Archives for June 2011

What and What if? The start of a typical eProcesses client relationship

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eProcesses Consulting helps clients implement strategic change. Since my start as a consultant in 1983, and full time since 1985, I have seen a range of approaches used by consulting firms to begin a client relationship. I have seen firms that basically had one tool or solution set and sold that tool as the appropriate solution for a client, even when it was not. As a Certified Management Consultant (CMC), I comply with the Code of Ethics of the Institute of Management Consultants (USA), which states that I will only recommend solutions appropriate to the needs of my clients. So, how does eProcesses Consulting determine a client’s needs?

The simple way for eProcesses Consulting to determine a client’s needs is for the client to tell us. Client disclosure has risks and benefits. The benefit is the saving of time and the client has emotional ownership of the scope of a potential consulting project. The risk is that the client’s perceived need may not address the root problems and opportunities.

Generically, an eProcesses consulting relationship, strategic change implementation, begins with what many firms call the analysis, assessment, or discovery phase. Having participated in many of these, the deliverable most firms leave with the client is a list of findings with a proposal to fix some of the identified deficiencies. The eProcesses approach is different from most. Because eProcesses wants to leave the client with something of enduring value that, candidly, we hope will set the stage for a longer term client relationship, we call the initial phase the Preparation phase and we expect to leave you with three valuable deliverables beyond a “to do” list and a proposal. 

Prepare

The Prepare phase deliverables are up-to-date process documentation, a high-level, balanced scorecard-like dashboard, and aligned organizational goals. Goal alignment and a scorecard are foundational to any sustainable operational and financial performance improvement. Aligned goals tell the organization where it is going. The organization’s processes are how it will reach those goals. The dashboard allows the organization to keep score and know when you reach or fall short of the goals. The combination reveals improvement opportunities. As part of the Prepare phase, eProcesses also analyzes historic operational and financial performance to identify performance gaps and bottlenecks that inform the goals and the dashboard and emerge from the process documentation and analysis. A plan to close the gaps and bottlenecks associated with the goals forms the basis for the next, the Provide, phase.

Provide

This is the Provide phase because it provides tools for sustainable change and improvement. These tools include process change and deployment of techniques under the headings of Lean, Six Sigma, and Reengineering. The Provide phase would normally include an expansion of the dashboard deployed in the Prepare phase; the expansion provides drill-down and additional analytical capability that will be useful in tracking progress on reaching the aligned goals and objectives, toward the closing of performance gaps, and for the identification of new performance gaps.

Produce

For the changes that begin in the Provide phase to be sustainable, the new tools, processes, and behaviors need to begin to be part of the organizational culture. During this phase, the culture observed at the beginning of the Prepare phase starts to change. True cultural change in organizations may take several years, but eProcesses can help the client team develop new habits and disciplines and shed old habits during this phase of continued, but less intense, involvement by the eProcesses team. This involvement includes working with the client’s technical team to support the dashboard application, working with the management team to increase the value of the new tools introduced in the Provide phase, and preparing the organization to sustain the cycle of change internally.

County Office of the Public Defender

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The Public Defender provides legal defense services for the county’s indigent and those unable to otherwise afford legal counsel. The Public Defender initiated the project to work with his staff to develop and implement specific recommen­dations for productivity improve­ment. Project staff reviewed all work processes for clerical support and investi­gators.

This project defined the tasks of the three major groupings of employees:  legal secretaries, records clerks, and investigators. This was the first time work measurement techniques measured actual work within the Public Defender’s offices supplemented by employee input. The value of a study of this technical nature is to align the support staff required to the current staff levels of attorneys they assist.

During the project, all work activity was identified in each of the departments included. Department management then reviewed the submitted activities to eliminate redundant items. Some of these redundancies resulted from different interpretations of “the same” job by different individuals. Department staff collected a minimum of three weeks’ data by recording daily occurrences of each activity. The majority of areas recorded four to five weeks’ data and made changes to the task lists during the early weeks to enhance the listed tasks. While the employees recorded task activity volumes, project staff observed and determined the average time required to perform each task. The task observation phase gave project staff personal contact with each staff person and provided an opportunity for project staff to verify task steps. It also reassured the employees that project staff would pay careful attention to each performed task.

Span of control and organizational structure analysis revealed that, not only would significant savings result from reducing the number of investigator groups, accountability and control within the investigator groups would improve. In the Records Section, project staff determined that eliminating one of the two super­visors would yield a span of control within acceptable limits.

Among methods improvements recommended and implemented during the study, project staff created a computerized data base system to replace manual card files. This new system allowed faster responsiveness to the client and user community and eliminated a perceived pressing need for additional staff in the Alternative Indigent Defense Program. Altered work assignments balanced the work load among legal secretaries and among records clerks. 

After thorough analysis, project staff recommended against privitizing records storage based on lower in-house cost and improved access to and accountability and control over archived records.

A staffing model based on measurable work volumes led to staffing adjustments and reduced county expenditures per unit of service provided.

Mining – Consolidated Case Study

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The following is a consolidated overview of the various mining industry projects involving eProcesses Consulting since 2006 in iron ore and gold mines in North America, South America, and Africa. 

The project began with an analysis of the historic financial and operational data and the core processes. The analysis yielded best demonstrated performance, effective capacity, and average performance for each process and functional area. The analysis revealed performance gaps and a list of recommended projects.

Goal alignment assessed the extent to which executive level goals and objectives aligned with each level lower in the organization. A list of projects emerged as necessary for attaining the combined goals and objectives of the organization. Project management facilitated the achievement of each of the organization’s goals for the fiscal year.

Engineers and supervisors received training in Six Sigma, Lean, and Kaizen tools and techniques. The projects they did concurrent with the training added to the skill set of the individuals and contributed to the organization’s operational and financial improvement and goal attainment. The training prepared the organization to sustain a culture of continuous process improvement.

The improvement areas included increased equipment availability, increased yield per blast and blasts per shift, faster lab turnaround, better processing yield and capacity, and increased equipment and people utilization.

The project team worked with client management and IT staff to develop and implement a balanced scorecard management dashboard. The dashboard provides management with a view of operational performance by department, by shift, by area, by equipment type, and by individual piece of equipment. The dashboard home page includes a graphic representation of overall organizational performance by department or functional area using a single relevant or consolidated metric. Each view of the dashboard has drill down capability by month, week, day, or shift. Each metric has time series and pictorial views.

Mining and natural resources companies generally have tremendous improvement potential due to the scale and scope of most mining operations.

Insurance Office Clerical Operations

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With the president of the client organization the primary contact person, a four-year series of engagements developed and implemented a new strategy for organizing and operating the clerical functions and improve white-collar productivity of a 23-location insurance company. 

Overview of the Client

The client was a non-General Fund, quasi-governmental state agency that serves as the provider of last resort of workers’ compensation coverage for employers within the state. Although it is a state agency, the client competes freely with and is required to conform to all the regulation of conduct of other insurance companies. It insures approximately one-half of the eligible employers and between 20% and 40% of the eligible workers in the state. 

The client  is intended to serve a “regulatory” function solely by demonstrating superior performance in state’s workers’ compensation insurance marketplace. 

The client can be thought of as an insurance company with both “home office” departments/functions and field offices that provide the vast majority of the direct contact between the client and both its insured policyholders and the injured workers of those policyholders. 

Included within the scope of the Office Services project were all clerical activities in the field offices. These activities included:  mail services; computer operations; personnel functions; policy coverage verifica­tion; word processing; filing; data entry and check processing; and bill paying. These activities are vital to the functioning of the field offices. With the exception of personnel, the performance of each of these activities by a support or clerical person is intended to allow the technical or profes­sional staff to devote the majority of their work day to more highly-skilled job duties. 

Project Overview

The project’s charter was to deter­mine the “best way” for the clerical activi­ties of the field offices to be per­formed including who should perform them, at which point they should be performed, how personnel should be or­ganized, and the staffing required to perform these activities.  Included in the scope were the operations of the 23 field offices and associated legal operations. After 15 months, this charter was expanded to include the claims adjusting activities also. The objective was to enhance the ability of client personnel to deliver timely benefits to injured workers and keep costs to employers as low as possible rather than simply improving clerical processes. 

Activities were iden­tified as to the flow of work, the reasons for the work, the frequency of the work and the time required to perform the work. Supervisory and hourly personnel provided written and oral suggestions for improving the processing of work. Focus Groups evaluated the suggestions and designed work flow recommenda­tions to eliminate unnecessary and/or redundant work. The need to have staff dedicated to routing work between processing steps was reduced. Staff was effectively allowed more productive time. Work is organized around measurable units of work having defined start and stop points rather than around collec­tions of tasks. This facilitates the manage­ment of the work process rather than of individual activi­ties, reduces distances between work points and therefore backlog accumulation points, and increases control over and account­ability for the status of the work. 

A broad range of fact-finding and forecasting techniques were used including, but not limited to:  Focus Groups within individu­al dis­trict offices; significant interaction with Home Office and staff functions and with all field office departments; comprehensive reviews of past studies and efforts; interviews with insurance industry experts outside the client organization; and data collection and survey techniques, including flow charting, statistical sampling, and application of work simplification, task analysis, methods and systems review. This methodology reflected a zero-based analysis of the basic claims products and processes. 

This resulted in the development of “The Model Office” and the “Claims Adjustment Team.” These two processing models represent significant change in organization­al structure. Claims Adjusting and Support functions are integrated into natural work units. Supervisory span of control was altered. Reporting relationships were modified. Wherever possible, proximity was improved. Premium-based staffing was replaced by staffing based on measurable work. The result was improved productivity, teamwork, sense of belonging and purpose, and customer service. Organizing into teams has improved the visibility of the numerous processes. This visibility facilitates continuous improvement. It is expected that this new organization will provide not only current improved benefit delivery but also better, more clearly defined employee career paths and increased responsiveness to future challenges. 

Process oriented, activity based measurement focuses management attention on those elements that are directly within their control. The new organization structure and the increased productive time improved the ability of the field offices to effectively meet the needs expressed in its Mission Statement. 

Management’s focus was altered to deal with effective overall benefit delivery rather than an orientation toward individual function within the benefit delivery system. The added benefit to this reorganization is improved communication with policyhold­ers/employers, with injured workers, and with co-participants in the benefit delivery system. 

A next step was an on-going assessment of and reaction to actual and anticipated changes in the client’s environment as they affect claims products and processes. This next phase marked the beginning of an on-going, comprehensive look at the foreseeable future and at the ever-changing Claims environment. An immediate goal of this new phase was the state-wide implementation of the recommenda­tions. 

Implementation of The Model Office began after a six-month development phase and continued across the state. The Claims Adjustment Team concept began a test phase fifteen months later with a final evaluation presented to the client’s executive committee 18 months later. 

Project Results

Initial results included: 

1.         Prior to implementation of The Model Office, the time from receipt of a medical bill for payment until the payment of the average medical bill in most offices was in a range of from 40 to 60 days. In those offices which implemented The Model Office, the average time to payment dropped to within a range of from 14 to 21 days. In those offices that implemented the Claims Adjustment Teams, the time to payment was 7 days or less. In one office, the typical medical bill was paid on the day it was received.

2.         Prior to implementation of The Model Office, lost or misplaced claims files were commonplace. After The Model Office was implemented, lost or misplaced claims files became rare. In those offices that piloted or implemented Claims Adjustment, no lost files were reported after implementation.

3.         In The Model Office and (even more) in the Claims Adjustment Team offices, the sense of teamwork cooperation improved among affected office staff.

4.         The acceptance of The Model Office as a basis for determining clerical staffing increased district management and senior management sense of control over the proper level of clerical staffing. Because the project coincided with unprecedented growth in new claims filed, it was not possible to evaluate actual staffing impact. However, during the initial roll-out of the Model, ten of the 23 field offices were found to have excess staff when compared to the Model. This excess staffing totaled 21.3 Full-Time Equivalents representing annualized labor costs of $536,760.

Under the Claims Adjustment Team concept, narrowly-defined clerical job classifications are to be eliminated. Few positions will be dedicated solely to clerical activities. Teams of technical, semi-professional, and professional claims staff, rather than individu­als, will be assigned to caseloads. One technical team member will do all word processing, data entry/processing, filing, and other previously-clerical tasks. Routine claims adjusting activities will be completed by trained claims adjusters. More difficult, less routine decisions will be left to the most experienced adjusters within each team who will have ultimate responsibility and accountability for the progress of the team’s caseload through the adjusting process. 

The benefits to the Claims Adjustment Team concept were: 

  • an increase in overall caseload per staff person (with a related decrease in claims expense per adjusted case);
  • improved control over case activities and more timely benefit delivery (with the potential for reducing claims losses per adjusted case); and
  • better-defined career paths and an improved sense of responsibility for case outcome on the part of all claims-related staff. 

Pre-pilot estimates suggested that a net increase in claims caseloads would reduce required staffing by 282 non-supervisory positions with a total annualized personnel cost of $6.5 to $7.5 million and 28 to 35 supervisory positions with a total annualized personnel cost of between $980,000 and $1.4 million. (It should be noted that these savings are based on the actual versus recommended caseloads and spans of control at the mid-point of the project. It had previously been generally accepted that caseloads throughout the state were too high rather than too low.)

Financial Services Internet Portal

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Problem: Transition from brick-and-mortar to Internet model with need to clarify organizational mission, define and implement processes satisfaction.

Solution: Assisted in the selection of CRM (Clarify) and Telephony hardware and software (Interactive Intelligence) to create a web enabled contact center.  This Webcenter included webchat, VoIP, multimedia and skills based routing. eProcesses created all process flows, workflows, and included the creation of all software training (leader lead as well as CBT) for Clarify and Interactive Intelligence.

We introduced a management system which included 7 components, consisting of Expert Behavior Models, Barrier Removal, Continuous Improvement Meetings and other effective management practices.

Results: Fully-functional customer contact center implemented on time for site launch.  Shortly after site launch, client decided to modify its business model to become an Application Services Provider rather than a B2C financial services site.