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Improving Business Efficiency with Robotic Process Automation

Gerald Taylor MBA

What I hope to achieve in this article is to get you to consider one very important question, “Is your organization truly getting the most productive use of its employee’s time and talent?”  If I can get you to think in that direction or ponder this notion, then this article has achieved its objective.

This article features how you can improve business efficiency and scale for growth with a relatively new technology called Robotic Process Automation (RPA).  In it, I will describe what RPA is and provide an example so you can leave with a good understanding of how the tech works.  I will also demonstrate how RPA is combined with lean management to eliminate waste and re-engineer a more cost effective and productive future state. Finally, I will illustrate method you can use evaluate its potential in your organization.

What is Robotic Process Automation (RPA)?

Robotic Process Automation is an inexpensive software-based technology.  The programmed bots in RPA work on the desk top by interacting with your applications and technology platforms performing human tasks at a rate 10 – 15 times faster than a person. RPA performs such tasks as re-keying data, logging into applications, moving files and folders, copying and pasting and much more!  RPA bots are capable of performing most human-computer interactions to carry out an extra-ordinary number of error-free tasks. In fact, if you have employees serving as a quick fix to interoperability; meaning they are taking data from an old legacy system and inputting it in to a CRM like Sales Force or taking data from a main frame and inputting it into another application, RPA is perfect for these activities….and it does so with zero errors or zero defects!  Both public and private sector organizations find value in RPA as a solution for streamlining and automating repetitive, low added value work. It is also a very attractive alternative to lengthy system overhauls and transformations. But..whereas a picture is worth a thousand words, I believe a quick 2 minute media example can better explain what RPA is and its usefulness. 

Growth in Process Automation

According to our research group, TPMG Analytics, growth in interest of RPA has been extraordinary. Since 2017, interest in RPA has grown at a average weekly rate of 27%.  RPA is the first step into an emerging industry of artificial intelligence and machine learning and is expected to grow at a compounded annual growth rate of 36% over the next 3 years. 

Humans working side by side with robots is no longer something of science-fiction. Before we know it, RPA will be to routine administrative tasks what robots are now in high tech manufacturing. Automation algorithms can now be designed to ruthlessly satisfy larger and larger ranges of tasks and the unbiased decision making of machine learning represents a competitive advantage over human operators. Over the next 5 to 10 years productivity will be explosive, and people will be freed to work solely on higher priority, value generating tasks. According to a recent Oxford University Study, The Future of Employment, over this decade, 47 percent of total US employment will likely be automated or digitized.

Is RPA a Good Fit for Your Organization? 

The cost of sub-optimized workers imprisoned in low-value added tasks has been estimated at 30% percent of operating cost.  It is a hidden cost.  RPA is well suited for high volume processes with the potential for high human error rates and where human beings are subject to the law of diminishing marginal returns.  The fact that one minute of work from RPA translates into15 minutes of human activity means employees can be released from the “prison of the mundane” to work on higher priority tasks.

Tremendous success stories are common with the technology. RPA enhanced a banks ATM dispute resolution by reducing the turnaround time from 48 hours to 2 hours. An insurance company was able to reduce its document processing time from 16 minutes to three…while improving overall productivity of processing by 87.5%.  A leading healthcare system was able to reduce its resource cost by 50% while at the same time improving its quick verification response time by more than 70%. And a financial tech company was able to reduce its data inspection and verification time by more than 83% while being able to redeploy 57% of their complement to open job requisitions and higher priority tasks. The healthcare industry is showing incredible potential for automation. Let me re-iterate, these types of success stories are common with the technology. Which leads us to our final question.

How do I now if RPA is a good fit for my organization? This is where the practice of lean management and process engineering comes into the picture. Your first step is to identify the process you believe to be a candidate for automation.  Your next step is to conduct a waste walk; a direct observation of the work as it is done along with a series of individual interviews to construct a straw model of the process.  After creating the straw model, you want to conduct a red flag analysis to identify inherent weaknesses that create a drag on productivity.  You will find repeating quality and accuracy checks, manual tasks ripe for automation, duplication of effort, collection of non relevant data, and blatant mismatches between job need and employee skill. Afterwards, you want to capture and record legitimate opportunities to automate in time and motion studies via Zoom or WebEx.  It is a very simple activity where you can calculate minutes per task, cost per minute, cost per task and multiply the result by the volume of work to generate a cost benefit analysis  Reviewing the related financial models should provide you with a proof positive or negative picture of an automation impact.

Performing a Cost/Benefit Analysis

What is your Improvement Priority?

Is your organization truly getting the most productive use of its employee’s time and talent? In which one of these areas are you personally convinced there is room for improvement in your company: scaling for growth, productivity improvement, cost effectiveness, or velocity? If you are curious, TPMG OpEx can not only help you answer this question, but can also shepard you through a no risk/no cost discovery process. We can partner with you to identify a job function and set up a complimentary proof of concept RPA bot. As an outcome of the discovery process you can: 1. benefit from a free cost/benefit analysis, 2. experience the value of RPA in your operation, and 3. discover if RPA is a good fit for your organization.

Contact us today! TPMG OpEx – Operational Excellence

Gerald Taylor, MBA is the Managing Director of TPMG Consulting and a Lean Six Sigma Master Black Belt

Edward Jones Adds Robotic Process Automation with Lean Six Sigma

By Brooke Holmes

Automation 1.0

Robotic process automation (RPA), commonly referred to as “bots,” is a type of software that can mimic human interactions across multiple systems to bridge gaps in processes that previously had to be handled manually. RPA software applications can be integrated with other advanced technologies such as machine learning or artificial intelligence. But at the most basic level, they act like super-macros following a detailed script to complete standardized tasks that do not require the application of judgment.

Why Combine RPA and Lean Six Sigma?

Replacing manual work with bots removes the possibility of human error, reduces rework and quality checks, while also increasing accuracy. Bots can work much faster than humans and at any hour of the day so long as the underlying systems are operational. The potential to reduce overhead costs and increase process cycle time is vast. Bots also provide enhanced controls for risk avoidance.

Bots can serve as a foot in the door to gain traction for a quality program. Senior level executives get excited by the potential of this relatively affordable technology. By incorporating a thoughtful Lean Six Sigma (LSS) process review into a company’s bot deployment strategy, quality programs will gain additional visibility and leadership support.

Effective Bot Deployment at Edward Jones

Edward Jones is a financial services firm serving more than 7 million clients in the US and Canada. Their operations division began exploring RPA in 2017 and subsequently implemented their first bot into production in November 2018. Since then, they’ve deployed 17 additional bots, yielding 15 full-time employees in capacity savings, which in turn generated more than a million dollars in cost avoidance. While still at an early stage in this journey, the operations division has developed a structured approach using LSS tools to assess process readiness for automation, minimize or remove non-value-added work steps prior to development (abandonment), and redesign the process to fully leverage the benefits of RPA.

LSS Process Review

Using a questionnaire to begin their intake process, business areas submit critical data regarding process volumes, capacity needs, system utilization and risk level. This data feeds into a prioritization matrix that allows them to decide where to focus energy and time. Once a process is identified for RPA, a member of the quality team engages the business area for a LSS process review using familiar tools such as a project charter, stakeholder analysis, SIPOC (suppliers, input, process, outputs, customers) and process maps.

After thoroughly understanding the process’s current state, the practitioner and corresponding business area redesign the process for robotics. Next, they complete an FMEA (failure means and effect analysis) and business continuity plan to ensure process risk is being adequately controlled. After this LSS process review has concluded, a broad group of experts – including robotics developers, internal audit staff, risk leaders and senior leadership from all impacted business areas – are brought together to jointly review the robotics proposal and agree on a go/no-go decision.

A critical component of this process review is thorough documentation of every step along the way. Using an Excel playbook to organize all the tools in one place enables a smooth transition as the effort moves from the quality team to the robotics development team. Then, this comprehensive documentation is retained by the business area for ongoing maintenance. Specific elements of this documentation include a systems inventory, a record of all sign-off dates and approvals and a business continuity plan for disaster recovery. Having complete documentation enables the business areas to take a proactive approach when faced with upcoming system changes or unexpected work disruptions. It also equips business areas with any data points required for routine internal or external audits.

Deployment Pitfalls to Avoid

There are some specific areas of concern when it comes to RPA.

  • Communication: Provide clarity to business areas about what RPA can and cannot do, and what processes fit best with this technology. Without an accurate understanding of the capabilities of RPA, there will be an influx of unsuitable requests for this new technology and, as a result, many disappointed business areas and wasted effort spent putting together their business case. At Edward Jones, the most common misunderstanding was regarding the lack of reading ability for the specific RPA vendor being used. While the bots can recognize characters in static fields, they are not able to interpret characters in an unstructured context. This ruled out many initial RPA requests. Additionally, while comparing RPA to macros was initially an effective way to explain the technology to business leaders that were not knowledgeable about technology development, this comparison created an unfortunate misconception that coding and implementing bots was as fast and easy as creating a macro. Business areas were not expecting development time to take four to six months for what they perceived to be a simple request.
  • Change Management: Incorporate thoughtful change management throughout the deployment at all levels of the organization. Leveraging bots will take away manual tasks being completed by employees. Some employees may welcome the automation of monotonous tasks, but others may view this technology as a threat to job security. Supervisors will need to adapt and grow their skills to include oversight of the RPA technology. Strong people leaders often don’t have the same level of competency in the technical space, and they will need to quickly increase knowledge and skill to effectively manage their automated processes. Senior/C-suite leaders will need to consider the inherent risks associated with using RPA, the infrastructure and skills needed to support an RPA program, and how to obtain the needed resources and talent.
  • Human Resources: Bots may create job redundancy, creating the potential for job loss reassignment. Engage human resources early to navigate these situations.
  • Governance: Balance senior leader involvement so they feel comfortable with automation without extra levels of required approvals that slow the development process down.
  • Don’t Force a Problem to Fit the Solution: RPA is not the right solution for every bad process. In the early phase of bot deployment, it is easy to let excitement about the new technology lead to poor choices around when to apply RPA. This leads to disappointing results that could undermine the entire bot deployment. Identify clear criteria regarding when bots are an appropriate solution and use a disciplined approach to evaluate each new process improvement opportunity. Consider non-bot solutions before a final decision is reached.
  • Vendor Approvals: Any third-party vendors must permit bots to interface with their systems. Review vendor contracts or have new contracts signed to ensure bots are legally allowed to interact with vendor systems and web sites before beginning development.
  • Resource Constraints: Set clear expectations with business areas about the work involved and resources needed to design and implement an RPA solution. The quality team and technical developers do not have the knowledge required about the specific processing steps to complete this work without a subject-matter expert from the business area being heavily involved throughout the project life cycle.
  • Results: Heavy focus on capacity savings only tells part of the story. Identify other meaningful methods of communicating value from RPA implementation, such as risk reduction, faster cycle time, improved client experience or increased accuracy.

Case Study: Automating Retirement Disbursements to Charities

An example of an RPA implementation at Edward Jones involves the process of receiving, validating and executing on client requests to send monetary donations from qualified retirement accounts to charitable organizations. Prior to implementing the bot, the Qualified Charitable Distribution (QCD) process required 11 hours of manpower each day to get through the volume of donations – and the number of requests had been doubling each month.

The process had five to 10 errors monthly due to the manual data entry required, which in turn took one to three hours of leader or senior processor time to resolve. A bot was designed and implemented that would validate the original request (quality check) and then enter the appropriate data into a computer screen to issue the check to the selected charity.

Stakeholder Analysis and SIPOC

After the project charter was created and agreed upon by the project Champion and project team, a stakeholder analysis was conducted to identify any additional individuals or business areas that were upstream or downstream of the process or might be affected by a change to the process. These parties were consulted or communicated with throughout the effort to ensure process impacts were understood and considered as the automation opportunity was identified and designed.

Next, a SIPOC matrix was created to understand all the process inputs, including systems, data files and end users. Together, the stakeholder analysis and SIPOC are essential in ensuring all critical components of the process upstream and downstream are identified early in the automation effort so no processing gaps are created during RPA development.

SIPOC Analysis: SIPOC for the QCD Automation Project
Supplier Inputs Process Outputs Customer
Client, branch team Clilent instructions, intranet form message Branch team sends form message with client instructions for QCD Unexcuted client request in the retirement department queue Retirement support team
Retirement support team Form message, client account information, IRS rules, client request Retirement associate reviews client request for QCD to confirm eligibility Validated client request Retirement support team
Retirement support team Validated client request Issue check Executed request, issued check Client, branch team
Retirement support team Client request, issued check Close client request on system Completed client request for QCD Client, branch team

Current- and Future-State Process Maps

The next step was to create detailed current- and future-state process maps. The current-state process map must include enough detail to highlight all the data sources required by the process, and where that data must be entered to move the process forward. The future-state map must incorporate all of those critical points, while also accounting for the limitations of RPA technology (inability to “read”) and the advantages of RPA (directly ingesting data files, speed and accuracy).

For the QCD process, the client verification step needed to be handled differently for RPA than in the original process. Previously, an employee was comparing client names between the original client request and the account registration referenced in the request to ensure a match. Names can be difficult for RPA to match because the technology doesn’t understand common nicknames that might be used interchangeably with legal names. For example, “Bill” and “William” would flag as a mismatch by the robotic technology, while a human processor would recognize those as referring to the same individual. To avoid large numbers of false positives from the bot flagging mismatches caused by nicknames, an alternative form of identification matching was used, in this case a social security number.

In a typical Six Sigma effort, the goal is to achieve a more streamlined future-state process map with less processing steps and fewer decision points. One key difference between process maps for an RPA effort compared to a more typical Six Sigma improvement effort is that the future-state process maps may contain more, not fewer, steps and decision points. This is normal and shows that the automation capability is being fully utilized to provide a higher level of accuracy. Since the bot processes at a speed much faster than a human can achieve, these additional quality checks do not add to the overall process cycle time. Each decision point with RPA represents a quality assurance checkpoint, allowing for the final output to have higher accuracy than the original process achieved.

Figure 1: QCD Process – Before BPA

Figure 1: QCD Process – Before BPA

Figure 2: QCD Process – After RPA

Figure 2: QCD Process – After RPA

Risk Assessment

Once the future automated state has been identified, conduct a risk assessment to understand the risks associated with the current process and how the process risks may be affected by RPA. The largest risk associated with the QCD process was the manual nature of the process and likelihood of human error. This risk was eliminated by using bots.

However, automation adds different types of risks, including system failures and coding errors. By identifying potential risks and using control reports to quickly identify and remediate issues, these risks can be effectively managed.

Business Continuity Plan

The final element of the process review is a business continuity plan, specifically focused on failure of RPA to successfully perform the programmed tasks. Consideration should be given to a failure of the bot itself but also any underlying systems that the bot needs to interact with to obtain data or execute requests. Planning should include how to perform the work if the automation is not operational for a particular timespan as well as how to identify and resolve errors made by the bot if the programming becomes corrupted.

Through this planning exercise, a critical aspect of the QCD process was identified that may have led to future bot failure had it not been remedied. Volumes for this highly seasonal process rise drastically at year end, and a single bot was unlikely to keep up with the work at this peak. Programmers were able to proactively solve this issue by diverting process volume onto three separate bots to stay on top of the surge of work during these high-volume time periods.

Results

The QCD bot was implemented in September 2019 and immediately realized 11 hours of capacity savings with no errors. The total project cycle time from the initial continuous improvement analysis, through the bot design, development, testing and implementation took seven months. Since implementing RPA on this process, 100 percent of the process has been automated with zero errors. Process risk was reduced by one point on a 10-point scale by eliminating human error from manual work steps.

During routine follow-up six months after bot implementation, the project team learned that the benefits received from the automation had grown significantly. The volume of client requests for charitable distributions had increased rapidly, so the bot was now performing work that would have taken 34 hours – or five employees – to complete each day.

Conclusion

Don’t short cut the methodology when leveraging RPA and other new technologies. Technology masks a bad process, so clean up the underlying work steps first to maximize the benefit of RPA.

Learn about Robotic Process Automation (RPA) Webinar: What is RPA?

How Best Business Practices Can Improve Health Care

Clayton Christensen on Disrupting Health Care

by Deborah Blagg

An acclaimed author and expert on the development and commercialization of technological and business innovation, HBS professor Clayton Christensen has written a new book aimed at changing our national conversation about health care. In The Innovator’s Prescription: A Disruptive Solution for Health Care (read an excerpt), Christensen and his coauthors, the late Jerome Grossman and Jason Hwang (MBA ’06), focus not on how the United States will pay for health care in the coming decades, but rather on targeting innovations that will make health care both more affordable and more effective in the future.

Deborah Blagg: “Disruptive innovation” is a term you’ve used in your analyses of other industries, but what does it mean in the context of the health-care industry?

Clayton Christensen: People think they know what disruptive innovation means, but I’ve found it’s often misunderstood. The simplest way to describe it—in a way that applies to health care or any industry—is innovation that transforms a product or service that historically has been very complicated and expensive into something that is affordable and simple to use.

Q: In your book, you identify fee-for-service reimbursement as a “runaway reactor” in accelerating the rise in health-care costs. Why is this system such a problem?

A: By some estimates, 50 percent of all health care is driven by physician and hospital supply, not by patients’ needs. Today’s doctors work in a system where they are rewarded by Medicare and insurance companies for the number and cost of the services they provide rather than by the value of those services in helping patients. In short, medical professionals make money when their patients become sick.

Here’s one example of how the problem plays out in practice. In our research, we came across a book by George Halverson, the CEO of Kaiser Permanente. In making the argument for flat-fee reimbursement (which his company employs), Halverson notes that even though there is an affordable sealant that is almost 100 percent effective in protecting children’s teeth against decay, only about one-third of kids get it. By contrast, in the minority of dental plans that provide comprehensive care for a yearly fixed fee, nearly all children are treated with the sealant. Now why might this be? Because in the fixed-fee system, filling cavities is a cost, not a revenue opportunity. So the financial incentive supports preventive care.

Q: So a system where health providers offer comprehensive care for a fixed fee is the disruptive innovation that will bring down costs?

A: It’s a key component, but one reason why health-care reform is such a tough problem is that the challenges are complicated and interrelated. People who have studied this industry for a long time have come up with a number of feasible ideas to get at the cost problem, including high-deductible insurance and health savings accounts. But until we make sure that the treatments and services consumers are getting are effective and affordable, changing the way we consumers pay for the services doesn’t fix anything.

What we need is a system of new value networks that will disrupt the old business models in this industry. We need a new approach not just to insurance and reimbursement, but also to the places where medical services are delivered, the way we use technology, the way pharmaceuticals are developed, the way we educate medical professionals, and who performs what kinds of services. These things are all connected, and changing one piece, or plugging an isolated innovation into an existing framework, will not solve the larger problem.

 

Q: You mentioned that the places where health care is delivered are part of the outmoded business model. Could you elaborate?

A: You can’t make CT scans more affordable by changing the way big hospitals are run. But if you take procedures that once had to be performed at Mass General [Massachusetts General Hospital], for example, and you make them available at lower-cost, focused hospitals, that saves money. And as the technology evolves and becomes more portable, some procedures that took place in a focused hospital might move right into the doctor’s office or clinic. It’s by making lower-cost venues of care more capable that health care becomes affordable, not by expecting large hospitals to charge less.

Q: Could you give an example of a technological innovation that you think will have great impact?

A: The advantages of electronic medical records, which make patient information accessible and portable, have been talked about for a long time. One hurdle to progress on this relates, again, to the existing business model, which makes it difficult for information stored on one health-care provider’s software system to merge with information from other facilities. There’s a new disruptive technology in the works, personal electronic health records (PEHRs), an open-source tool that collects data from all providers and gives patients access over the Internet or by mobile phone.

It’s not hard to imagine how PEHRs can help us manage our own health care, but the technology is transformative in lots of unexpected ways. In some areas of sub-Saharan Africa, for example, PEHR technology in the hands of health-care workers has already helped reduce the transmission of mother-to-child HIV. For many pharmaceutical companies, complete and accurate patient data would help in screening participants in drug trials and make it possible to track and troubleshoot unexpected problems that show up after a drug is introduced into the general population, like what happened with Vioxx. The potential of this technology is far-reaching.

Q: Your prescription calls for widespread, coordinated change. Who is responsible for leading the way?

A: We hope policymakers in Washington will give our approach consideration, but to transform a complicated industry like this, you need buy-in from a broad range of people, including executives of provider organizations, as well as hospital, insurance, drug, retail, and medical device companies; deans of medical schools; and employers, who pay the bulk of health-care costs. All these parties interact in an interdependent way inside the current system and need to work together to bring about real change.

Q: Is this change happening, and if so, where are we on the transition timeline?

A: System problems require a systemic solution. You need what the great [HBS professor] Al Chandler called “the visible hand of managerial capitalism.” When this kind of change happened in personal computers, IBM weighed in and orchestrated the creation of a new business ecosystem.

That’s what we need in health care. Right now, only 5 percent of health care in America is provided by integrated institutions such as Kaiser, Intermountain, and Geisinger, but 95 percent of health care is still provided by disintegrated, specialized providers. And if those providers don’t start to integrate as competitors in the health-care market, they will be the losers.

 

Robotics Process Excellence

We have combined Lean Management, Process Re-engineering and Robotics Process Automation (RPA) into a powerful approach to eliminate waste, improve productivity, and reduce the cost of doing business.    Robotics Process Excellence (RPEx) services help organizations:

  • Ensure process performance exceeds business goals.
  • Measurably increase productivity by more than 25%.
  • Enhance the quality of customer care and ease of doing business.
  • Streamline processes and measurably reduce the cost of operating.
  • Eliminate slow, tedious, time consuming, wasteful tasks with Robotic Process Automation (RPA).

Lean management is a proven method for eliminating waste and the cost that comes with it.  RPA  is an inexpensive software-based technology. It sits on top of other applications, requires no special hardware, and works well in almost any IT environment.  That’s not all,  you also get highest level of enterprise grade security.

 


Our Approach

Through a simple seven step process, TPMG delivers a low-cost solution for process improvement along with a simple and inexpensive software-based technology. It sits on top of other applications, requires no special hardware, and works well in almost any IT environment.

RPA COE Process 4.0

 


Cafeteria of Process Excellence Consulting  Services

We view our process excellence services as the backbone of our business improvement practice.   Our consultants provide first hand knowledge of best practices and a deep understanding of high performance organizations.   We deliver top-quality  services that guarantee your organization become more productive, cost effective and customer driven.  Those services include:

  • Lean Management
  • Activity Based Costing
  • Non-Value Added Analysis
  • Business Process Re-engineering
  • Operational Assessment and Redesign
  • Value Stream Mapping and Improvement
  • Rapid Improvement Events (Kaizen)
  • Business Transformation
  • KPI’s and Metrics
  • Robotic Process Automation (RPA)

 

Project Description:  What is your process improvement?

 

Robotics Process Automation – Demo

Robotic Process Automation (RPA) is an affordable solution for organizations to streamline their operations and maximize efficiency. Robots used in RPA interact with applications to perform many mundane tasks such as re-keying data, logging into applications, moving files and folders, copying and pasting and much more. RPA is particularly suitable for processes with high human error rates. It’s an inexpensive software-based technology that sits on top of other applications. It requires no special hardware, and works well in almost any IT environment. That’s not all, you also get highest level of enterprise grade security.


Improving Productivity with RPA

We have combined  Lean Management, Process Re-engineering and Robotics Process Automation (RPA) into a powerful approach that eliminates waste, improves productivity, and reduces the cost of doing business.    Our Operational Excellence (OpEx) services help organizations:

  • Ensure process performance exceeds business goals.
  • Measurably increases productivity by more than 25%.
  • Streamline processes and measurably reduce the cost of operating.
  • Automate slow, tedious, time consuming, manual tasks.

 


Demo – Revenue Assurance

This demo explores how robotics process automation and artificial intelligence are continually redefining the future of work. One minute of work from RPA translates to 15 minutes of human activity. RPA also provides stakeholders with additional flexibility, enabling them to focus on more demanding and value added tasks.

 


Demo – Customer Account Details

Robotics Process  Automation is an affordable solution for organizations to tackle repetitive, low – value added work.  Robots used in RPA interact with applications mimicking human actions and can perform many mundane tasks such as re-keying data, logging into applications, moving files and folders, copying and pasting and much more.  RPA has been adopted in industries with intense, manual, and administrative processes, such as financial services, insurance and health care.   (The information in this demo has been blurred to preserve confidentiality)

 


 

Project Description:  What is your process automation project?

The Process Guy

Stream Lining Processes

I am the Process Guy.  For more than 15 years, I have used best practices like lean, six sigma, and process re-engineering to streamline processes.  To date, I have saved regional, national and global companies more than an estimated $100 million dollars.  The range of industries I have consulted in include financial services, healthcare, technology, supply chain, energy & utilities and telecom.

Cost Savings

In a recent consulting engagement, I used a combination of organizational re-design, process re-engineering and six sigma to generate an FTE savings of 57%.  This happened not only through the use of traditional streamlining methods, but also through the use of a new technology made available to the process man – Robotics Process Automation (RPA).  Robots used in RPA interact with applications to perform many mundane tasks such as re-keying data, logging into applications, moving files and folders, copying and pasting and much more.  It is a simple and inexpensive software-based technology that sits on top of other applications.  It requires no special hardware and works well in almost any IT environment.  That’s not all,  you also get highest level of enterprise grade security.

The Pitch

This may sound like an advertisement, and to an extent, this is true.  But this is more than an advertisement, this is a continual posting for those companies who seek a consultant who guarantees measurable improvements.

I have combined Lean Management, Process Re-engineering and Robotics Process Automation (RPA) into a powerful approach to eliminate waste, improve productivity, and reduce the cost of doing business.    The services I provide are guaranteed to ensure:

  • Measurable improvements in productivity by more than 25%.
  • Streamlined processes and measurable cost reductions of more than 27%.
  • A significant reduction and elimination of slow, tedious, time consuming, and wasteful tasks.

If you are a Chief Financial Officer, VP of Operations, General Manager or merely a responsible leader who wants to improve your company’s return on capital invested – contact me today!

Like I said, my services are guaranteed.  Ask me about that!

You can reach me at:  The Process Guy Email

I look forward to hearing from you!

 

 

Developing Key Performance Indicators

Key performance indicators (KPIs) are critical to ensuring a project team has the performance data it needs to sustain improvements. With KPIs, a team can evaluate the success of a project against its established goals.

Types of Metrics

There are two types of metrics to consider when selecting KPIs for a project: outcome metrics and process metrics.

Outcome metrics provide insight into the output, or end result, of a process. Outcome metrics typically have an associated data-lag due to time passing before the outcome of a process is known. The primary outcome metric for a project is typically identified by project teams early on in their project work. This metric for most projects can be found by answering the question, “What are you trying to accomplish?”

Process metrics provide feedback on the performance of elements of the process as it happens. It is common for process metrics to focus on the identified drivers of process performance. Process metrics can provide a preview of process performance for project teams and allow them to work proactively to address performance concerns.

Example of Selected KPIs

Consider an example of KPIs for a healthcare-focused improvement project:

  • Project: optimizing hospital patient length of stay
  • Outcome metric: hospital patient length of stay (days)
  • Process metrics: discharge time of day (hh:mm); time discharge orders signed (hh:mm); time patient education completed (hh:mm); discussion of patient at daily discharge huddle (percentage of patients)

In the example above the project has one primary outcome metric and four process metrics that compose the KPIs the team is monitoring. Well-crafted improvement project KPIs will include both outcome metrics and process metrics. Having a mix of both provides the balance of information that the team needs to successfully monitor performance and progress towards goals.

Teams should develop no more than three to six KPIs for a project. Moving beyond six metrics can dilute the effects of the data and make it more challenging to effectively communicate the progress of a project.

Questions to Help Select KPIs

Common questions coaches can use with teams to generate conversation about potential KPIs include:

  • What does success look like?
  • How will it be known if performance is trending away from goals?
  • What data would the stakeholders and sponsors be most interested in?
  • What data is available to the team?

The 3Ms: Meaningful, Measurable and Manageable

Coaches should keep the three Ms of crafting KPIs in mind when working with teams.

  1. Meaningful: KPIs should be meaningful to project stakeholders. Developing metrics that those closest to the project team find useful without getting feedback from a broader group of stakeholders can be a recipe for stakeholder disengagement. The KPIs a team selects need to resonate with the stakeholders closest to the process and the problem. The team will know it is on the right track when it has KPIs that stakeholders want to know the current status of and are discussing progress toward the project goals with their colleagues. Meaningful KPIs make excellent additions to departmental data walls for use in daily huddles and to support the efforts of leaders to get out on the floor and speak directly with employees. leader rounding.
  2. Measurable: KPIs should be easily measurable. Sometimes teams can get stuck trying to identify the “perfect” metric for measuring progress toward their project goals. In this pursuit, the team may lose sight of metric options that are already available or automatically reported. Sustainable KPIs should be relatively easy to obtain updates for. If a metric requires time-consuming auditing, or is not readily available to the project team, groups should think twice before selecting it as a KPI. Data that is challenging or time-consuming to obtain is not likely to be regularly updated and reported to stakeholders. Providing timely and accurate updates on KPI performance is an excellent way to support the sustainability of improvements and spark conversations about additional opportunities to enhance processes and reach the team’s goals.
  3. Manageable: KPIs should include metrics that are within the sphere of management control and influence for the project team. If the team selects metrics that include measuring process elements that the team has no control over, then they are not going to be measuring what matters. Teams should select KPIs that are within the scope of their project, are reflective of a successful outcome and are performance drivers for their work. Sometimes nice-to-have or might-be-interesting metrics can sneak onto the KPI list for project teams. These additional metrics are not needed; the team should focus in on the metrics that will provide accurate feedback on its performance.

Summary

Remember that successful KPIs:

  • Include a balance of outcome metrics and process metrics.
  • Total three to six metrics.
  • Are developed with the 3Ms in mind.

Crafting KPIs is an important step to guide teams through a continuous improvement process. A coach needs to keep the team focused on what success looks like and how best to measure it.

5 Tips to Make Process Improvements Stick!

For a process improvement practitioner, finishing the Control Phase of the DMAIC process is your ticket to move on to your next project. You’ve done an excellent job leading the project team because they identified root causes, developed and implemented solutions to resolve those root causes, put a control plan in place and transitioned the process back to the Process Owner. Soon, however, you learn that the process has reverted to its original state.

I’ve often heard project leaders lament, “We worked so hard to identify and implement these solutions—why won’t they stick?”

So let’s talk about fishing for a moment, because it offers some great lessons for making process change. Remember the quote, “Give a man a fish, and you feed him for a day. Teach a man to fish, and you feed him for a lifetime?” Seems simple enough, right?  But what is involved and how long does it take to teach people to fish so they could eat for a lifetime?

The same is true for process improvements. Seems simple enough to make a change and expect it to stick. So why is it so hard?

catch a fish

The fishing analogy hits home with me. I love to go fishing and have been an avid angler since I was young. And though it’s been a while since I taught my kids how to fish, I do remember it was a complicated process. There is a lot to learn about fishing—such as what type of equipment to use, rigging the rod, baiting the hook, deciding where to fish, and learning how to cast the line.

One of the most important fishing tips I can offer a beginner is that it’s better to go fishing five times in a few weeks as opposed to five times in an entire year. Skills improve quickly with a focused effort and frequent feedback. People who spread those introductory fishing experiences out over a year wind up always starting over, and that can be frustrating. While there are people who are naturally good at fishing and catch on (pun intended) right away, they are rare. My kids needed repeated demonstrations and lots of practice, feedback and positive reinforcement before they were able to fish successfully. Once they started catching fish, their enthusiasm for fishing went through the roof!

Tips for Making Process Improvements Stick

Working with teams to implement process change is similar. Most workers require repeated demonstrations, lots of practice, written instructions, feedback and positive reinforcement before the new process changes take hold.

Here are several tips you can use to help team members be successful and implement process change more quickly. Take the time to design your solution implementation strategy and control plan with these tips in mind. Also, Companion by Minitab® contains several forms that can make implementing these tips easy.

Tip #1: Pilot the Solution in the Field

A pilot is a test of a proposed solution and is usually performed on a small scale. It’s like learning to fish from the shore before you go out on a boat in the ocean with a 4-foot swell. It is used to evaluate both the solution and the implementation of the solution to ensure the full-scale implementation is more effective. A pilot provides data about expected results and exposes issues with the implementation plan. The pilot should test both if the process meets your specifications and the customer expectations. First impressions can make or break your process improvement solution. Test the solution with a small group to work out any kinks. A smooth implementation will help the workers accept the solution at the formal rollout.   Use a form like the Pilot Scale-Up Form (Figure 1) to capture issues that need resolution prior to full implementation.

Pilot
Figure 1. Pilot Scale-Up Form

Tip #2: Implement Standard Work

Standard work is one of the most powerful but least used lean tools to maintain improved process performance. By documenting the current best practice, standardized work forms the baseline for further continuous improvement. As the standard is improved, the new standard becomes the baseline for further improvements, and so on.

Use a Standard Work Combination Chart (Figure 2) to show the manual, machine, and walking time associated with each work element. The output graphically displays the cumulative time as manual (operator controlled) time, machine time, and walk time. Looking at the combined data helps to identify the waste of excess motion and the waste of waiting.

Standard Work
Figure 2. Standard Work Combination Chart

Tip #3: Update the Procedures

A Standard Operation Procedure (SOP) is a set of instructions detailing the tasks or activities that need to take place each time the action is performed. Following the procedure ensures the task is done the same way each time. The SOP details activities so that a person new to the position will perform the task the same way as someone who has been on the job for a longer time.

When a process has changed, don’t just tell someone of the change: legitimize the change by updating the process documentation. Make sure to update any memory-jogger posters hanging on the walls, and the cheat sheets in people’s desk drawers, too. Including a document revision form such as Figure 3 in your control plan will ensure you capture a list of procedures that require updating.

Document Revision
Figure 3. Document Revision Form

Tip #4: Feedback on New Behaviors Ensures Adoption

New processes involve new behaviors on the part of the workers. Without regular feedback and positive reinforcement, new process behaviors will fade away or revert to the older, more familiar ways of doing the work. Providing periodic feedback and positive reinforcement to those using the new process is a sure-fire way to keep employees doing things right. Unfortunately, it’s easy for managers to forget to provide this feedback. Using a Process Behavior Feedback Schedule like Figure 4 below increases the chance of success for both providing the feedback and maintaining the gains.

Process BehaviorFigure 4. Process Behavior Feedback Schedule

Tip #5: Display Metrics to Reinforce the Process Improvements

Metrics play an integral and critical role in process improvement efforts by providing signs of the effectiveness and the efficiency of the process improvement itself. Posting “before and after” metrics in the work area to highlight improvements can be very motivating to the team.   Workers see their hard work paying off, as in Figure 5. It is important to keep the metric current because it will be one of the first indicators if your process starts reverting.

Before After ChartFigure 5. Before and After Analysis

When it comes to fishing and actually catching fish, practice, effective feedback, and positive reinforcement makes perfect.

The same goes for implementing process change. If you want to get past the learning curve quickly, use these tips and enjoy the benefits of an excellent process!

To access these and other continuous improvement forms, download the 30-day free trial of Companion from the Minitab website at http://www.minitab.com/products/companion/.

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