module 1 focused operation v3.0
TRANSCRIPT
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BPO Operational ExcellenceOperational Maturity Fundamentals
Module 1: Focus the Service Operation
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Usage Restrictions
Copyright © 2009 Accenture
All Rights Reserved.
For internal use only.
This material is proprietary to Accenture and should not
be reproduced or used outside Accenture.
Failure to follow these usage restrictions may result in
legal action.
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Agenda
• Introductions 30 min
• Module 1 - Focus the Service Operation 3 hr
• Module 2 – Standardize the Service Operation 3 hr
• Recap and wrap up for the day 30 min
• Module 3 – Plan Service Operations Work 2 hr
• Module 4 – Organize the Service Operation 1 hr
• Module 5 – Make the Service Operation Visual 1 hr
• Module 6 – Improve the Service Operations 2 hr
• Conduct Baseline Maturity Assessment 1 hr
Day 1 Duration
Day 2
We will break up the day with breakout activities and
scheduled breaks
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Executive Summary
• The Operational Maturity Fundamentals are based on 6 categories that define the key components for managing an effective service delivery operation.
• The 6 categories are:
– Focus the Service Operation
– Standardize the Service Operation
– Plan Service Operations Work
– Organize the Service Operation
– Make the Service Operation Visual
– Improve the Service Operation
• In order for us to take our BPO business to the next level it is important for us to establish STABLE, CAPABLE and OPTIMIZED operations through the application of the Operational Maturity Fundamentals
• This training focuses on the key questions for service delivery teams to ask themselves and outlines how the Operational Maturity Fundamentals can help teams address these questions to drive superior execution and improved business performance.
Using Operational Maturity Fundamentals to drive STABLE, CAPABLE and OPTIMIZED operations
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BPO Service Operation Case Study - Overview
Mike Brown is the service delivery lead in Prague for a medium sized UK based financial services client called
UK Bank who have operations throughout the UK and Western Europe. The scope of services provided for UK
Bank is Accounts Payable (AP) and Customer Service Desk (CSD) services from the Prague Delivery Centre,
with these services supporting the bank’s operations throughout the UK and Western Europe.
When the deal was first signed, the original deal economics was 120 FTE’s in AP at a cost of $4.8m; 30
FTE’s in CSD at a cost of $1.2m; PMO + Travel at a cost of $500k. These costs combined represent $6.5m in
operating cost, against a planned revenue of $9m per year which would result in $2.5m in CCI at a CCI % of
28%.
Since first going live with the full scope of services about 18 months ago, there has continued to be a large
amount of client noise surrounding the account. Poor SLA performance during the initial 3 months of operation
from both the AP and CSD teams resulted in the Account Leadership adding additional headcount to address
the service issues (150 FTE in AP @ $6.0m, 40 FTE in CSD @ $1.6m).
The additional headcount was successful in getting all SLA’s to green and they have remained green ever
since. At the same time the amount of client noise has decreased significantly, however there are still a
number of client escalations occurring, even with the SLA performance being all green. The continued
escalations have resulted in additional PMO cost associated with increased client stakeholder management
and unplanned travel (PMO Cost = $1.0m).
Lets introduce the case study of a mid-sized account that has been live for 18 months and is experiencing both service and cost issues
Mike BrownSDL - Prague
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Case Study – Today vs. ODE
Original Deal
EconomicsCurrent Situation
# FTE’sCost
(USD)# FTE’s
Cost
(USD)
Accounts Payable 120 $4.8m 150 $6.0m
Customer Service
Desk30 $1.2m 40 $1.6m
PMO (Inc Travel) NA $0.5m NA $1.0m
Totals 150 FTE’s $6.5m 190 FTE’s $8.6m
Before Mike attempts to improve the account he must first understand the current situation compared with the original deal economics
Original Deal
EconomicsCurrent Situation
Annual Revenue $9.0m $9.0m
Annual Costs $6.5m $8.6m
CCI ($) $2.5m $0.4m
CCI (%) 28% 4.4%
• The current set of 20 contract SLA’s are consistently green from
month to month, however the client feels there is a large variation
in service performance from day to day within a given month.
• In addition to variation in performance, the client also feels that the
current set of SLA’s do not accurately reflect their performance
expectations for the contract.
• The client would like to see more consistent service delivery from
day to day while also having a set of SLA’s that accurately measure
performance against their service expectations
• While the SLA’s are consistently reported as Green there is still are
large amount of client noise in the form of escalations on the
account.
• The current CCI % of 4.4% on the account is well below the target
CCI% of 25% for all BPO accounts, and the ODE CCI% of 28%.
• There is a need to reduce cost while also improving service to get
the account back in line with CCI targets and service expectations
CCI Performance Summary
Cost Performance Summary
What is the BPO Leadership Saying?
What is the Client Saying?
7
Operational Maturity Fundamentals
• Understand who the customer is and what they value
• Understand performance against customer requirements
• Understand which inputs have the largest impact on customer outputs
Categories Expected Outcomes OE Methods
• Understand your process and who is responsible for what activities
• Perform work activities consistently to deliver predictable outcomes
• Integrated MOS in place to manage inputs and monitor outputs
• Understand the amount of work that is expected to be done
• Understand the number of resources required to complete the work
• Workload balancing to manage capacity during peaks and troughs
• Teams are organized around the process to reduce inefficiencies
• Understand where things are, and what is needed to complete the work
• Visual Controls in place to proactively respond to potential service issues
• Performance data displayed over time to identify and react to trends
• Visual Information is up to date and integrated with the overall MOS
• First pass yield implemented as a key measure to help identify rework
• Ability to identify root cause and corrective actions to address issues
• Lean basics understood to help identify improvement opportunities
• SIPOC
• High Level E2E Process Flow
• 3x3 Scorecard / Metrics
• Control Charts
• Detailed Process Flow
• Standard Work Instructions
• Control Plan and MOS
• Volume, Productivity, and
Capacity metrics
• Resources Planning Tool
• Cross Training Skills Matrix
• Resource & Workflow Alignment
• Office Layout
• 5 S
• Visual Controls
• VM / MOS integration
• Visual Management Plan
• First Pass Yield
• Fishbone Diagram and 5 Whys
• Lean Basics
Objective
Understand what
your customer
wants
Define what the
process is and
how to perform it
consistently
Organize teams
around the
process
Visual information
displayed to
manage
performance
Focus the Service
Operation
Plan Service
Operations Work
Standardize the
Service Operation
Make the Service
Operation Visual
Organize the
Service Operation
Improve the
Service Operation
Balance workload
by matching
available capacity
to demand
Teams drive
continuous
improvement
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Operational Maturity Fundamentals
Focus the Service Operation
Plan Service Operations Work
Standardize the Service Operation
Make the Service Operation Visual
Organize the Service Operation
Improve the Service Operation
Objective
• Understand what your customer wants
Expected Outcomes
• Understand who the customer is and what they value
• Understand performance against customer requirements
• Understand which inputs have the largest impact on customer outputs
OE Methods
• SIPOC
• High Level E2E Process Flow
• 3x3 Scorecard / Metrics
• Control Charts
Module 1 - Focus the Service Operation
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Becoming a Focused Service Operation
• Teams can not clearly explain what outcomes are delivered to the customer
• Teams are not clear on what the customer expects and are only using the SLA metrics
to assess their service performance
• While SLA performance is currently all green, there continues to be frequent client
escalations
• The team can not explain the main end to end activities that deliver outcomes to the
customer
• Team members do not understand which operational inputs have the largest impact on
service performance, and as a result are not sure what they should be focused on
While Mike’s team is currently green across all SLA’s he is still experiencing frequent escalations from the client
What is Mike’s Team Experiencing Today?
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How do you know if the outcomes delivered to customer are consistently meeting their service expectations today and will continue to do so in the future?
Who are your customers and what are the outcomes that are delivered to them?
What are the customer’s service expectations in terms of Delivery, Quality and Cost and how is performance against these expectations measured (both SLA and non-SLA)?
What do you measure today to proactively ensure you deliver to customer expectations
What are the main activities performed end to end to deliver expected outcomes to the customer and what are the critical inputs that have the largest impact on these outcomes?
Which operations activities are clearly tied to delivering the contractually agreed outcomes?
What you need to know to be a Focused
Service Operation
What are the Critical Questions you should be asking yourself to drive focus
1.
4.
5.
2.
3.
6.
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Step 1
How do you know if the outcomes delivered to customer are consistently meeting their service expectations today and will continue to do so in the future?
Who are your customers and what are the outcomes that are delivered to them?
What are the customer’s service expectations in terms of Delivery, Quality and Cost and how is performance against these expectations measured (both SLA and non-SLA)?
What do you measure today to proactively ensure you deliver to customer expectations
What are the main activities performed end to end to deliver expected outcomes to the customer and what are the critical inputs that have the largest impact on these outcomes?
Which operations activities are clearly tied to delivering the contractually agreed outcomes?
1.
4.
5.
2.
3.
6.
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OE Method 1 - SIPOC
What Does the Tool Deliver?
How do we get focused on what the customer wants?
• SIPOC stands for Supplier, Inputs, Process, Outputs, and Customer
• Provides context and scope of process being analyzed
• Defines the customers of the process and how they measure
process performance
• Defines the suppliers of the process and requirements of what they
provide to the process
What tool is available to help?
SIPOC
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SIPOC: Stands for Supplier, Inputs, Process, Outputs, and Customer- Provides context and scope of process being analyzed- Defines the customers of the process and how they measure process performance- Defines the suppliers of the process and requirements of what they provide to the process
Supplier CustomerProcess
Input Requirements
Inputs
• Inputs
• Requirements
Output Requirements
Outputs
• Outputs
• Requirements
OE Method 1 - SIPOC
The Template:
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Supplier CustomerProcess
Input Requirements
Inputs
• Inputs
• Requirements
Output Requirements
Outputs
• Outputs
• Requirements
WHAT is required to
execute the process
Inputs and Outputs are
often thought of as nouns
Requirements are often
thought of as adjectivesRequirements of the
Supplier Input -. Eg.
98% of inputs received
within agreed time
WHO Provides
The INPUTS
Required. For
the Process
Who receives
the OUTPUTS
of the process
WHAT does the Process
Deliver. Eg. Processed
Invoice
Requirements of Customer
Output Eg. Invoices
processed with 3 days
OE Method 1 - SIPOC
SIPOC: Stands for Supplier, Inputs, Process, Outputs, and Customer- Provides context and scope of process being analyzed- Defines the customers of the process and how they measure process performance- Defines the suppliers of the process and requirements of what they provide to the process
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Key Outputs: SPEED, QUALITY & COST
For Any Operations Process There Are 3 Critical Output Categories
What is critical is to balance all three so that performance is on target for each. There is no point in
improving speed by increasing Cost, or by reducing Quality
Customer Client Client Internal
DefinitionEnd to End Cycle Time to process a
transaction
Error Rate – Percentage of Output
units that are defective
Productivity – Number of Outputs
per FTE per day
Additional
Notes
This represents the end to end cycle
time for processing a transaction
The cycle time started when a
transaction enters our factory and
ends once it is processes and leaves
This represents the end quality that
the Client feels.
Units that have been process and
rejected by the customer are
deemed defective
Productivity is the operational
measure of cost
In order to set productivity targets
inline with ODE, use the daily volume
that must be processes / # FTE in
ODE
Speed CostQuality
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OE Method 1 - SIPOC
Lets look at the example produced by Mike and his Leadership team:
Mikes team created a SIPOC for their accounts payable team to help understand the key output requirements and the inputs received to generate this output
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Mike and his team also conducted an assessment to determine what activities the team were currently
performing that was not part of the contract scope (ie where is the team over delivering)
The contract scope assessment identified 7 FTE’s worth of work that was being performed by the team which was not part of the original contract scope
Contract Scope Assessment
Activity In Scope
(Y/N)
Performed
Today
(Y/N)
FTE
Impact
Generate additional metric report for non SLA metrics for
client and submit on a daily basis N Y 0.5 FTE
Conduct daily reviews with client of additional metrics
report N Y 0.5 FTE
Additional time spent managing escalations from clients
caused by client having additional metrics report N Y 2 FTE
Continue to follow up with client for invoices requiring
approval until client approves, however the contract states
that we should only send email notification every 2 days
and reject invoice after 3rd notification if no response
N Y 4 FTE
Total: 7 FTE
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OE Method 1 – SIPOC - Summary
What has producing the SIPOC enabled Mike to Realize?
• Mike and his team are able to clearly articulate who their customer is and what
outcomes are delivered to the customer
• The team understands the customers service expectations in terms of Delivery,
Quality and Cost
• Mike can compare the activities of his team against the core objective of the
operation – Are we the team focussed on core activities.
Who are your customers and what are the outcomes that are delivered to them?
Which operations activities are clearly tied to delivering the contractually agreed outcomes?
1.
2.
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Background:
Module 1 – Focus
Introduction to Breakout Activities
In each of the training modules that follow we will show how Mike is able to apply the OE
Operations Management Fundamentals to help address both the service and cost issues.
• The challenges Mike is experience on his account apply equally across both the Customer Service Desk
and Accounts Payable teams. The training content shows examples of how Mike’s team has applied the
OE methods for their Accounts Payable team. Once you have walked through the Accounts Payable
example you will be asked to split into separate teams to work through a series of breakout activities
focused on improving performance of the Customer Service Desk through application of the OE methods.
• The Customer Service Desk has a current headcount of 40 FTE’s which is 10 FTE’s above the ODE which
equates to an additional cost of $400k per year. In addition to these cost issues, the client is often
complaining that they experience high variability in performance from day to day, and there are still a large
number of escalations occurring even when the SLA’s are all green.
• Please spend some time now to form into your groups. These are the groups you will remain with for all
breakout activities in the training. We recommend a maximum of 4-5 groups, with each group having a
minimum of 4 members.
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Activity 1.1 – Focus
The large number of metrics being reported is making it hard for Mike and his team to
understand what the customer expects. It often seems the customer is not even sure...
• The Customer Service Desk team currently has a set of 10 contractual SLA’s that are measured and
reported each month. In addition to the SLA’s the client has also requested a monthly report with an
additional 12 KPI’s that they would like to see reported. Armed with this additional information the client
often escalates performance issues based on the 12 additional metrics, even when the SLA metrics are all
Green. While the team recognizes UK Bank is their main customer, the large number of performance
metrics and frequent client escalations has made the team unclear about what the customer expects.
• Mike Brown decides to hold a meeting with his Customer Service Desk leads to get a better picture of what
they are currently delivering to the customer, and to understand if this aligns with the customer’s
expectations and with the what is written in the service contract. During the meeting the team makes the
following key observations:
– There are 10 different SLA’s listed for CSD, however the main output delivered to the customer is a
resolved ticket with the customer expecting that all tickets be closed within 3 business days. The
customer also has the option to complete a customer satisfaction survey once each ticket is closed
to provide feedback on the service. There is an SLA stating that this survey score (CSAT) should be
> 80%. The team agrees that this is the number one measure of quality
Activity 1.1 – Who is the main customer and what do they expect?
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…it also feels like we are sometimes a little to responsive to the customers request. This
results in the team spending time on additional work that is not part of the original contract.
• Key Observations (Continued)
– The current volume of 600 tickets received by the team is inline with the original deal assumptions,
however the team size is currently 40 rather than the ODE of 30. In order to get to the ODE of 30 the
team would need to close 20 tickets per person per day.
– When looking at the contract it is clear that the additional 12 metrics produced each month are not
part of the original contract scope. This additional reporting is consuming about 0.5 FTE to complete
each month, while the additional visibility this provides the client has also lead to increased
escalations
– About 10% of the call volume are suppliers who are calling to get a status on their invoice status.
This equates to about 4 FTE’s worth of work. The original contract stated that UK Bank would have a
Invoice Status portal available for suppliers to check this status, however delays caused on the client
side have resulted in this functionality not being available.
– The contract lists a minimum set of information that must be provided by the client in order for a ticket
to be created, however the help desk agents are creating tickets even when the client does not
provide the necessary information for about 10% of the volume resulting in additional effort of 10 min
being required to close the ticket.
Activity 1.1 – Focus
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Breakout Activity (30 min):
Module 1 – Focus
Introduction to Breakout Activities
In the next 20 minutes, work with your team to complete the activity below. Please use flip
charts to capture your work and be ready to report out to the group
• Create a SIPOC to help the team get clarity on the key outputs delivered to the customer. What are the
customers expectation in terms of speed, cost and quality? Also what are the input requirements for
Mikes team to successfully deliver service?
• Please list all activities performed by Mikes team that are not part of the contract scope. What is the
approximate FTE impact of performing these activities and what do you recommend Mike does to
address this?
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Step 2
How do you know if the outcomes delivered to customer are consistently meeting their service expectations today and will continue to do so in the future?
Who are your customers and what are the outcomes that are delivered to them?
What are the customer’s service expectations in terms of Delivery, Quality and Cost and how is performance against these expectations measured (both SLA and non-SLA)?
What do you measure today to proactively ensure you deliver to customer expectations
What are the main activities performed end to end to deliver expected outcomes to the customer and what are the critical inputs that have the largest impact on these outcomes?
Which operations activities are clearly tied to delivering the contractually agreed outcomes?
1.
4.
5.
2.
3.
6.
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OE Method 2 – High Level Process Flow
What Does the Tool Deliver?
What are the main activities performed end to end to deliver outcomes, and which inputs have the largest impact on performance
• This tool flows down from the SIPOC and starts to break down the
process by the individual steps.
• Identifies Inputs (Xs) and Outputs (Ys) for each process step
• Identifies Critical Process Inputs (Xs) that drive process performance
(Y’s) allowing Mike to focus on managing the right inputs
High Level
Process Flow
What tool is available to help?
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Process Documentation Overview:
Process Hierarchy
SIPOC
• Stands for Supplier, Inputs, Process, Outputs, and Customer
• Provides context and scope of process being analyzed
• Captures the Voice of the Customer (Output requirements)
Inputs
Outputs
Step 1 Step 2 Step 4 Step 5 Step 6
• Outputs • Outputs • Outputs • Outputs • Outputs
• Inputs • Inputs • Inputs • Inputs • Inputs
Inputs
Outputs
Step 1 Step 2 Step 4 Step 5 Step 6
• Outputs • Outputs • Outputs • Outputs • Outputs
• Inputs • Inputs • Inputs • Inputs • Inputs
High-level Process Map
• Defines major steps (sub-processes) of the end-to-end
process
• Identifies Inputs (X’s) and Outputs (Y’s) for each process step
• Identifies Critical Process Inputs (X’s) that drive process
performance (Y’s)
Process
StepDecision
Process
Step
Process
Step
Process
Step
Decision
Process
Step
Process
Step
Terminate
Process
Step
Process
StepDecision
Process
Step
TerminateProcess
StepDecision
Process
Step
Process
Step
Process
Step
Decision
Process
Step
Process
Step
Terminate
Process
Step
Process
StepDecision
Process
Step
Terminate Detailed Process Map
• Define the how-to level of steps and decisions within a
process
• Provides for operator training and the occasional reference
How do all these Process Tools fit together?
Mike Brown
Supplier CustomerProcess
Input Requirements
Inputs
Output Requirements
Outputs
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High-level Process Map Example
Sort and
Scan Invoices
Enter
Invoice
Resolve
Invoice
Exceptions
Post Invoice
for Payment
High-level Process Map
• Defines major steps (sub-processes) of the end-to-end process
• Identifies Inputs (X’s) and Outputs (Y’s) for each process step
• Identifies Critical Process Inputs (X’s) that drive process performance (Y’s)
Invoice
Processing
Ah, I can see how the
Process box from the SIPOC
expands to show the high
level process steps...
Mike Brown
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High-level Process Map – Defining Outputs
Input
s
Output
s• Approved & Validated
invoice
• Unapproved or
Rejected invoices
• Invoice entered on
system
• Invoice not entered due
to lack of data
• Flagged exceptions
• Resolved invoice
exception
• Rejected Invoice
• Processed invoice
posted for payment
• Rejected invoices
notification to Client
Identify Outputs from each step of the Process
OUTPUTS:
What are the
key outputs
produced at
each step
For all Items it is important to be as
specific as possible
Sort and
Scan Invoices
Enter
Invoice
Resolve
Invoice
Exceptions
Post Invoice
for Payment
Should match the ultimate
process outputs within the
SIPOC
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Input
s
Output
s
• Agreed volumes of
invoices
• Backlog of invoices
received
• Functioning system
• Trained, Skilled
resources
• Approved & Validated
invoice
• Documented
procedures
• System
• Invoices in data
repository
• Processed invoice with
Flagged exceptions
• Resolution Procedures
• Suitably trained staff
• Entered invoices and
Invoices with resolved
invoice exceptions
• Postal services
Highlight Inputs needed to drive those outputs
INPUTS:
What are
the Inputs
for each
process
step
required to
deliver the
output at
each step?
For all Items it is important to be as
specific as possible
• Approved & Validated
invoice
• Sorted Invoices
Scanned
• Unapproved or
Rejected invoices
• Invoice entered on
system
• Invoice not entered due
to lack of data
• Flagged exceptions
• Resolved invoice
exception
• Rejected Invoice
• Processed invoice
posted for payment
• Rejected invoices
notification to Client
Sort and
Scan Invoices
Enter
Invoice
Resolve
Invoice
Exceptions
Post Invoice
for Payment
High-level Process Map – Defining Inputs
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Classifying Inputs
How do you classify process inputs?
Criticality
Controllability
Critical: Inputs that have largest impact on Output performance.
Non Critical: Inputs that impact output performance, but to a lesser extent
Controllable: Inputs that fall within the control of the operations team (e.g. Training level)
Uncontrollable: Inputs outside the teams control (e.g. Volumes)
Critical
Non Critical
Non Controllable Controllable
Critical Operational
Levers
Key Factors to Monitor
Additional Potential Levers
The easiest way to classify process inputs through discussion with SME and team members
Criticality
Controllability
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Output
s
Mike met with his team leads to classify the process inputs as either controllable (C) or
uncontrollable (U), and he also identified which inputs were critical (X)
Input
s
• Agreed volumes of
invoices UX
• Backlog of invoices C
• Functioning system U
• Trained, Skilled
resources CX
• Approved & Validated
invoice U
• Documented
procedures CX
• System U
• Invoices in data
repository U
• Processed invoice with
Flagged exceptions U
• Resolution Procedures
CX
• Suitably trained staff C
• Entered invoices and
Invoices with resolved
invoice exceptions UX
• Postal services U
• Approved & Validated
invoice
• Sorted Invoices
Scanned
• Unapproved or
Rejected invoices
• Invoice entered on
system
• Invoice not entered due
to lack of data
• Flagged exceptions
• Resolved invoice
exception
• Rejected Invoice
• Processed invoice
posted for payment
• Rejected invoices
notification to Client
Sort and
Scan Invoices
Enter
Invoice
Resolve
Invoice
Exceptions
Post Invoice
for Payment
High-level Process Map – Defining Inputs
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OE Method 2 – High level Process Flow Summary
What has producing the High level Process Flow enabled Mike to Realize?
• Mike and his team now understand the high level process steps that delivery
outputs to the key customer
• Mike and his team understands the critical inputs that have the largest impact on
outputs delivered so they are now able to focus on the managing the right things
• The team understands which inputs they can control and which they can not. This
helps them understand what they can actively manage, and what they need to
monitor
What are the main activities performed end to end to deliver expected outcomes to the customer and what are the critical inputs that have the largest impact on these outcomes?
3.
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Activity 1.2 – Focus
It often seems the team isn’t sure what steps or inputs are required to complete the
delivery process, or how many people it takes to complete the process.
• While Mike and his team are now focused on delivering outcomes that meet customer expectations (ie
resolving tickets within 3 days, and CSAT > 80%), the team members are still not able to clearly explain
the end to end activities required to close a ticket. In addition Mike is finding that the team is not really sure
what operational inputs they should be focused on managing to ensure service expectations are met.
• Mike decides to hold a meeting with his CSD team leads to identify the main end to end activities that are
performed by the team to resolve customer queries. The team walks through the main end to end activities
performed by the team.
– The first step is for the team to receive a query from the customer that requires resolution. Queries
may be received either view email or telephone.
– When a query is resolved via telephone the CSD agent opens a new ticket in the system and
documents the new customer query.
– If the CSD agent is not able to resolve the query during the phone call, the call will end with the ticket
being logged and transferred to the tier 2 support team who focus on investigating and resolving
open tickets.
– Once an open ticket is resolved either by the tier 2 team, or on the original call by the tier 1 CSD
agent, the resolutions is documented and communicated to the customer and the ticket is closed.
Activity 1.2 – What are the main activities performed end to end
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Breakout Activity (15 min):
Module 1 – Focus
Breakout Activity
In the next 15 minutes, work with your team to complete the activity below. Please use flip
charts to capture your work and be ready to report out to the group
• Create the high level process flow from the point that a query is received to the point that the ticket is
closed based on what the team discussed
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Activity 1.2 – Focus
The team isn’t sure which of the many inputs are within the group’s control...
• The team agreed the high level process flow as:
– Receive Query and Open Ticket
– Resolve or Escalate Ticket (Tier 1)
– Investigate and Resolve Ticket (Tier 2)
– Communicate Solution and Close Ticket
• With the end to end activities required to resolve a ticket, the team can focus their attention on identifying the key
operational inputs that have the largest impact on service performance. The team first walked through each of the high
level process steps and identified the key operational inputs required to perform each step
– Receive Query and Open Ticket – Key inputs include: Accurate Customer Query; Trained Tier 1 CSD Agent;
Available Tier 1 CSD Agent; Available Comms Channels (email & phone); Available CSD Scripts & Job Aids
– Resolve or Escalate Ticket – Key inputs include: Open Ticket; Trained Tier 1 CSD Agent; Available Tier 1 CSD
Agent; Available Comms Channels (email & phone); Available CSD Scripts & Job Aids
– Investigate and Resolve Ticket – Key inputs include: Escalated Ticket; Trained Tier 2 CSD Agent; Available Tier 2
CSD Agent; Right access to Accounts Payable System; Timely Response from Customer for information requests
– Communicate Solution and Resolve Ticket – Key inputs include: Accurate resolution to Ticket; Timely resolution of
Ticket; Trained CSD Agent; Available CSD Agent; Available Communication Channels (email & phone); Available
Ticket System; Available CSD Scripts and Job Aids
Activity 1.2 (Continued) – Which inputs have the biggest impact on service performance
35Copyright © 2009 Accenture All Rights Reserved.
Activity 1.2 – Focus
...and aren’t sure which inputs are critical to manage vs. others.
• Once the main inputs for each step were identified the team discussed and agreed on the top 5 inputs
having the largest impact on service performance. The team listed the following inputs in order of impact
to service delivery
– Volume of Customer Queries
– Accuracy of Customer Queries
– Trained Staff (First 2 process steps)
– Available CSD Agents (All steps)
– Timely Response from Customer for Information Requests
Activity 1.2 (Continued) – Which inputs have the biggest impact on service performance
36Copyright © 2009 Accenture All Rights Reserved.
Breakout Activity (15 min):
Module 1 – Focus
Breakout Activity
In the next 20 minutes, work with your team to complete the activity below. Please use flip
charts to capture your work and be ready to report out to the group
• List the inputs and outputs for each process step on your high level process flow.
• Classify each process input as controllable vs non-controllable, and identify the critical inputs that have
the largest impact on service performance in the process
37Copyright © 2009 Accenture All Rights Reserved.
Step 3
How do you know if the outcomes delivered to customer are consistently meeting their service expectations today and will continue to do so in the future?
Who are your customers and what are the outcomes that are delivered to them?
What are the customer’s service expectations in terms of Delivery, Quality and Cost and how is performance against these expectations measured (both SLA and non-SLA)?
What do you measure today to proactively ensure you deliver to customer expectations
What are the main activities performed end to end to deliver expected outcomes to the customer and what are the critical inputs that have the largest impact on these outcomes?
Which operations activities are clearly tied to delivering the contractually agreed outcomes?
1.
4.
5.
2.
3.
6.
38Copyright © 2009 Accenture All Rights Reserved.
OE Method 3 – 3x3
What Does the Tool Deliver?
3x3 Thinking – Managing critical few inputs to deliver Outputs
• Enables a comprehensive understanding of our process
performance
• Enables teams to focus on key operational levers that drive
performance
• Equips teams to proactively manage operations using data to
facilitate improved decision making
• Enables identification and prioritization of improvement
opportunities using data
3x3
What tool is available to help?
39Copyright © 2009 Accenture All Rights Reserved.
The thinking is simple – You Manage the Process Inputs in order to successfully deliver the outputs
OE Method 3 – 3x3
What is a 3x3?
• A matrix for displaying the vital metrics for a process
• Includes the three most vital metrics for our customer Outputs on one side (SPEED, COST & QUALITY)
• For each it shows the three most critical inputs that can be managed to ensure delivery of those outputs.
• Lets look at this from Mike’s perspective
• Mike Currently has 20 SLA metrics – probably based on a monthly average and showing Green or Red
• Does this help Mike manage his operation?
• Will he know if an SLA is missed before it happens?
• Will Mike know why the SLA was missed, and what was the cause?
The answer is no! In order to make the performance predictable Mike needs to accept he cannot directly influence the
SLA’s (Outputs) – what he can influence or track are the resources, processes, training, work scheduling, volumes, etc.
(Inputs) and by measuring and managing these he can identify risks to the SLA’s early and proactively react
Mike BrownSDL - Prague
40Copyright © 2009 Accenture All Rights Reserved.
Building a Meaningful 3x3
Building an effective 3x3 scorecard is an iterative process
Understand what the Customer Wants
(VoC)
Identify a measurable way of tracking delivery
against VoC (Output Metrics)
Identify measurable inputs and targets
which drive the Output metric performance
(Input Metrics)
Validate and Calibrate Input Metrics – Are we
measuring the right things and reacting at
the right time?
STEP 1
STEP 2
STEP 4
STEP 3
Data Collection
The 3x3 should be assessed on an
ongoing basis to ensure we are
measuring the correct input and output
metrics, and that the targets are set at
the right level.
41Copyright © 2009 Accenture All Rights Reserved.
Building a Meaningful 3x3
Lets continue to look at Mikes Invoice Processing operation
We have already identified that the key customer requirements fit into the following Key Area’s
What is the real Feedback from the customer that defines in real terms what the customer wants?
Understand what the Customer Wants (VoC)STEP 1
Speed
Cost
Quality
UK Bank: We want to have all invoices processed within 3 Days
UK Bank: We expect < 0.5% of invoices to have errors
BPO Leadership: We should be processing 35 invoices per person per day to be within ODE
Speed
Cost
QualityQuestion: What is the main Output we provide to the
Customer, and what is their expectation around
speed and Quality?
42Copyright © 2009 Accenture All Rights Reserved.
Building a Meaningful 3x3
Identify a measurable way of tracking delivery the VoC (Output Metric)STEP 2
UK Bank: We want to have all invoices
processed within 3 Days
UK Bank: We expect < 0.5% of invoices to have
errors
Accenture: We should be processing 35 invoices per
person per day
What is the key metric we can use to Operationally measure the VoC
requirement?
Output from STEP 1
CycletimeDays to complete process from
[START] to [STOP]
Error Rate% Errors on Output Units
ProductivityVolume per day / #FTE’s
Target 3 Days
Target 0.5 %
Target 35
Cycletime (Days) Invoice
Receipt to Processing
CompleteR/A/G
Target Actual Trend
3 Days 2.51 Days
Metric Title
Summary Performance
against Target
Red: Outside Target
Amber: Within 10% of
Target level
Target
Performance
Actual
Operational
Performance
Overall Trend Shape
Note: This is NOT
simply an indication of
the metric movement
since the previous
period, but a summary
trend from the Control
Chart (Covered Later)
VOC Output Metric 3x3 Format
43Copyright © 2009 Accenture All Rights Reserved.
Building a Meaningful 3x3
UK Bank: We want to have all
invoices processed within
3 Days
UK Bank: We expect 0.5% of processes to be
error free
Accenture: We should be
processing 31.25 invoices per
person per day
Output from STEP 1
Cycletime (Days) Invoice
Receipt to Processing
CompleteR/A/G
Target Actual Trend
3 Days 2.51 Days
% Errors on Output Units R/A/G
Target Actual Trend
0.5% 0.5%
Volume per day / #FTE’s R/A/G
Target Actual Trend
31.25 25
Output from STEP 2
Identify a measurable way of tracking delivery the VoC (Output Metric)STEP 2
44Copyright © 2009 Accenture All Rights Reserved.© 2006 Accenture. All rights reserved.44
Output
Leading Metrics Lagging Metrics
Speed
Cost
Quality
Building a Meaningful 3x3
Identify measurable inputs and targets which drive the Output metric performance (Input Metrics)STEP 3
Inputs
• Agreed volumes of
invoices UX
• Backlog of invoices C
• Functioning system U
• Trained, Skilled
resources CX
• Approved & Validated
invoice U
• Documented
procedures CX
• System U
• Invoices in data
repository U
• Processed invoice with
Flagged exceptions U
• Resolution Procedures
CX
• Suitably trained staff C
• Entered invoices and
Invoices with resolved
invoice exceptions UX
• Postal services U
• Approved & Validated
invoice
• Sorted Invoices
Scanned
• Unapproved or
Rejected invoices
• Invoice entered on
system
• Invoice not entered due
to lack of data
• Flagged exceptions
• Resolved invoice
exception
• Rejected Invoice
• Processed invoice
posted for payment
• Rejected invoices
notification to Client
Sort and
Scan Invoices
Enter
Invoice
Resolve
Invoice
Exceptions
Post Invoice
for Payment
Inputs
• Agreed volumes of
invoices UX
• Backlog of invoices C
• Functioning system U
• Trained, Skilled
resources CX
• Approved & Validated
invoice U
• Documented
procedures CX
• System U
• Invoices in data
repository U
• Processed invoice with
Flagged exceptions U
• Resolution Procedures
CX
• Suitably trained staff C
• Entered invoices and
Invoices with resolved
invoice exceptions UX
• Postal services U
• Approved & Validated
invoice
• Sorted Invoices
Scanned
• Unapproved or
Rejected invoices
• Invoice entered on
system
• Invoice not entered due
to lack of data
• Flagged exceptions
• Resolved invoice
exception
• Rejected Invoice
• Processed invoice
posted for payment
• Rejected invoices
notification to Client
Sort and
Scan Invoices
Enter
Invoice
Resolve
Invoice
Exceptions
Post Invoice
for Payment
Sort and
Scan Invoices
Enter
Invoice
Resolve
Invoice
Exceptions
Post Invoice
for Payment
45Copyright © 2009 Accenture All Rights Reserved.© 2006 Accenture. All rights reserved.45
Building a Meaningful 3x3
Identify measurable inputs and targets which drive the Output metric performance (Input Metrics)STEP 3
CycletimeDays to complete
process from [START] to [STOP]
Error Rate% Errors on
Output Units
ProductivityVolume per day /
#FTE’s
Identified OutputsInitial Cut of Potential Inputs to Measure, and ranking based on perceived impact on output
Based on inputs from Subject Matter Experts and what has previously been identified within the High Level Process Map
BacklogVolumes Received
% Invoices with
Exceptions
% Non PO Matches
Average Experience of Agents (Months)
% Internal Quality Errors
Average Experience
of Agent (Months)
Absenteeism% Scanned
Invoice Rejections
Average Experience of Agents (Months)
Total Headcount
% Non PO Matches
% Invoices with
ExceptionsAbsenteeism
% Non PO Matches
14 3 5 2
21 3 5 4
13 4 5 2
Represents SME’s subjective ranking of impact that input has on driving the output
46Copyright © 2009 Accenture All Rights Reserved.
OE Method 3 – 3x3 Thinking
UK Bank: We want to have all
invoices processed
within 3 Days
UK Bank: We expect < 0.5% of invoices to have
errors
BPO: We should be processing 35
invoices per person per day
Cycletime (Days) R/A/G
Target Actual Trend
<3 Days 2.51
% Errors on
Output UnitsR/A/G
Target Actual Trend
<0.5% 0.5%
Productivity:
Volume per day /
#FTE’s
R/A/G
Target Actual Trend
>32 25
VoC Output Metrics Input Metrics
Volumes (Daily) R/A/G
Target Actual Trend
<3750 3200
Average
Experience of
Agents (Months)
R/A/G
Target Actual Trend
4 mths 5 mths
% Invoices with
ExceptionsR/A/G
Target Actual Trend
<25% 23%
% Internal Quality
ErrorsR/A/G
Target Actual Trend
<0.2% 0.2%
Average
Experience of
Agents (Months)
R/A/G
Target Actual Trend
4 mths 5 mths
% Non PO
MatchesR/A/G
Target Actual Trend
<5% 8%
Total Headcount R/A/G
Target Actual Trend
<120 150
Absenteeism R/A/G
Target Actual Trend
5% 10%
Identify measurable inputs and targets which drive the Output metric performance (Input Metrics)STEP 3
1st Draft 3x3 created based on SME recommendations.
Note that data will be collected for all potential inputs to validate correlation between inputs and outputs
Average
Experience of
Agents (Months)
R/A/G
Target Actual Trend
4 mths 5 mths
47Copyright © 2009 Accenture All Rights Reserved.
OE Method 3 – 3x3 Thinking
Validate and Calibrate Input Metrics – Are we measuring the right things and reacting at the right time?STEP 4
Mike has been using his 3x3 for a few months now. If Mike has selected the correct Input
metrics with the correct targets there should be a correlation between Inputs and Outputs
Mike Brown
Cycletime (Days) R/A/G
Target Actual Trend
<3 Days 2.51
% Errors on
Output UnitsR/A/G
Target Actual Trend
<0.5% 0.5%
Productivity:
Volume per day /
#FTE’s
R/A/G
Target Actual Trend
>35 25
VoC Output Metrics Input Metrics
Volumes (Daily) R/A/G
Target Actual Trend
<3750 3200
Average
Experience of
Agents (Months)
R/A/G
Target Actual Trend
4 mths 5 mths
% Invoices with
ExceptionsR/A/G
Target Actual Trend
<25% 23%
% Validation
ErrorsR/A/G
Target Actual Trend
<0.2% 0.2%
Average
Experience of
Agents (Months)
R/A/G
Target Actual Trend
4 mths 5 mths
% Non PO
MatchesR/A/G
Target Actual Trend
<5% 8%
Total Headcount R/A/G
Target Actual Trend
<120 150
Absenteeism R/A/G
Target Actual Trend
5% 10%
Average
Experience of
Agents (Months)
R/A/G
Target Actual Trend
4 mths 5 mths
UK Bank: We want to have all
invoices processed
within 3 Days
UK Bank: We expect < 0.5% of invoices to have
errors
BPO: We should be processing 35
invoices per person per day
48Copyright © 2009 Accenture All Rights Reserved.
OE Method 3 – 3x3 Thinking
Validate and Calibrate Input Metrics – Are we measuring the right things and reacting at the right time?STEP 4
Understanding Correlation
Ou
tpu
t
Input
By plotting input Performance against Output performance you can get an initial feel for the
correlation between an Input and the Output you are trying to drive.
Ou
tpu
t
Input
Ou
tpu
t
Input
Example
A
Example
B
Example
C
Positive Correlation
As the input value increases so does the Output value
Negative Correlation
As the input value decreases the Output value Increases
No Correlation
Changes in the input value seem to have no impact on
the Output value – Probably not a critical input
49Copyright © 2009 Accenture All Rights Reserved.
OE Method 3 – 3x3 Thinking
Validate and Calibrate Input Metrics – Are we measuring the right things and reacting at the right time?STEP 4
Lets focus on Productivity and look at the data for ALL the identified inputs:
Understanding Correlation
Productivity
Volume per day / #FTE’s
Average Experience of
Agents (Months)
Total Headcount
% Non PO Matches
% Invoices with
ExceptionsAbsenteeism
Pro
du
cti
vit
y
Average Experience
Mike has created scatter plots of Input Performance against Productivity
Pro
du
cti
vit
y
Number FTE’s
Pro
du
cti
vit
y
% Non PO
Matches
Pro
du
cti
vit
y
% Absenteeism
Pro
du
cti
vit
y
% Invoices With
Exceptions
What does the data tell us? – Which Inputs would you suggest Mike puts in the 3x3?
Currently in 3x3
Currently in 3x3
Currently in 3x3
50Copyright © 2009 Accenture All Rights Reserved.
OE Method 3 – 3x3 Thinking
Validate and Calibrate Input Metrics – Are we measuring the right things and reacting at the right time?STEP 4
Setting Targets
Ou
tpu
t
Input
In addition to Subject Matter input recommendation, Scatter plots can also be used to assess
suitable targets. Note that targets should be continuously validated to ensure their suitability
Target Output Performance
Approximate Relationship between
Input and Output
(Line of best fit)
Established Target Input Performance
51Copyright © 2009 Accenture All Rights Reserved.
OE Method 3 – 3x3 Thinking
Validate and Calibrate Input Metrics – Are we measuring the right things and reacting at the right time?STEP 4
Cycletime (Days) R/A/G
Target Actual Trend
<3 Days 3.2
% Errors on
Output UnitsR/A/G
Target Actual Trend
<0.5% 0.5%
Productivity:
Volume per day /
#FTE’s
R/A/G
Target Actual Trend
>35 25
VoC Output Metrics Input Metrics
Volumes (Daily) R/A/G
Target Actual Trend
<3750 3200
Average
Experience of
Agents (Months)
R/A/G
Target Actual Trend
4 mths 5 mths
% Invoices with
ExceptionsR/A/G
Target Actual Trend
<25% 24%
% Internal Quality
ErrorsR/A/G
Target Actual Trend
<0.2% 0.2%
Average
Experience of
Agents (Months)
R/A/G
Target Actual Trend
4 mths 5 mths
Average
Experience of
Agents (Months)
R/A/G
Target Actual Trend
4 mths 5 mths
% Non PO
MatchesR/A/G
Target Actual Trend
<5% 8%
% Invoices with
ExceptionsR/A/G
Target Actual Trend
<25% 24%
% of Non-PO
MatchesR/A/G
Target Actual Trend
5% 8%
UK Bank: We want to have all
invoices processed
within 3 Days
UK Bank: We expect < 0.5% of invoices to have
errors
BPO: We should be processing 35
invoices per person per day
52Copyright © 2009 Accenture All Rights Reserved.
Building a Meaningful 3x3
Data Collection
Data Collection Plan
Collection
Data Source(s) Sample Size Frequency Responsibility Process Data Quality
Control
Collection Form
Mike is going to be making business decisions based on the metrics within the 3x3. It is critical
that Mike is therefore reacting to real changes in the data and not shifts in the way the data is
collected or data errors. A data collection plan for the key metrics will provide consistency.
Data sources
can be
extracts from
source
systems
such as
SAP, existing
reports, or
manually
collected
data
How many
data points
need to be
collected?
How often
will data be
collected?
Who should
be collecting
data?
What is the exact process for
collecting data (What point in the
process, method used etc)
How do we
know the
data is
accurately
reflecting
the real
situation?
How has
the data
been
validated?
TBC
53Copyright © 2009 Accenture All Rights Reserved.
Building a Meaningful 3x3
Understand what the Customer Wants
(VoC)
Identify a measurable way of tracking delivery
the VoC (Output Metric)
Identify measurable inputs and targets
which drive the Output metric performance
(Input Metrics)
Validate and Calibrate Input Metrics – Are we
measuring the right things and reacting at
the right time?
STEP 1
STEP 2
STEP 4
STEP 3
Data Collection
Building an effective 3x3 scorecard is an iterative process
The 3x3 should be assessed on an
ongoing basis to ensure we are
measuring the correct input and output
metrics, and that the targets are set at
the right level.
54Copyright © 2009 Accenture All Rights Reserved.
OE Method 3 – 3x3 Summary
What has producing the 3x3 enabled Mike to Realize?
• Mike and his team are turning their process knowledge into something that helps
them really manage the operation by using the Leading Metrics to predict process
performance for the customer
• Mike is now focused only on the key operational levers and as such has
improved decision making and prioritization
• Mike is focused on what is really important for driving the operation to meet true
customer outputs, rather than trying to manage to a complex SLA sheet
What are the customer’s service expectations in terms of Delivery, Quality and Cost and how are is performance against these expectations measured (both SLA and non-SLA)?
What do you measure today to proactively ensure you deliver to customer expectations
4.
5.
55Copyright © 2009 Accenture All Rights Reserved.
Breakout Activity (45 min):
Module 1 – Focus
Breakout Activity
In the next 45 minutes, work with your team to complete the activity below. Please use flip
charts to capture your work and be ready to report out to the group
• Using your SIPOC and HLP as input discuss and complete a 3x3 scorecard for the CSD team
• What is the difference between leading and lagging metrics in the 3x3, and how should Mikes Team use
these metrics?
• What do you recommend Mike and his team does to better manage the clients expectations?
56Copyright © 2009 Accenture All Rights Reserved.
What you need to know to be a
Standardized Service Operation
How do you know if the outcomes delivered to customer are consistently meeting their service expectations today and will continue to do so in the future?
Who are your customers and what are the outcomes that are delivered to them?
What are the customer’s service expectations in terms of Delivery, Quality and Cost and how are is performance against these expectations measured (both SLA and non-SLA)?
What do you measure today to proactively ensure you deliver to customer expectations
What are the main activities performed end to end to deliver expected outcomes to the customer and what are the critical inputs that have the largest impact on these outcomes?
Which operations activities are clearly tied to delivering the contractually agreed outcomes?
1.
4.
5.
2.
3.
6.
57Copyright © 2009 Accenture All Rights Reserved.
OE Method 4 – Control Charts
What Does the Tool Deliver?
How do we get understanding the ongoing performance of key metrics
• Separates problems with process execution (people) from problems
with process design (process)
• Offers early warning signs before problems occur and Pre-defines
action plans around process signals
• Prevents over-adjustment (often called “tampering”) of a process
operating within normal parameters - which leads to additional
problems.
• Supports a stable operation that will result in predictable results
• Providing data vs. anecdotal feedback
Control Charts
What tool is available to help?
58Copyright © 2009 Accenture All Rights Reserved.© 2008 Accenture All Rights Reserved.
Performance Measurement:
Three – Understand Service Capability
OE Method 4 – Control Charts
Cycletime (Days) R/A/G
Target Actual Trend
3 Days 2.95
Mike uses the 3x3 to manage process performance. His trend arrow is based on a
comparison to the previous months data point.
Mike Brown
The Importance of plotting data over time to identify trends
Mike takes no action, the
cycletime is within target and has
improved since the previous
period.
59Copyright © 2009 Accenture All Rights Reserved.© 2008 Accenture All Rights Reserved.
Performance Measurement:
Three – Understand Service Capability
OE Method 4 – Control Charts
Cycletime (Days) R/A/G
Target Actual Trend
3 Days 2.95
Mike uses the 3x3 to manage process performance. His trend arrow is based on a
comparison to the previous months data point.
Mike Brown
The Importance of plotting data over time to identify trends
Mike takes no action, the
cycletime is within target and has
improved since the previous
period.
Now lets look at the
same data plotted as a
run chart
Cycletime (Days)
2.2
2.3
2.4
2.5
2.6
2.7
2.8
2.9
3
3.1
Week
-10
Week
-9
Week
-8
Week
-7
Week
-6
Week
-5
Week
-4
Week
-3
Week
-2
Week
-1
Today
Target
Actual
Now do we think Mike should be taking
some action?Is Mikes 3x3 showing
a true trend?
60Copyright © 2009 Accenture All Rights Reserved.© 2008 Accenture All Rights Reserved.
Performance Measurement:
Three – Understand Service Capability
OE Method 4 – Control Charts
Understanding Variation and Stability
Does it take you exactly the same time to get to work each day?
• Why not? Minor changes in the process cause ‘common cause variation’ and impact
the journey time – (e.g. Traffic Lights on Red, changes in traffic level etc)
• Some processes will have less variation than others – walking a short distance to the
office, or those using Japanese public transport will have more predictable
performance.
Now – has it ever taken you a huge amount of time to get into work?
• Why? Car broken down? Heavy Snow? Accident on the road? This significant change
in process performance is know as ‘special cause variation’
• It is clearly hard to predict the performance of processes with a lot of Special Cause
Variation – as such they are known as unstable.
• Control Limits on a run chart help to identify Special Cause Variation, so that the root
cause can be identified and improvements can be made.
61Copyright © 2009 Accenture All Rights Reserved.© 2008 Accenture All Rights Reserved.
Performance Measurement:
Three – Understand Service Capability
OE Method 4 – Control Charts
Now lets look at Mike’s real data with Control Limits – Is this process Stable?
Mike Brown
Using control charts to identify common cause and special cause variation and determine
whether a process is stable
The graph now has
Upper and Lower
Control Limits.
There are a variety of
statistical tools that will
calculate these
accurately based on
your data, however a
typical approximation is
to set these at + and – 3
Standard Deviations for
the data collected
Datapoints falling
outside these limits
indicate Special Cause
variation
Mikes Process is not Stable – What is mikes next step?
62Copyright © 2009 Accenture All Rights Reserved.
Performance Measurement:
Three – Understand Service Capability
OE Method 4 – Control Charts
Special
Cause
Variation
Study
individual
points or
specific
clusters of
points to
determine
reason for
outlier
Make
Changes
To Sustain
Or Prevent
Special
Causes In
The Future
Expected
Result
Expected
Result
Study all
the data –
that would
be a waste
of time
Make
fundamental
changes
to the
process until
the true
cause of
variation is
know
Unexpected
Results
Don’tDoLooks LikeType
Common
Cause
Variation
Study all
data
points
collectively
to better
understand
sources of
variation
Make Basic
Process
Change To
Reduce
Common
Cause
Variation,
Shift The
Average, Or
Both
Look for
differences
between
individual
points
React to
individual
data points
because
that
wouldn’t
impact
future data
points
Unexpected
Results
Mike should focus on understanding the reasons for special cause and implement controls to either sustain or prevent the special cause event
63Copyright © 2009 Accenture All Rights Reserved.© 2008 Accenture All Rights Reserved.
Performance Measurement:
Three – Understand Service Capability
OE Method 4 – Control Charts
Understanding Capability
Cycletime (Days)
2.2
2.3
2.4
2.5
2.6
2.7
2.8
2.9
3
3.1
Week
-10
Week
-9
Week
-8
Week
-7
Week
-6
Week
-5
Week
-4
Week
-3
Week
-2
Week
-1
Today
Target
ActualLooking at this data,
is the process capable?
Capability simply refers to whether a process will predictably perform within the set target
The answer is that we don’t have enough information plotted yet....
Yes the data is currently within the target, but we need control limits to ensure the performance is predictable and without variation that could lead to exceeding the
target.
64Copyright © 2009 Accenture All Rights Reserved.© 2008 Accenture All Rights Reserved.
Performance Measurement:
Three – Understand Service Capability
OE Method 4 – Control Charts
We can determine whether a process is capable by comparing the process control limits with target performance levels
Cycle Time
Mean -
2.5 Days
Target
< 3 Days
0.0
1.0
2.0
3.0
4.0
5.0
1-J
an
15-J
an
29-J
an
12-F
eb
26-F
eb
11-M
ar
25-M
ar
8-A
pr
22-A
pr
6-M
ay
20-M
ay
3-J
un
17-J
un
Days
Cycle time Mean Target
Now lets look at Mike’s real Cycle time data – Is this process Capable?
Mike Brown
Remember Clients do not feel Averages. On average you can be inside the target, but half of all units can fall outside the
clients requirements. Clients feel the variation
UCL
LCL
A process is capable where the Control Limits fall within the Target.
WHY? Because the control limits indicate the normal operating parameters of the process. If these exceed the
target then the target can be missed despite the process running as expected. IT IS NOT CAPABLE OF
MEETING TARGET
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OE Method 4 – Control Charts
Recap of key factors to identify within a Control Chart
Time
Data
Capability
Is the process able to
consistently meet the
target?
Measure: Control Limits
within the Target
Stability
Is the process
predictable (i.e. No
Special Cause
Variation)
Measure: Data within
Control Limits
Normal Variation
The fluctuations in
performance over time
that are small and occur
due to natural shifts in
the process (Data within
the Control Limits)
Special Cause
Variation
Large Fluctuations in
data caused by a
specific issue that
needs to be investigated
– Leads to
unpredictable
performance
(Data Outside Control
Limits)
STABILITY vs. CAPABILITY
What is the difference? Stability is an indication of the variation and predictability of a process. It is
independent of the performance target. Capability links the process performance back to the target
and asks if the target can be met over the long term. Stability and Capability are independent
factors, although it is hard to be Capable if you are not stable.
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Reacting to Control Chart Signals
Process
Stable?
Now
Predictable
Stable, Predictable
Process
Capable?
Find & Fix Special Cause(s)
CapableNot Capable
Unstable, Unpredictable
Interpret Control Chart
Probability of not meeting SLA Will meet SLA!
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What have control charts enabled Mike to Realize?
How do you know if the outcomes delivered to customer are consistently meeting their service expectations today and will continue to do so in the future?6.
OE Method 2.6 – Summary
• The team is now able to see data trended over time for key operational metrics
rather than just a single data point
• The team understand the difference between common cause variation verses
special cause variation, so they now know how and when to react using data
• Now that the team have defined targets with upper and lower control limits
defined they are able to determine whether their process is stable and capable
68Copyright © 2009 Accenture All Rights Reserved.
Breakout Activity (30 min):
Module 1 – Focus
Breakout Activity
In the next 30 minutes, work with your team to complete the activity below and be ready to
report out to the group
• Using the Data Provided and the Control Chart Basic Template, Plot the Data Mike has
for SPEED, COST and QUALITY
• Analyze your Control Charts:– Is the Process Stable
– Is the Process Capable
– What Action should Mike Take?
• Targets: – Productivity – 32 Unitis Per Day
– Cycletime – 3 Days
– Quality – 0.5% Error Rate
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• Teams understand who their customer is and what outcomes are delivered to the
customer
• Teams understand the customers service expectations in terms of Delivery, Quality and
Cost, and have metrics in place to measure performance against these expectations
• Key service metrics are measured and reported internally on a daily basis, rather than
averaged over the month to ensure service variation is understood by the team
• Teams are able to clearly articulate the end to end activities that deliver outcomes to the
customer, and are clear on both their role, and the role of others in the team
• Teams understand which operational inputs have the largest impact on service
performance, and hence should be managed more closely
Now that Mike’s team is focused they are able to understand how they are performing against customer expectations and they understand the critical inputs that drive this
How is Mike’s team now operating?
Benefits – Focus the Service Operation
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Benefits – Focus the Service Operation
Measurable Impact to Mike’s Team now they are Focused
Target 0.5%
Comments:
• The team now have control charts that show performance on key
output metrics over the past 12 mths against targets
•The data shows that while the average performance for cycle time
and quality is below the SLA target their has been a large amount of
variation in performance from day to day which is inline with
observations made by the customer
•The team is well below the target productivity of 35 invoices/FTE/day
which is required to get the team within ODE
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Who are your customers and what are the outcomes that are delivered to them?
Which operations activities are clearly tied to delivering the contractually agreed outcomes?
What are the main activities performed end to end to deliver expected outcomes to the customer and what are the critical inputs that have the largest impact on these outcomes?
3.
What are the customer’s service expectations in terms of Delivery, Quality and Cost and how are is performance against these expectations measured (both SLA and non-SLA)?
What do you measure today to proactively ensure you deliver to customer expectations
4.
5.
How do you know if the outcomes delivered to customer are consistently meeting their service expectations today and will continue to do so in the future?
3x3
6.
Summary – Review of Critical Questions
SIPOC
High Level Process Flow
Control Charts
1.
2.
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Module 2
Control PlanDetails Process Flow Standard Work Instructions MOS
Identify the key process inputs or outputs to control
Identify an appropriate control subject
List the key process inputs to control to meet output
requirements
Identify responsibility, frequency, sample size,
spec. limits/requirements, and define the Response
Plan
STEP 1
STEP 2
STEP 5
STEP 3
List the key process outputs that to monitor for signals requiring attention
Identify participant functional groups in the process
STEP 1
Walk the process with the subject matter experts
STEP 3
Identify the trigger which initiates the start of the
process
STEP 2
Identify decision points and response plans
STEP 4
Ask the 5 Why's to uncover the hidden factory (process steps we don’t acknowledge
or document)
STEP 5
Define the document function, relevant location,
version and owner
STEP 1
Insert a screen shot of the Detailed Process Map
STEP 2
Insert detailed process requirements like target time
per step and process controls
STEP 3
Include reference documents, customer
requirements and process output requirements.
STEP 4
Determine which functions need to be managed based on metrics identified in the
3x3.
STEP 1
Identify stakeholders and information needs.
STEP 2
Determine accountability for data gathering and
information reporting.
STEP 3
STEP 4
Determine decisions to be made and when or how response or escalation
plans are executed
STEP 5
Determine frequency and type of forum.
STEP 4
Focused operation
Understand what your
customer wants
OE Methods:
• 3x3 Scorecard
• SIPOC
• High Level Process Flow
• Control Charts
Standardized operation
Define what the process is and
how to perform it consistently
OE Methods:
• Detailed Process Flow
• Standard Work Instructions
• Control Plan and MOS
Planned operation
Balance workload by matching
available capacity to demand
OE Methods:•Volume, Productivity, and
Capacity metrics
•Resources Planning Tool
•Cross Training Skills Matrix
Stable Capable OptimizedMaturity categories
• Team understands who there customer is
and the expected outcomes delivered that
are part of the contract scope
• Client success measures in place (3x3’s)
and control charts used to validate stable
performance for at least 6 mths
• Team can articulate the main activities
performed end to end that deliver expected
outcomes to the customer
• Teams use Detailed Process Flows and
SWI’s to ensure work activities are
understood and performed consistently
• Teams use effective MOS and control plan
to manage inputs and monitor outputs
• Teams use issue / risk management and
escalation process as part of their MOS
• Teams understand the volume of work that
is expected to be done and the number of
resources required to complete that work
• Teams use inflow, outflow, and backlog as
key leading metrics to understand when and
how to proactively react to capacity issues
• Teams have clear Productivity and Capacity
Utilization targets to meet both service and
cost objectives
• Teams are able to predict there ability to
meet service expectations using control
charts and understand variation in
customer experience by measuring daily
rather than average performance
• Causal relationships between operational
inputs and outputs are actively managed
and validated with data
• Team is operating at ODE and consistently
meeting service expectations
• Teams use defined standard processing
times that are linked to performance
expectations that are measured and
reported
• Operational reviews at all levels (Process /
Deal / MOR) are done through effective
use of data and a common set of
leading/lagging metrics
• There is clear linkage between leading
metric targets and the control plan
• Load balancing is used to manage daily
work activities and handle variation in
volume without the need for increased
headcount or additional overtime
• Teams use data to understand the
relationship between resources capacity
and service levels
• Capacity is measured across all teams to
understand how and when to flex capacity
• Teams are delivering optimal performance
through consistently meeting performance
objectives and delivering within the scope
of the contract (not over delivering)
• Teams understand which levers to pull as
they spot variation in performance and act
even though SLA’s are green
• Team has been operating at or below ODE
for > 6mths and have continued to
demonstrate year on year productivity
improvements
• Teams measure agent level productivity
and capacity and have demonstrated
improvements by reducing standard
processing times
• Improvements are sustained by keeping
SWI’s and process documentation up to
date with the latest improvements
• Improvement targets are successfully
achieved and validated with data as part of
operational reviews at all levels
• Teams use data to illustrate that the deal
is running at optimal capacity to meet
service expectations
• Teams are staffed below ODE to handle
average volumes and manage volume
fluctuations through flexing capacity of
cross trained resources across both teams
and deals
SDO Maturity Framework
NOTE – If team does not meet minimum requirements for STABLE then rate as UNDER REVIEW
Stable Capable OptimizedMaturity categories
• Teams segment transaction types to better
understand processing volumes and
variation in processing times
• Office appears well organized with no sign
of clutter on desks or in the work space
• Teams understand where things are, and
what is needed to complete their work
effectively
• Performance data is clearly displayed over
time using control charts to identify and
react to trends and understand performance
against service expectations
• Visual displays are used as and integral part
of daily huddles and MOS allowing all
resources to know how the team is
performing on work allocation and key
leading metrics for the day
• The end to end process is clearly displayed
in a central location for the teams to use,
along with SWI’s at each agents desk
• Teams know the current baseline
performance of the process and have
targets in place to improve performance
• Teams have the ability to identify root cause
and take corrective actions to address
issues
• Teams understand the work breakdown and
are increasing total available processing
time to drive improved productivity
• Resources are aligned to workflow based
on volume and variability of transactions to
improve efficiency (eg. product families)
• Teams are able to demonstrate how their
office layout is organized around the
process to improve efficiency
• Teams are consistently practicing 5 S as a
means to drive an organized office
• Teams use visual controls to trigger when
to proactively react to avoid potential
service and/or capacity issues
• Process & leadership teams are able to
gauge the health of the process through
the visual representation seen when
walking the floor
• Teams measure Rolled Throughput Yield
and use this as a means to identify and
implement improvement opportunities
• Teams understand and use the 7 forms of
waste as a tool to identify and implement
improvement opportunities
• Teams have a mechanism to identify and
prioritize improvement opportunities as
part of their MOS
• Teams are able to demonstrate with data
how aligning resources to workflow has
improved productivity
• Teams are able to demonstrate with data
how application of 5S has resulted in
improved business performance
• Improvement actions result in improved
performance as seen on the teams visual
display of performance
• Teams have demonstrated continued
improvement in performance driven
through visual displays of rewards and
recognition and improved performance on
the floor
• Teams use data to validate improvements
in the Rolled Throughput Yield and how
this relates to cost
• Teams validate that improvements are
both achieved and sustained using data as
part of their Visual Management and MOS
NOTE – If team does not meet minimum requirements for STABLE then rate as UNDER REVIEW
Organized operation
Organize teams around the
process
OE Methods:
Resource & Workflow
Alignment
Office Layout, 5S
Visual operation
Visual information displayed to
manage performance
OE Methods:
• Visual Controls
• VM / MOS integration
• Visual Management Plan
Improving operation
How to continually improve
performance
OE Methods:• Rolled Throughput Yield
• Fishbone Diagram / 5 Whys
• Work Breakdown Analysis
• 7 Forms Waste
SDO Maturity Framework