Getting Started on the Six Sigma Journey…

Lessons of ExperienceCheckFree Corporation

Agenda

Getting Started on the Journey

The Hard Road

Making the Climb; A Better Way

Sustainable Results

Maxim

Making complex financial activities easier for businesses and consumers…

CheckFree Divisions

Electronic Commerce

�Integrated Electronic Billing & Payment

�Available at 1000+ Financial Service Organizations (Banks, Brokerages, Portals…)

�Quarter Volume = 13m Consumers Initiated OnLine Payments

Generating > 130m Transactions & Receiving > 22m eBills

Investment Services

�Portfolio Management & Reporting Services; Managing Nearly 1.5m Portfolios

Totaling > $900 Billion in Assets

Software

�ACH Solutions Servicing > 66% of Nations 9-Billion ACH Payments

�Financial & Compliance Solutions Providing Reconciliation, Financial Messaging, Workflow, & Compliance Software to > 600 Financial Service Organizations

�iSolutions Leading Provider of eBilling & eStatement Software & Services for B2C & B2B

Six Sigma Context

FY99 – Sigma Challenge (EC)

– Service Quality Measurement Focus

– Six Sigma Defect Measure Methodology

– Evolution Path: ITO >> Development >> Customer Ops >> EC Comprehensive

FY02 – Six Sigma (EC limited)

– Mainstream Six Sigma

– Selective Target Approach: Customer Ops & ITO

– Focus: Develop Six Sigma Core Team & EC Deployment Strategy

FY03 – Enterprise Enablement (EC)

– EC Initiative Deployment Strategy

– Investment Focus: Major Fiscal Year Initiatives, Customer Ops, & Alliance Team

FY04 & FY05 – Six Sigma Process Excellence (Company)

– CheckFree “Process Excellence” Deployment Strategy

– Creation of Corporate Process Excellence Team

– Investment Focus: CIS Deployment & EC Evolution

– Investment Focus: Corporate HR Division

– Investment Focus: Software Division

Deployment Decisions

Approach

�Pilot, Selective Target, Blitz

Competency

�Develop It, Hire It, Outsource It

Training

�Outsource or Insource

Sequencing

�Skill Type, Business Area, People & Positions

Infrastructure

�Organization, Primary Metric, Communication

Projects

�Selection Criteria, Return Requirements, Scope

Getting Started on the Journey

Starting to Climb

…with the best intentions

The Hard Road

Grass Roots Movement

Excitement & Activity

Start-Up Successes

Management Confusion

Leader Impatience

Practitioner Frustration

Momentum (towards…)

+

-

Just Start Equipping

Training Metrics

Skills in the Business

Tool Injuries

Favoring Activity & Noise

Everything’s a nail…

Tools & Techniques

+

-

BIG 1st Projects

BIG Projected Return

High Visibility

Not a Learning Environment

Patience Wears Thin

Energy Wanes

Attention & Focus

+

-

Six Sigma Science

Data, Statistics, Metrics

Y = f(x1, x2, x3,..)

Strict Adherence

Inflexibility

Barrier Creation

Methodology Map

+

-

Some Communication

Awareness

Curiosity

Pockets & Cliques

Elite Membership

In the name of…

Buzz

+

-

Strict Centralization

Competency Momentum

Clarity of Vision

Ownership?

Accountability?

Integration?

Allocation Control

+

-

Run-n-Gun

Surge Ahead

The Deep Ball

Hit a Wall

Left Behind

“The Sound Barrier”

Quick Traction

-

+

The Hard Road

� Grass Roots Movement

� Just Start Equipping

� Big 1st Projects

� Six Sigma Science

� Some Communication

� Strict Centralization

� Run-n-Gun

Making the Climb

from Base Camp to the Summit…

A Better Way

Key Elements to a Successful Journey

+ Scouting the Path

+ Fortifying Base Camp

+ Lead Climbers

+ Enabling the Journey

+ Early Impact

+ Vertical Ascent

Scouting the Path

Terrain & Climate– Assessing, Charting, …

Expedition Strategy– Planning, Pathing, …

Supply Acquisition– Gear, Skill, Experience, …

Assimilating Climbers– Identifying, Preparing, …

Tactical Targeting– Goals, Objectives, …

Scouting the path and preparing for Base Camp…

Run-n-Gun

Tactical Targeting

THE ESSENTIALS

Leadership

Business Process Model

Process Owners

Measurements

Process Teams

Designs

Run-n-Gun

THE BUILDING BLOCKS

BackOffice Toolbox

Process Competency

Coaching

Reward Structure

Integration Management

Enabling Technology

Management Systems

HR Development Systems

CPE Enterprise Elements

CAMP @ L2 Process Owners Measurement Coaching Rewards Structure Integration Mgmt

Claiming the Summit

BASE CAMP Leadership Process Model BackOffice Toolbox Process Competency

CAMP @ L3 Process Teams Designs Enabling Technology Management Systems

CAMP @ L4 Self-Evolution Continuous Improvement HR Systems

CULTURAL PROCESS EXCELLENCE

Just Start Equipping

Fortifying Base Camp: Assimilating Climbers

Just Start Equipping

ENABLING Improvement Innovation Execution Satisfaction

EQUIPPING Tooling Training Coaching

PRINCIPLES New Elements of Importance New Questions New Answers

PERSPECTIVE End-to-End Customer-Centric Dept Spanning Process Model

The Enablement Path

Perspective: The Enterprise Model

…describes how activities across the business should be ORGANIZED, relate, behave, and WORK TOGETHER to deliver CheckFree

Services to our Customers and Shareholders.

Measure Service Performance

Diagnose Service Issues

Assess & Allocate Improvement Investment Opportunities

Managing Process & Procedural Change

Drive Accountability & Achievement in All Our Services

A basis by which we will…Strategic Planning

Business Planning

Customer Relationship Mgmt

Product &

Service Support Product

& Line Strategy

Product Development

Customer Acquisition

Service Delivery

Knowledge Management

HR Management

Marketing & Brand Management

Fiscal Admin Management

Fortifying Base Camp

Principles

We will work to ensure that every process and every sub-process within the Business reflects each of these core process

principles, characteristics, and attributes…

Core Values

Salmon Factor

Process Spanning

Enterprise Model

Adaptability

Base Attributes

PROCESS OUTPUTINPUTS

Quality Input

Continuous Improvement

Approach

R & R

Value-Add

Fortifying Base Camp

Equipping: The Common Methodology

Improvement, Innovation, Design, & Re-Design

A fusion of Best Practice methods and CF experiences…

Six Sigma DMAIC

Six Sigma DMADV / DFSS

Breakthrough Thinking Innovation Toolsets

Holistic Process Enterprise Management

Common Methodology Enablement

A Process Perspective

Understand the Real Problem w/Data

VOC / VOB Integration

Principle Alignment

Data-Driven Decision Making

Measured Achievement

Pre-Imp Validated Solution

Controls & Response

Lead Climbers

Enabled Leaders taking action through participative leadership support…

“Leading from good-to-great does not mean coming up with the answers and then motivating everyone to follow your messianic vision.

It means having the humility to grasp the fact that you do not yet understand enough to have the answers and then to ask the questions that will lead to the best possible insights.”

- Jim Collins

Start @ the Top

Leaders Establish Base Camp

Grass Roots

Early Impact Efforts

LONG TERM EFFORT

EARLY IMPACT = EARLY IMPACT RESULT

Why EI?

Renews Energy

Earns Patience

Builds Momentum

Where EI?

Spin-Off Projects

Tool Assignments

Improv Support

BIG 1ST Project

EI = EI RESULTEI = EI RESULT

Value & Visibility

Simple, but comprehensive communication...

Integrate the message into conversation

Reference the framework in meetings

Public Recognition & Quarterly Forums

Target by Type

UDE Model

Don’t underestimate the power of your Communication Plan…

Some Communication

Value & Visibility

The UDE Model

Some Communication

To comprehend the nature, value, and/or significance of concept, how it impacts them, and integrates into their area of expertise.

Result: Support in understanding and knowledge.

Understand & Support

The ability to recognize, convey, and characterize the value, utilization, and leverage of the concept and how it brings value to the business.

Result: Utilization of the concept in application and delivery.

Describe & Utilize

To equip others with the knowledge, information, and understanding of concept such that its mechanics and value can be leveraged by others.

Result: The transfer of knowledge and experience.

Evangelize & Educate

Coaching & Mentoring

Science through training; Art through coaching…

Six Sigma Science

The Power of Balance COMMIT TO COACH

Send them in 2s

Soft Skill Focus

6 Months, Intense

12 Months, in Pace

MASTERING THE ART

Adaptability

Flexibility

Scalability

Integrity

Enabling the Climb

Six Sigma Centers of Excellence…

Strict Centralization

To establish and enable strategies which equip the corporation to drive shareholder value through quality leadership in every service delivered.

THE MISSION…

In the Business, for the Business, by the Business

CIS

Software Admin

EC

The Expedition: A 4-Front Strategy

FUTURE VIEWBuilding it in for Summit-Quality

VERTICAL ASCENTEnabled Leadership

taking action

UNIFIED CLIMBEngaging the troops &

climbing together

EARLY IMPACTAdvance activity in immediate opportunities

EI = EI RESULT

Vertical Ascent

A fundamental approach to leading the change…

Create a sense of urgency

Build a powerful guiding coalition

Create the vision of what it will look like

Communicate the urgency, need, and vision broadly, frequently

Equip and enable employees with empowerment

Produce sufficient short-term results to silence critics and justify longer-term commitment

Build momentum to tackle tougher problems

Anchor new behavior in the culture of the corporationSource: John Kotter, What Leaders Really Do, Harvard Business Review, 1999.

Sustainable Results

� Grass Roots Movement

� Just Start Equipping

� Big 1st Projects

� Six Sigma Science

� Some Communication

� Strict Centralization

� Run-n-Gun

+ Lead Climbers

+ Perspective & Principles

+ Early Impact

+ Coach the Art

+ Value & Visibility

+ Enable the Business

+ Plan the Expedition

The Hard Road A BETTER WAY