a challenge for companies. "The results have been islands of BPM functionality scattered throughout the organization, each serving a discrete function," states the report.

That's not the only problem; it is just plain difficult to make BPM work, according to another industry survey. The recent survey of 125 product and service companies that looked at how the companies are using BPM to drive innovation found that they "lack the best practices, vision and executive sponsorship necessary to realize the full benefits of their BPM investments." The survey was funded by BPM IT services provider Virtusa and management consultant PRTM.

Even so, a sampling of the survey findings reveals why there's so much BPM hype. More than half of the companies participating in the survey said they use or plan to use BPM. Companies responding to the survey said they are using BPM initiatives to target product and service platform management, CRM and internal operations.

In addition, 47 percent of respondents were interested in deploying BPM for innovative product development, which is a new area for BPM applications that has lots of buzz and vendor activity.

BPM Is a People Problem

But the gap between companies' BPM aspirations and what they have actually been able to accomplish so far looks more like a massive gulf than a gap.

First, it's critical that companies understand the underlying barriers to making BPM not just work, but work well. According to the results of the Aberdeen Group BPM survey of more than 160 IT and business executives and managers, the key challenges for companies deploying a BPM system have less to do with technology and more to do with people and processes.

"Part of the [BPM] solution is technical, but another part is organizational, and this is where many companies stumble," states the Aberdeen report. "It takes highly capable BPM products, a willingness to take a hard look at business processes to succeed, and organizational maturity."

As such, the top two challenges from the Aberdeen survey were organizational: justifying a BPM investment and getting buy-in from business stakeholders.

The Virtusa and PRTM survey results confirm the magnitude of the organizational disconnects that can happen without business-side buy-in. In follow-up interviews with those who were surveyed, many indicated that they were investing in BPM initiatives even though the projects usually lacked senior executive sponsorship. Just 24 percent of respondents reported having a VP or a senior executive in charge of BPM, according to the survey results, and more than 40 percent said there was "no clear decision-maker in place to manage BPM programs."

Not surprisingly, the majority of those surveyed reported that their companies lacked a clear vision or roadmap for deploying and capitalizing on their BPM investment. Only 15 percent said they had a plan for BPM that had stated goals and objectives, and just 12 percent reported that they used a defined roadmap for business process improvements.

Survey respondents claimed that internal and external collaboration was "essential for effective innovation," and 72 percent reported that they had some form of an IT-enabled collaboration capability. "However, follow-up interviews showed that few of these solutions work well," stated the Virtusa and PRTM results overview. "Most were knowledge-management or file-sharing systems that are poorly structured, have inadequate version control and are disconnected from relevant processes."

How to Tame BPM

The Aberdeen Group report makes several recommendations on how companies can improve their BPM performance.

Document Your Processes. "BPM is business process management, not an application," states the Aberdeen report. "Understanding your key business processes is the first step to any BPM implementation. Invest the time to understand the flow of information through your enterprise."

Hire Help. Best-in-class companies, according to Aberdeen's metrics, understand that management consultants are one key improving their businesses. "Engage a consultant firm early," notes the report, "in order to lay the groundwork for choosing a BPM tool."

Plan for Enterprise Convergence. If companies are already using standalone BPM applications, Aberdeen recommends that organizations should explore ways to bring those applications together into an integrated system. "New development should be capable of integrating into the enterprise BPM solution," states the report.

In sum, BPM is becoming a competitive edge for companies that apply it effectively, notes the Aberdeen report. "Don't fall into the technology trap, though. BPM requires expertise and commitment on the process side as well as the product side."

SOURCE: www.cio.com

Listening to the Voice of the Customer

A few years ago, when companies wanted to know what their customers were thinking, they just asked. It sounds simple enough, but it was anything but. Companies painstakingly pulled together a large random sampling of their customers and then overwhelmed them with dozens of questions about anything they could cram into a half-hour telephone survey. They mailed out questionnaires they hoped customers would fill out and return. They brought a handful of customers together for focus group sessions that could last several hours. Then along came the Internet, and companies embraced email and the Web to poll their customers without incurring high phone or postage costs.

In any case, collecting customer feedback was a massive undertaking that few companies did more than once a year—maybe twice a year if they were lucky—and response rates were typically very low. Survey fatigue was rampant, mostly because surveys were not customer-friendly: They were absurdly long and structured with the company's interests—not the customer's—in mind.

Today, those outdated methods are too slow and infrequent and don't go nearly deep enough to keep up with modern business pressures. That's why companies today are turning to more complete voice of the customer (VoC) solutions. VoC solutions take a surgical approach to feedback, making it far more current and relevant and enabling companies to target different groups of customers much more tightly, improving the quality, quantity, and accuracy of the feedback they receive.

While typical surveying methods generally yield about a 10 percent response rate, VoC solutions have been tied to response rates of greater than 50 percent. Italian airline Alitalia, for example, has a 65 percent response rate to customer surveys since implementing the Confirmit Horizons VoC platform. Key to this software's success is that it ensures that customers only receive surveys that are directly relevant to them.

"Until now, the process of identifying our key customers has always been rather complicated and expensive," an Alitalia spokesman said in a statement. "The customer panel we've built using Confirmit means it's now possible to create and deploy a rapid survey to a targeted group of customers who we're confident fully understand the issues we need to talk about. This is a great advantage."

But VoC solutions go far beyond surveying. They take traditional feedback from siloed channels and create a unified approach that takes into account the entire customer journey across multiple channels.

VoC solutions are about "bringing all the data into one place, where a company can look at and understand everything the customer is saying about the company, its products, and customer experiences," says Duke Chung, cofounder and chairman of Parature.

That is done not only with tools to segment customers and collect their feedback, but also with analytics, reporting, and data management tools to derive insight from the feedback and share that insight throughout the company.

VoC, at its core, is an in-depth process designed to capture customer thoughts, expectations, preferences, and aversions; organize them into a hierarchy of needs; and prioritize them relative to particular business goals.

As a final stage, a VoC program also involves closing the loop with corrective action based on the feedback received. VoC goes beyond just hearing what customers are saying to actually listening, taking what is heard, deriving meaning and intent from that, and turning it into action. It should open numerous opportunities for companies to effect immediate change.

"It has to go far beyond simply collecting customer feedback and survey data. Collecting data is great, but unless you have a clear path for taking action, all you have is mounds of data," says John Maraganis, founder, president, and CEO of Omega Management Group, a customer service and support consultancy.

"A VoC approach puts more relevant information into the hands of people who can make a difference, influencing decisions about the business on a day-to-day basis," adds Andrew McInnes, director of marketing at Allegiance. "VoC is a more operational approach that is integrated into day-to-day operations."

Market Scope

And while VoC programs are becoming more prevalent, they are far from ubiquitous. Vendors and analysts agree that VoC is still in the early stages of adoption.

Karine Del Moro, marketing director at Confirmit, puts the split between early adopters and more advanced deployments at 50/50. "The majority of companies are doing VoC in one way or another, but there are not a lot of mature programs," she says. Maturity is achieved when the program is aligned with business objectives and corporate leadership is using the data to improve the business, she says.

"A lot of companies have dipped their toes in the water, but it's not very organized yet," says Oliver Siodmak, a partner in the Digital Transformation Practice, Consulting, and Systems Integration Unit at Infosys. "There is still a set of siloed activities, but there's a tremendous push to enhance CRM tools to capture more information."

Among those firms that are using VoC solutions, the top reason for doing so is improving the customer experience, followed by gauging the overall health of the business, retaining customers, selling on their successes, driving innovation, increasing demand, evaluating specific customer touchpoints, improving or creating products, improving marketing effectiveness, capturing customer referrals, evaluating marketing claims, and understanding brand perceptions, according to recent research by management consulting firm Peppers & Rogers.

McInnes values the VoC market at between $400 million and $600 million in revenue, with technology, marketing, and customer care services and solutions providers all fighting for their own piece of the pie. The vendor landscape is constantly growing, and so are the capabilities being included with new solution releases. "We're at the tip of the iceberg as it relates to the potential that companies can see from VoC programs," says Dave Capuano, vice president of solutions marketing at Verint.

Capuano notes that in most cases, current VoC deployments are tied to enterprise feedback management solutions, while a few more advanced adopters have linked feedback collection tools to speech and text analytics to derive insight.

Nonetheless, analyst firms Saddletree Research, Ovum, Forrester, and Nucleus Research have all identified VoC as a megatrend for 2012.

According to Forrester's "Navigate the Future of Customer Service" report, 2011 saw many companies still lacking formal methods to gather social feedback, analyze it, and set up process flows to act on it. "Many vendors offered customer service analytics packages but did not provide an easy way to separate the noise from actionable feedback or the ability to route feedback to organizational groups where it could be best addressed."

The report predicts a change in 2012, as companies "double down" on feedback processes across channels. "Vendors have been making it easier to link feedback to customer records due to the acquisition of social listening and enterprise feedback companies by CRM and workforce optimization vendors," it said.

Last year, for example, saw NICE Systems acquire Fizzback, and Verint acquire Vovici.

Saddletree Research says 2012 will be the year when speech and text analytics and customer surveying software—the key components of a VoC program—come to market at a remarkable rate. The analyst firm found that 25 percent of companies will evaluate speech analytics for purchase in 2012, while more than 23 percent will evaluate survey software, and more than 14 percent will evaluate text analytics.

Nucleus, in its "Top Ten Predictions—2012" report, said it expects to see "more investment in analytics, activity monitoring, and big data crunching as companies aspire to the perfect combination of targeting, touching, and treating their customers."

The investment is not just coming from large companies either. "Because of the technology to collect data quickly and the commoditization of mobile devices, [VoC] technology is even within the reach of SMBs," Maraganis says.

"It's now available to all sizes and types of companies."

And while the retail, telecommunications, banking, and insurance industries have been among the earliest adopters, the benefits that can be achieved from a VoC strategy span many verticals. "I can't think of any organization that wouldn't benefit from more firsthand information directly from the customer," Siodmak says.

Some firms are now marketing very industry-specific VoC solutions. Beyond the Arc, for example, is a customer experience consulting firm that in early May launched a VoC service to help financial institutions.

"As regulators take a closer look at customer complaints, our VoC service enables financial institutions to really understand where the most urgent problems are from a customer perspective," Beyond the Arc CEO Steven Ramirez said in a statement at the time of the release. "Banks and credit unions need new tools and new approaches to prioritize and strategically address their customer experience issues."

VoC in Action

Healthy Directions, a Potomac, Md.–based nutritional supplements provider, has traditionally used product sales and returns data to gauge customer satisfaction, supplemented with occasional print and email surveys. But these methods didn't tell the company what it really wanted to know: What was driving repeat purchases?

About a year ago, the company turned to the Allegiance Engage VoC platform to gather feedback, analyze trends and relationships, and take action to strategically influence customer purchase decisions. It started by customizing a product survey containing 28 questions, which it sends via email to targeted customer groups. It also sends out quarterly customer relationship surveys and transactional surveys.

"The insight collected is the basis of a number of corporate initiatives to get more repeat customers," says Julie Kaplan, executive director of customer experience at the company. "Now that we know what is driving sales, we can take initiatives to capitalize on that."

Southern States Cooperative, a Richmond, Va., farm supply and service cooperative, also hopes to boost sales through its recent deployment of the Vovici VoC platform from Verint.

In December, the cooperative, which serves customers through more than 1,200 retail outlets in 23 states, instituted a companywide initiative to become more customer-centric. "We quickly determined the first and best step was to invest in a voice of the customer platform that could systematically collect and analyze consumer insights and feedback, enabling us to make informed decisions to prioritize and drive our future plans," says Greg Bucko, manager of customer insights at Southern States.

"We knew very early on that we needed much more than just survey software," he continues. "The collective solution we invested in needed to handle intricate customer feedback across the organization. Our ongoing goal is to continue to grow, engage customers, and build loyalty."

That's already happening at Benchmark Senior Living, which operates 46 senior care residential communities in the Northeast. The Wellesley, Mass., company has already added more than $700,000 to its bottom line as a result of the Allegiance Engage VoC platform it put in place about a year ago.

It achieved that financial windfall by cutting down on the number of residents who move out after less than six months in a facility. The company had 12 fewer move-outs in 2011, which, at an annual fee of $60,000 per person, equates to $720,000 in revenue saved.

Traditional paper-based surveys administered once a year by an outside agency failed to explain why some seniors were leaving. "We spent six months analyzing the data," recalls Brenda Abbott-Shultz, vice president of customer experience at Benchmark, "and we were still very handicapped in our ability to understand what our relationship with our customers looked like."

Instead of polling random samples once a year, the Allegiance Engage platform now allows Benchmark to poll residents and family members seven days, 30 days, and 90 days after they move in. Surveys are conducted online, and response has been high. Of the 2,200 surveys sent out last year, more than 1,900 were returned, according to Abbott-Shultz.

The tool is also helping Benchmark evauate employees, improve internal communications with residents and their family members, and even revise the organizational structure. A residential advisory board was formed as a result of feedback received.

"Having real-time data to act on is vital to resident satisfaction," Abbott-Shultz says.

"We heard some things we did not like, but you have to be prepared for that," she warns. "And if you're going to take the time to ask, you have to be prepared to do something."

Corporate Culture

In each case, the success of the VoC initiative is tied to executive buy-in. It is universally agreed upon that a VoC program requires a change in corporate culture that has to be driven from the top levels of corporate leadership. "It has to start with the CEO and filter its way down," Confirmit's Del Moro advises. "You need to ensure that management is aligned with the same customer service goals. And the front-line employees have to understand how their behavior affects customers every day."

It also helps to outline clear goals for a VoC program. "No company starts its year without a clear sales, marketing, or ERP strategy. These are part of the corporate culture, and everyone accepts it," Maraganis suggests. "Today, companies need to treat VoC the same."

"Organizationally, one group needs to take charge and get the other groups involved in the process," Parature's Chung adds. "Someone has to take the lead in these efforts. Without some structure, it could easily become a free-for-all."

According to Chung, VoC is largely a marketing function now, but many companies are recognizing that the contact center definitely needs to be involved.

Even more companies are creating positions of chief customer officers or vice presidents of customer experience, whose function is to take charge of VoC initiatives, Verint's Capuano points out. These positions typically answer directly to the president or CEO.

And often, this person's compensation is tied to customer satisfaction, as measured by a company's Net Promoter Score or similar metric, Maraganis observes.

Build Buy-in with a Customer Tie-in

As with any resource allocation, to get executives behind a VoC initiative, companies will need to prove ROI, especially as it relates to the company's ability to drive revenue and deliver shareholder value. In the case of Benchmark Senior Living, that was simple—a $720,000 return is easy to quantify. But most benefits aren't quite that obvious.

McInnes says one of the most "straightforward" metrics is the change in customer perceptions after the full closed-loop process is executed. "By following up with a customer immediately after a bad experience, you can turn that person around to a customer who is loyal and will do more business with you in the future."

Companies can also stress the link between the retention of customers and their lifetime value to the company. "Obviously, today, customers who are happy with you are more valuable to the company," McInnes stresses.

Luckily, that mode of thinking is starting to take hold. "Customer service is being seen more today as a key differentiator," Del Moro observes. "Leaders in their fields have seen a direct correlation between their level of profitability and success as a company and a high level of customer service."

Conversely, if you're not doing VoC today, you risk losing customers and revenue," she continues. "You're not making the process improvements that you could, and so you're probably incurring more costs."

McInnes agrees. Without it, "you're leaving a lot of solid business improvement ideas on the table, impacting revenue, sales, and the cost to serve [customers]. You're opening yourself up to losing market share to companies that really listen to their customers," he says. "It's a key to business survival over the long term."

"It can be a huge competitive advantage, helping to make decisions faster and better," Chung adds. "Today, you always need to keep your ears open to what your customers are looking for and use that to improve your products and services."

But, like any CRM deployment, a VoC strategy has to be a long-term effort. "It's not something that you just implement once," Del Moro says. "It's something you need to do on a continual basis."

SOURCE: DESTINATIONCRM

10 Things Lean is NOT!

Inspired by Don McMillan’s “Life After Death by Powerpoint” where he says, “The only way to show them NOT to do this is to show them what not to do”, and correlating to the endless number of myths on practice of Lean, this article clearly tells you 10 things that Lean is not!

If you:

1.     Were thinking of implementing Lean

2.     Have implemented Lean

3.     Are going to discuss Lean in your board meets

Then watch out for these 10 nays!

Lean is not …

1. A waste reduction principle

Too often, I have heard people saying that lean is a principle to eliminate waste and worse still, explain wastes as TIMWOODS or CLOSEDMITTS. Waste elimination is just one aspect of lean and true, eliminating wastes gives tangible benefits, but Lean is not just waste elimination. It is about maintaining the balance and harmony of your organization.

2. Absent of data

In this world, few approaches work without data to improve processes. Lean is also one of these. It needs data at every point. Ask someone who has balanced loads in his production line, and he will tell you why data is so important for Lean also!

3. Easy

This has to be the winner. People say implementing Lean is easy and Six Sigma is tough. So let’s Lean!! Mistake. HUGE mistake. Lean is an integration of 5 elements, and it needs a rigorous 2-3 year journey just to start to see first set of long term gains, which we can build upon. “Lean is a mindset” – Claes Bosch Larsen, Global Operations Director at Falck Global Assistance.

4. Not reliant and not compatible with Six Sigma

As per Nicholas Ruhmann, Director of Operational Excellence, National Flood Services and Mikkel Kragholm, Associate Manager, Novo Nordisk, when it comes to Lean or Six Sigma, companies must make a choice. These journeys are fundamentally different from each other, and thus an integrated version called Lean Six Sigma may just be nothing but using some Lean tools in a Six Sigma approach or vice versa.

5. Implementing projects having poor management controls

Victor J Taveras, a senior executive in the Printed circuits industry believes that he has seen companies refuse to keep up with technology, refuse to invest in infrastructure, refuse to take the bold steps necessary to be market leaders, yet still think they would increase their gross margin points ten percent purely through Lean. Makes sense right!!

6. Possible without stable processes

Jeffrey Liker in his book “Toyota Way Handbook” said that implementing Lean without having your processes in a state of control is like “Playing with fire”. (Right – the playing with fire is my addition to make it more appealing, but I hope you get the point – you need stable processes).

7. Just walking the GEMBA, and hey walking it blindly

A lot of time is spent discussing on how GEMBA walks are an integral aspect of Lean implementations. Yes, go to the floor and observe. Nice – sounds like a plan. But you need to know what to observe! If you are going to just be at the GEMBA with a pen and paper and do nothing, the GEMBA walk is going to be fruitless!

8. Mean. Think more than twice if you fired 40% of workforce as a result of your lean efforts.

Lean principles came later. TPS came earlier. Anyone will tell you that TPS places a lot of importance on respecting people. How can you say you have implemented Lean (literal meaning leaning the organization), by firing 40% workers? I am sure you have a better strategy of saving some bucks!

9. Not building quality in process.

One of the reasons why Toyota was successful and still is, is due to the Andon principle or the popular “Pull the cord”. If you are not going to build in quality in the process and empower production line workers to detect quality problems, chances are you are going to spend the same bucks again and again!

10. Implementation of Lean tools without people development

Consultants and lean practitioners come with a huge toolbox and with an even bigger halo on their heads! For all such people a simple message – If you aren’t going to look at people and how they have developed themselves as part of your Lean effort, you haven’t implemented Lean!

Stay away from these 10 points and you would have embarked on your journey to a holistic implementation of Lean.

The author C. Vishwanathan is a Lean Six Sigma Master Black Belt and has experience in standardizing Lean frameworks and deployed close to 20 projects as part of the frameworks. Vishy is an IASSC Accredited trainer for Lean and Six Sigma as well and is currently Head Consultant and Trainer with The School of Continuous Improvement.

SOURCE:  www.processexcellencenetwork.com

TRIZ A Powerful Methodology for Creative Problem Solving

Projects of all kinds frequently reach a point where as much analysis as possible has been carried out, but the way forward is still unclear. Progress seems blocked, and if the project team is to move forward, it must develop creative solutions to the problems it faces.

You'll already know about techniques such as brainstorming  , which can help with this sort of situation. However, this type of approach, which depends on intuition and the knowledge of the members of the team, tends to have unpredictable and unrepeatable results. What's more, a huge range of possible solutions can be missed, simply because they're outside the experience of the project team.

TRIZ is a problem solving methodology based on logic, data and research, not intuition. It draws on the past knowledge and ingenuity of many thousands of engineers to accelerate the project team's ability to solve problems creatively. As such, TRIZ brings repeatability, predictability, and reliability to the problem-solving process with its structured and algorithmic approach.

About TRIZ

"TRIZ" is the (Russian) acronym for the "Theory of Inventive Problem Solving." G.S. Altshuller and his colleagues in the former USSR developed the method between 1946 and 1985. TRIZ is an international science of creativity that relies on the study of the patterns of problems and solutions, not on the spontaneous and intuitive creativity of individuals or groups. More than three million patents have been analyzed to discover the patterns that predict breakthrough solutions to problems, and these have been codified within TRIZ.

TRIZ is spreading into corporate use across several parallel paths – it is increasingly common in Six Sigma processes, in project management and risk management systems, and in organizational innovation initiatives.

Generalized Solutions

TRIZ research began with the hypothesis that there are universal principles of creativity that are the basis for creative innovations, and that advance technology. The idea was that if these principles could be identified and codified, they could be taught to people to make the process of creativity more predictable. The short version of this is:

Somebody someplace has already solved this problem (or one very similar to it.) Today, creativity involves finding that solution and adapting it to this particular problem.

The three primary findings of the last 65 years of research are as follows:

1. Problems and solutions are repeated across industries and sciences. By classifying the "contradictions" (see later) in each problem, you can predict good creative solutions to that problem.
2. Patterns of technical evolution tend to be repeated across industries and sciences.
3. Creative innovations often use scientific effects outside the field where they were developed.

Much of the practice of TRIZ consists of learning these repeating patterns of problems-solutions, patterns of technical evolution and methods of using scientific effects, and then applying the general TRIZ patterns to the specific situation that confronts the developer. Figure 1, below, describes this process graphically.

Here, you take the specific problem you face, and generalize it to one of the TRIZ general problems. From the TRIZ general problems, you identify the TRIZ solutions to those general problems, and then see how these can be applied to the specific problem you face.

Example

A powerful demonstration of this method was seen in the pharmaceutical industry. Following the flow of Figure 1, the specific problem was as follows: an important process needed cell walls to be broken down in bacteria cells so that hormones inside the cells could be harvested. A mechanical method for breaking the cell walls had been in use at a moderate scale for some time, but the yield was only 80%, and was variable. Higher yields and a scaleable solution were needed.

The TRIZ general problem at the highest level is to find a way to produce the product with no waste, at 100% yield, with no added complexity. One of the patterns of evolution of technology that TRIZ identifies is that energy (fields) replaces objects (mechanical devices). For example, consider using a laser instead of a scalpel for eye surgery. In this case, ultrasound could be used to break the cell walls, or an enzyme could be used to "eat" it (chemical energy). This may seem very general, but it led the pharmaceutical researchers to analyze all the resources available in the problem (the cells, the cell walls, the fluid they are in, the motion of the fluid, the processing facility, etc.) and to conclude that three possible solutions had a good potential for solving their problem:

1. The cell walls could be broken by sound waves (from the pattern of evolution of replacing mechanical means by fields).
2. The cell walls could be broken by shearing, as they pass through the processing facility (using the resources of the existing system in a different way).
3. An enzyme in the fluid could "eat" the cell walls and release the contents at the desired time.

All three methods have been tested successfully. The least expensive, highest yield method was soon put in production.

Eliminating contradictions

Another of the fundamental concepts behind TRIZ is that at the root of many problems is a fundamental contradiction that causes it (we'll give examples below.) In many cases, a reliable way of solving a problem is to eliminate these contradictions. TRIZ recognizes two categories of contradictions:

1. Technical contradictions are classical engineering "trade-offs." The desired state can't be reached because something else in the system prevents it. In other words, when something gets better, something else automatically gets worse. Classical examples include:
   • The product gets stronger (good), but the weight increases (bad).
   • Service is customized to each customer (good), but the service delivery system gets complicated (bad).
   • Training is comprehensive (good), but keeps employees away from their assignments (bad).
2. Physical contradictions, also called "inherent" contradictions, are situations in which an object or system suffers contradictory, opposite requirements. Everyday examples abound:
   • Software should be complex (to have many features), but should be simple (to be easy to learn).
   • Coffee should be hot for enjoyable drinking, but cold to prevent burning the customer.
   • Training should take a long time (to be thorough), but not take any time.

Example

Dairy farm operators could no longer dry cow manure for use as fertilizer due to an increased cost of energy. They were faced with a technical contradiction between dry manure (good) and cost (bad). TRIZ led the operators to a drying method used for the concentration of fruit juice, which required no heat.

Some of the TRIZ Tools

The "General TRIZ Solutions" referred to in Figure 1 have been developed over the course of the 65 years of TRIZ research, and have been organized in many different ways. Some of these are analytic methods such as:

• The Ideal Final Result and Ideality.
• Functional Modeling, Analysis and Trimming.
• Locating the Zones of Conflict. (This is more familiar to Six Sigma problem solvers as "Root Cause Analysis.")

Some are more prescriptive such as:

• The 40 Inventive Principles of Problem Solving.
• The Separation Principles.
• Laws of Technical Evolution and Technology Forecasting.
• 76 Standard Solutions.

In the course of solving any one technical problem, one tool or many can be used.

One of these tools, "The 40 Principles of Problem Solving" is the most accessible "tool" of TRIZ.

The 40 Principles of Problem Solving

These 40 Principles are the ones that were found to repeat across many fields, as solutions to many general contradictions, which are at the heart of many problems. A list of all 40 Principles of Problem Solving can be found at http://www.triz-journal.com/archives/1997/07/b/index.html.

Here are just a few of the Principles and examples of how they could have been used to create products that were once new and innovative:

Principle	Solution
Segmentation (Divide an object into independent parts)	Individually wrapped cheese slices
Local quality (Provide different packaging for different uses)	"Adult" editions of Harry Potter books
Universality (make an object perform multiple functions)	Chocolate spread sold in glasses (with a lid) that can be used for drinking afterwards
Nested Doll	Store within store (coffee shops in bookstores)
Another dimension (Tilt or re-orient object)	Squeezable ketchup bottles that sit on their lids

Using TRIZ

The best way to learn and explore TRIZ is to identify a problem that you haven't solved satisfactorily and try it. Use the List of the 40 Principles of Problem Solving and the Contradiction Matrix tool that can be found at www.triz-journal.com to help you through the process.

Material for this article has been provided by a team of experts from the TRIZ Journal: Katie Barry, Editor, Ellen Domb, PhD, Managing Editor, and Michael S Slocum, PhD, Managing Editor.

SOURCE: Mindtools.com