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Welcome…

Achieving Operational Excellence


through Process Improvement.
Achieving Operational Excellence
through Process Improvement

Vijay Jaswal
Darren Brunt
Andy Jones
Name this country:

 Richest in the world

 Largest military

 Centre for world business trade

 Strongest education system

 World centre for innovation and invention

 Currency the world standard of value

 Highest standard of living

Great Britain – Year 1900


“It is not the strongest
species, nor the most
intelligent that survive, but
the ones that are most
adaptive to change”

Charles Darwin
via BPM
Agenda

13.30 – 14.15 Building a Successful Performance-Driven


Enterprise & Attaining Operational Excellence

14.15 – 14.30 Coffee Break


14.30 – 15.15 Building a Successful Performance-Driven
Enterprise & Attaining Operational Excellence (cont)

15.15 – 15.30 Coffee Break


15.30 – 16.05 Process Improvement in Action

16.05 – 16.25 Laying the groundwork to ensure success &


Building a Business Case

16.25 – 16.30 Q & A – Close


16.30 Drinks
Software AG At-A-Glance

Revenue over €1 Billion

10,000+ enterprise customers

Over 6,000 employees


- 3,500 services consultants
- 850 in R&D

Offices in 70+ countries

Software AG Foundation

9 December 2010 | Software AG - Get There Faster | 6


Industry Thought Leadership
What is Operational Excellence?
What is Operational Excellence?

Operational excellence is a goal of conducting business in a


manner that:

¬ improves quality

¬ obtains higher yields

¬ faster throughput

¬ with less waste.


Operational Excellence in Sport
Processes are the lifeblood of an organisation

Insurance Claim Process


What happens when operational excellence goes wrong?
What happens when operational excellence goes wrong?
“If the process is right,
the results will take care of

themselves.”

Takashi Osada 1993 (Author of The 5S's: Five Keys to a Total Quality Environment )
“Process” is the Common Thread

Over fifty years of management theory and practice…

1950 2010

• Mass Production Process


• Process Quality is• Zero
how the work
Defects • TQM gets• TPS/Lean
done • Lean Six
• PDCA Cycles • Knowledge • Business is executed
• BPR • Six Sigma Sigma
How strategy • CMMI • SCOR
• Total Quality Workers Excellence • ISO-
Control • Technical How performance
• Workflow is9000
optimised • BPM
Changes
Shingo
How customers are Hammersatisfied George
Shewart Crosby Bodek
Deming Ohno Peters Rummler Womack Fingar
Juran Drucker Porter Smith, et al Burlton
Humphrey
Many tools and techniques of process improvement
Natural resources

Suppliers

$500 100%

manufacturers $450

$400
90%

80%

$350 70%

y = f(x) +
$300 60%

$250 50%

$200 40%

ε
$150 30%

$100 20%

$50 10%

$0 0%
Salaries Equipment Transportation Telecom Supplies

distributors

retailers
The Consumer

X One Sigma

LSL USL
- 3s + 3s

Process Width
Design or Customer Width

Requirement width (VOC) ÷ Process Width (VOP) = Process Capability


What’s the next step??

Business IT

BPM enables business & IT alignment…


What is BPM?
What is BPM? – The Analyst’s View

BPM is a discipline for improving and


redesigning business processes
from an outside-in perspective—
spanning people, systems and
organisations.

BPMS are integrated tools that


support process improvements
by designing, executing,
monitoring and optimising cross
functional processes.
What is a BPMS? - A Simple View

A system to facilitate…

…Who Does…
…What…
…When in an Organisation

(with the ability to hook into Enterprise Systems)


What is a BPMS? – More Expanded

a set of tools that can be used to:

 Define, Simulate, Automate & Measure Business Processes

 Provide connectivity “Hooks” into IT Infrastructure (SOA)

 Provide Continuous Process Improvement

 Facilitates the who does what and when

Effectively links People, Process & Systems


Complexity Example – Claims Processing

People
Call Centre Coordinator Claims Internal Loss Customer
Handler Assessor Adjuster

Notice Claim Allocation Handling/ Settlement 3rd Party Admin


of loss Assessment

Systems
Customer Policy Claims Fraud Settlement 3rd parties
Complexity Example – Claims Processing

People
People
Call Centre Coordinator Claims Internal Loss Customer
Handler Assessor Adjuster

Notice Claim Allocation Handling/ Settlement 3rd Party Admin


of loss Assessment
Process

Systems
Systems
Customer Policy Claims Fraud Settlement 3rd parties
?

“If the process is right,


the results will take care of

themselves.”

Takashi Osada 1993 (Author of The 5S's: Five Keys to a Total Quality Environment )
A Quote by me!

“If the interaction between


people, process and systems is
right, the results will take care
of themselves.”

Vijay Jaswal – Software AG


UNIQA Insurance Group Case Study
Best places to apply BPM
Best places to apply BPM

Processes where : They are repetitive


Best places to apply BPM

Processes where: They are paper based


Best places to apply BPM

Processes where: They are labour intensive


Best places to apply BPM

Processes where: There is a high amount of human error


Best places to apply BPM

Processes where: There is high regulatory compliance & governance


Best places to apply BPM

Processes where:

Excel, MS Access, post it notes, email are used to supplement IT systems


Best places to apply BPM

Processes where:

There is a high amount of deadline or SLA intensive steps


Best places to apply BPM

Processes where: There is swivel chair integration


Best places to apply BPM

Processes where: There is a breakdown in customer service


Best places to apply BPM

Processes where: Subject Matter Experts are buried in admin!


Best places to apply BPM

Processes where: There are high training costs


Best places to apply BPM

Most importantly, processes where:

There is strong buy in from business, users, IT & senior management


Collaboration is key
TD Bank Case Study
People Interaction
Human Interaction…

Mainframe Data Account Data (CRM)

Supply Chain Workforce


Partners Location

Real Time Visibility


Focus on Business Results

Request Support Validate Customer Process Issue Resolve Issue Notify Customer Notify Partner
Community

Notify Sales of Escalate Request


Customer Need to Specialist

Customer Enterprise B2B


Modelling Processes
Tools for Process Definition
The Challenges of Process Definition…

Which is the
correct process?
The Challenges of Process Definition…

Which is the
correct process?
The Challenges of Process Definition…

Which is the
correct process?
Architecture of integrated information systems (ARIS)
Measuring Processes

(Business Activity Monitoring)


What is Business Activity Monitoring?

“Providing real-time access to critical business performance


indicators to improve the
performance & effectiveness of the business”
BI & BAM - What’s the difference?
How does it work ?

s or
n
Se By taking transaction
information from business
systems and depositing it in a
process warehouse.

s or
n
Se

s or
e n
S Process
Warehouse
What is Measured?

Volumes –
Anything that is expressed in terms of how many & how much

Velocities –
How fast, cycle times, time to deadline, time-based SLA
compliance

Errors –
System errors, process errors, & business errors

Special Conditions –
User defined business conditions
Sample dashboard
Rules Management
Business Rules

People
Call Centre Coordinator IT Internal Finance Customer
Assessor

Systems

Supply External App


Chain Database Payments
CRM Finance Agencies Servers
Application
Business Rules

People
Call Centre Coordinator IT Internal Finance Customer
Assessor

Rules Engine

Systems

Supply External App


Chain Database Payments
CRM Finance Agencies Servers
Application
BPM Benefits
Benefits of BPM

Business Technology

Business process transparency Realise investment in IT

Business agility Connects disparate systems ‘desiloing


islands of technology’
Greater productivity
More responsive to the business - new
Cost reduction applications, faster, cheaper and
more flexible
Tighter control/compliance
Take advantage of service orientated
Improved customer service infrastructure

= Greater Competitive Edge = Operational Excellence


Case Studies
Customer Success Stories

ISSUE:
Processing Bottlenecks

Reduction in application processing time


from ~18 days to 1 day.

Better integration of external and


internal systems to streamline processes
and ensure accuracy.

More effective management of


forecasted business growth.
Customer Success Stories

ISSUE:
Slow Time-to-Market
Using BPM & SOA saves an estimated 50%
in migration costs, related time and
effort.

Saved over $1 million with a


corresponding 70% reduction in FTEs

Reduced new product time-to-market by


90% & order fulfillment by more than
30%.
Cox Communications Video
Conclusion
Operational excellence is a goal of
conducting business in a manner that:

¬ improves quality

¬ obtains higher yields

¬ faster throughput

¬ with less waste.


Process Improvement Tools…

Link people, processes and systems in the


most effective way

Enables organisations to break free from


technology silos

Ensures processes work first-time, every-time,


on-time, and all the time

Improves, automates and streamlines business processes so organisations can


react faster, improve service and cut costs

BPM = An Operational Excellence Enabler


webMethods User Group

27th January
Sainsburys HQ – Holburn

www.beta.arisalign.com
Thank you!

Q&A

Vijay.Jaswal@softwareag.com
Demo…

Darren Brunt

Software AG
Laying the groundwork to ensure success
&
Building a Business Case

Andy Jones

Software AG
Why innovate ?

Risk of Failure

Distraction
Waste of Money
Why innovate ?
Opportunity Competition
Innovation – the bridge to the future

We cannot solve our problems with the same thinking we used when we created them.
-Albert Einstein
The Innovation Value Chain
Innovation is not the product of logical thought,
although the result is tied to logical structure
Albert Einstein

Value

Idea Idea
Idea Diffusion
Generation Conversion

Too Can’t Can’t Can’t


few select execute collaborate

Ref: Hansen and Birkinshaw


London Business School
Idea Generation

Sources can be:

- External from your value network


- You can see problems they can’t
- They can see solutions you can’t

- Internal
- LEAN moves decision making down
A Portfolio of Opportunities
- The unknown unknowns
- Understanding creates ideas

Insight into the Business


- Cross pollination
- Collaboration
- Recruitment
- Adaptation Social Networking
Idea Conversion – Selection and Development

Selection – what kind of change is right for you ?


• Incremental – improved operations ?
• Radical – new business models ?
• Disruptive – revolutionary new products or business models ?
Initial funding
• Assess value
• Realistic criteria and expectation
• A plan for exploitation
Recap: Best places to apply BPM

Processes where:
• They are repetitive
• Paper based and labour intensive
• There is a high amount of human error
• High regulatory compliance & governance
• Excel, MS Access, post it notes, email are used to supplement IT
systems
• High amount of deadline or SLA intensive steps
• Swivel chair integration – (copy & paste)
• There is a breakdown in Customer Service

• Subject Matter Experts, that hold all the process knowledge


• High Training costs

• Strong buy in from business, users, IT & senior management


Size Matters

Small Project
Big Project
Smaller Returns
Big Returns
Learning By Doing
Steep Learning Curve
Higher chance of Success
Higher chance of failure
The Balancing Act

Perfect Design with Imperfect Execution - or – Imperfect Design with Perfect Execution

Process Innovation Differentiation Process Execution Differentiation


Target Execution
Sustainment Value

Process
Intelligence
Design/Implement
Implementation Point

Effort

Execution
Precision

Time
Get
GetThere Faster
There Faster
Aspects of Business Value

User Implementation
Productivity Productivity
Fewer Rejected
Invoices
Reduced Component
Errors Reuse
Business Value

Reduced
Delays Faster
Deployment

Less Inventory Reduced


Held Improved Maintenance
Compliance

Reduced Risk
Reduced Cost
Of Reporting
Idea Diffusion

Nothing succeeds like success Success is never enough


Proverb Martin Munoz – Sara Lee - Spain

•Reward those that distribute ideas


Promote •Reward those that make shared ideas work
•Treat inbound ideas as being in the Idea Generation Stage
A culture of •Standards simplify Idea Conversion
adoption • standard operating model
• standard technology

Establish
•Diplomacy requires an ambassador
The role of •Sales (internal in this case) requires a salesman
the Evangelist
Case Study – Implementing change
Address Identify Unknown Strategic Solutions
Known Problems Problems (Reform)
(Stabilise) (Improve)

Analysis, Strategy, Execution

Discover, Measure, Monitor Controlling - CPI

Phase 1 Phase 2 Phase 3


30-50 days

Project Charter
Project Charter

Project Charter

Project Charter
Quickstart

Quickstart

Quickstart Project Project Project Increment … Increment … Increment … Increment

Programme
But what came before ? How did innovation arise ?

Business change Idea


Generation
evangelist
Address Identify Unknown Strategic Solutions
What Ready ? Yes
Known Problems
(Stabilise)
Problems
(Improve)
(Reform)

Analysis, Strategy, Execution

Discover, Measure, Monitor Controlling - CPI


Go !
Mission : Reduce Opex Phase 1
30-50 days
Phase 2 Phase 3

Project Charter
Project Charter

Project Charter

Project Charter
COO
Quickstart

Quickstart

How
Quickstart Project Project Project Increment … Increment … Increment … Increment

Ready ? Yes
Programme

Technology change Idea Ready ? Ready ?


evangelist Conversion
Go ! Go !
Best practice or your practice ? New measures, new roles

Number Proportion of Value from Successful


of ideas ? good ideas ? shared ideas ? conversion ?

Internal
External
Venture
scout ?
Capitalist ?

Internal Idea
Broker ?
Conclusions
Innovation

1. : is a response to change and a necessary enterprise reflex


: to anticipate or even create change is the most valuable

2. Typical measures and approaches hide or even discourage it

3.
Conclusion: To Improve Innovation

Study and measure your innovation value chain

Generation
- Communication internal and external
Conversion
3. - Reduce the cost/time of change
- Increase execution precision
Diffusion
- Standard processes & measures
- A communication network
Generation
Conversion
Diffusion
Thank you!

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