PMG TAG BPM_presentation

How AAA transformed their business process improving the customer experience

April 16, 2009April 16, 2009

Andrew Kramer, PMGAndrew Kramer, PMGEvan Maxey, AAAEvan Maxey, AAA

http://upload.wikimedia.org/wikipedia/en/thumb/f/fd/AAA_logo.svg/501px-AAA_logo.svg.png

Agenda

• Business Context• Problem: Service Request Fulfillment• Solution: Service Catalog• Steps to Implement a Service Catalog• Service Catalog in Action – AAA• Summary/Questions

The Economic Imperative

• 2009 will be a year of “Do More With Less”• Projects with and without capital expense will

be subject to intense scrutiny• Only projects that will show ROI (save money)

will be green-lighted• What can Business Process Management

practitioners do to maximize results in this environment?

Than

Ever!^

Than Ever!^

What about your internal processes?

Did you know: The average company spends between 3 percent and 15 percent of

its total revenue delivering services to internal departments.1

1 Service Catalogs: The Heart of Service Delivery Management" Julie Giera, Forrester Research, Inc.

• Don’t just look at your customer-facing processes for opportunities, look at your internal processes too

• “Service Delivery Management” does just that – mines internal service delivery processes for cost savings and cycle time efficiencies

http://www.forrester.com/

Even More Neglected?

• Phone calls back & forth• Cogs of wheels not touching• Communications gaps• Information gaps• Unique experience each time• Requests come in, each is handled differently• Ad-hoc or non-existent workflow• Random task assignment, approvals, routing• Inconsistent service• No status or service level agreements• Unknown costs• Procedure documents

Common Example – Employee Onboarding

• What are the steps? What has to happen when a new person comes on board?

• What functional groups are responsible for each of these steps?

• How does the process start? Who owns initiating the process?

• How do groups signal to each other that they’re done and ready for someone to take the next step?

• How does the process end?

Describe Employee Onboarding at your Company

Mining for Savings

• Staple yourself to the process?• How many e-mails and phone calls back and forth?• How much paperwork? • How long does it take? • Are some parts overly controlled by a few people?• What kind of benefits could your organization realize

by improving on this process?

Show me the money! Identify cost and cycle time opportunities in the onboarding example

Opportunities Abound

Are your internal departments service providers?

Information Technology• Need new computer• Need password reset• Need new server infrastructure

Finance/Accounting• Need budgets• Need reporting/analytics• Need financial analysis

Marketing• Need product tag line• Need product logo• Need market research

Legal• Need contract review• Need advice

Facilities• Need to move cubes• Need new phone• Need maintenance

• Business Context• Opportunity: Service Delivery• Solution: Service Catalog• Steps to Implement a Service Catalog• Service Catalog in Action – AAA• Summary/Questions

What is a Service Catalog?

• Like an e-commerce catalog, except that it includes the “services” you provide to your customers.

• Provides graphical, attractive descriptions of available products & services in customer terms.

• Empowers user self-service: shop & order, then track status. • Provides real-time business process management,

integration, and fulfillment automation

VS.

Bringing Order to Chaos

• Phone calls back & forth• Cogs of wheels not touching• Communications gaps• Information gaps• Unique experience each time

• Tasks flowing in the right order• Accurate information flowing to

the right people• Things happen at the right time• Repeatable / measurable

Exercise Designing a Service Catalog

• The user-facing front end:– What would a user want to know/see?– What do you as the process owner want the user

to know about the service?• When they decide to place an order:

– What information do you need to capture from the requester?

• Then what? What are the fulfillment steps?• At what points during fulfillment do we want

to/need to communicate back to the user?

Ordering a New Computer

Sample New Computer Catalog Item

Your company

logo

Sample New Computer Order Form

Your company

logo

Sample New Computer Workflow

Benefits of Service Catalog Approach

The average company spends between 3 percent and 15 percent of its total revenue delivering services to internal departments. Companies that have implemented Service Catalog tools have:

•saved 30 percent to 40 percent of the cost of those services, •reduced the time to deliver services by 50 percent•improved quality by between 25 percent and 40 percent.

Service catalogs are the cornerstone of service delivery and automation, and the starting point for any company interested in saving money and improving relationships with the business. 1

1 "Service Catalogs: The Heart of Service Delivery Management" Julie Giera, Forrester Research, Inc.

http://www.forrester.com/

Quantifying the Benefits

• Monthly Call VolumeInformation Requests 100/monthNew Request 400/monthStatus Requests 200/monthRequests that could be bundled 100/monthTOTAL 800/month

• Average cost per call: $24/call• Monthly Cost: $19,200; Annual Cost: $230,400

Sample Benefits Calculations for a shared service departmentCall ReductionBefore Service Catalog

• 80% reduction in calls– Savings per month: 640 calls/month x $24/call = $15,360– Savings per year: 12 x $15,360 ≈ $185,000

After Service Catalog

Benefits of Workflow Automation

• Number of requests per year: 400/month x 12 = 4,800• Average employee salary (fully loaded): $90,000/year• Time to chase approvals: 15 min/approval• 15 minutes effort ≈ $10.82• Total cost of manual approval: $52,000

Sample Benefits Calculations – for process with purchasing approval

Streamline Approvals

Before Service Catalog


• Full cost elimination

Benefits of Workflow Automation

• Existing average time to fulfill Time # of Requests– Simple requests 1 day 100– Medium requests 3 days 200– Complex requests 8 days 100

Sample Benefits Calculations – for generic internal processStreamline Fulfillment

Before Service Catalog

• Expected/SLA time Time # of Requests– Simple requests 1 day 100– Medium requests 2 days 200– Complex requests 5 days 100

– Time saved for customer: 1,400 days – 900 days = 500 days• 500 days ≈ $140,000 (@ $280 / day)


Additional Intangible Benefits

• What additional “soft” or intangible benefits would be attractive within your company?

– Improved relationships between departments– Improved predictability for internal service

delivery– Reduced frustration = increased employee

satisfaction– Promotes culture of quality and accountability

Levels of “Service Lifecycle Management”F

unct

iona

l F

ocus

Ser

vice

F

ocus

Del

iver

y F

ocus

Life

cycl

e F

ocus

SystemMgmt.

Capabilities:•Team/Silo focused deliverables•Service portfolio non-existent•No clear understanding of workflow or expectations•Ad-hoc resource planning•Unclear picture of where time is spent

Build a Service Catalog•Catalog services•Review with users•Implement portal•Track/monitor requests•Establish SRM team

Capabilities:•Service focused deliverables•Process-based workflow & metrics•Service reporting•Aligned with business

ServiceOperation

ServiceLevelMgmt.

Metrics-driven Improvements•Service assessment•Active project reviews•Define service costs•Drive service level understanding

Capabilities:•Guaranteed service levels•Portfolio reviews with users•End-to-end service control•Cost reporting•Improvements based on metrics

ServiceLifecycle

Mgmt.

Collaborate with Business •Adherence to retirement process•Collaborate with business on initiatives

Capabilities:•Regular SC reviews•Demand is managed & forecasted•Continuous process improvement•Regular alignment reviews

AAA Before Service Request Fulfillment

•Unorganized approach to working requests•No metrics for productivity beyond

Approved Queue SLA•No metrics for quality•No automation•Limited knowledge base

Quick Wins – Immediate Improvements

•Unorganized approach to working requests– Established new queues that allowed for a

continuity in work effort and faster processing– “New Hire Class Provisioning” for project based requests– “Wireless Requests” for wireless and handheld devices

– Retired “Verify to Close” -obsolete approach– Closing old requests to clear out noise making

it easier to work in queues– Regular monitoring of all queues for aging by

team lead– Result: In progress queue aging down from 11

days to 1 day

Improvements continued

•No metrics for productivity beyond Approved Queue SLA

– Set forth expectation that near real time handling is both possible and expected

– Began measuring and discussing time allocation and tracking to phone logs

– Began measuring number of requests worked per day

– Result: ~21% productivity improvement

Improvements continued

•No automation– Automated Blackberry Approval process– Automated BlackBerry Security work with

Annual Security Awareness Training– Result:

– Removed an entire category of work– Improved the customer experience with

single activity request and approval– Reduced time to fulfill orders by days

In Progress for 2009

• In Progress SLA (same day service)

• Written Service Level Agreements for SRF service– Executive– Claims– Standard

• Quality Metrics– Request Quality 99.99% correct– Peer reviews– Lead quality reviews– Metrics for escalations

• Team building and rewards

• Automated application of line items by service catalog will free up .75 FTE for fulfillment activities

• Update knowledge base to “ready reference” usability

Summary: Improved Service Requests

• Initial assessment of SRF execution shows a working approach but with low productivity and significant team issues

• Preliminary changes to improve process execution and morale have resulted in significant improvements

• ~21% productivity improvement• SRF request aging Reduced from 11 days to

same day

How AAA Improved Service Requests

• Improved individual performance and team camaraderie

• Claims Phone & Executive requests being processed same day*

• Future changes including process approaches, knowledge sharing and automation will:

– Continue to improve productivity (10% target)– Reduce aging to near real time service – Improve service quality to a 4 nines level of

service (99.99% correct fulfillment)

*In by 3PM, out same day

SRFTeam

ServiceCatalog

SRS

FulfillmentTeams

Requestor

ServiceRequest

Approval

ApprovedServiceRequest


RequestFulfilled

SRFTeam

SRS

Add LineItems to

FulfillmentTeams

ApprovedService

Requestsw/ LineItems

These are the requests in the queues

for people to work

Approver

This is the“Approved Queue”

Stated goal for the Approved Queue is

“in by 3pm, out same day”

When the SRF Team is the fulfillment team, the request is either

“assigned” meaning we are working on it or “unassigned” meaning we have not yet begun working on it

There are multiple assigned & unassigned queues

SRF Team is a fulfillment team too, this work

constitutes the majority of our

labor spend

Current Mode of Operation: Simple Request

Current Mode of Operation: Projects

ServiceCatalog SRS

FulfillmentTeams

Requestor

SRFTeam

SRS

Add LineItems to

FulfillmentTeams

ApprovedService

Requestsw/ LineItems

Approver

RequestsFulfilled

ApprovedService

RequestsApprovedService

RequestsServiceRequests

Progress Reporting& Issue Resolution

Early notice of event Deliver SRF fulfillment work

Liaise to fulfillmentteams to ensure success

SRF SinglePoint of Contact

Help with Request Entry

SRFTeam

ServiceCatalog

SRS

FulfillmentTeams

Requestor

ServiceRequest

Approval



RequestFulfilled

SRFTeam

SRS

Add LineItems to

FulfillmentTeams

Approved Service Requests

w/ Line Items

SRF Team is a fulfillment team too, this work

constitutes the majority of our

labor spendApprover

SRF QueuesAdditional Info

RequiredBB Security Hold

Non-Integrated SupportEDS

inHousIn Progress

“Approved Queue”

In Progress Tasks•RBAC access provisioning

•Fiberlink •Payment tool access provisioning

•Autopay access provisioning•SRS access provisioning

•Crystal reports access provisioning•Callidus Prod. Comp access provisioning

•SalesX access provisioning•OCS access provisioning

•IT Employee separation requests•Cell phone ordering

•Cell phone provisioning•Cell phone inventorying & prep for reuse

•Blackberry ordering•Blackberry provisioning

•Blackberry inventorying & prep for reuse•Aircard provisioning

SRF (1)

SRF(2.5)

Labor Allocation

High Level Steps in Service Catalog Project

• Consider your internal opportunities• Identify internal process for transition to SC• Get green light• Appoint cross-functional project team• Use BPM best practices to streamline

fulfillment process• Implement user front end and fulfillment

backend to support process

Consider Your Internal Opportunities

• Leading candidates for transition to Service Catalog approach often include:– IT– HR– Marketing– Facilities

• Do your homework! Understand the current state of the internal process by researching:– Groups involved– Fulfillment steps– Interfacing Systems– Pain points– Cost and cycle time

Identify Internal Process for Transition to SC

• Your initial process or group of processes will serve as a pilot or proof of concept. Eventually, the goal is to incorporate every internal service into the service catalog, but don’t bite off more than you can chew

• What should be in the pilot? Your decision criteria will differ based on your own company situation/risk tolerance

• Consider:– How big or small an effort do you believe you can

realistically achieve with the resources and influence you have?

– How big or small an effort will demonstrate the value of the service catalog to management?

– How much cost or cycle time efficiency can you get from different groupings of possible pilot processes?

Get Green Light

• You will need dedicated resources, executive sponsorship, and financial backing to start the pilot

• How can you get the green light?• Handout: “Benefits Calculator Worksheet”

Appoint Cross-Functional Project Team

• You will need advocates and decision-makers from each impacted department

• Make sure to involve enough people but keep the team as small as possible

Use BPM Best Practices to Streamline Fulfillment Processes

• Don’t simply automate your existing messy process

• Look for opportunities to eliminate non-value-added steps, re-order steps to improve cycle times, push responsibility lower in hierarchy, etc.

• This is where you shine!

Implement User Front-End and Fulfillment Back End

• You may need new tools to support your improved process

• Don’t be afraid to continue refining your process in the context of your new chosen toolset

• Apply all software implementation best practices to ensure a smooth launch

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