IBM SGO Community of Practise for BPM Business Process Management und Optimization

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1 IBM SGO Community of Practise for BPM Business Process Management und Optimization Marc A. Geiger, Service Area Leader Operations & Supply Chain Management Consulting Ales Prochazka, BPM Leader, Application Innovation Services Reto Waldispühl, IT Service Management Principal

2 Agenda Zeit Inhalte 14:00 Begrüssung & Ausblick 14:15 Wie verbessere ich einen Prozess? IBM Lean Sigma Business Simulation 15:30 Kaffee Pause 16:00 Lean Sigma Business Simulation (2) 18:15 Wie setze ich einen Prozess um? Demo der Tool-Implementierung vom optimierten Prozess 19:15 Apéro

3 Context of the need for Process Optimization: Today s COO is confronted with multiple dimensions of challenges integrated concepts leading to industrialization are required Cost pressure IT Costs & rigid IT Architecture Best Practise Standards of Competition Support of Revenue Growth COO / Head of BPM Demand for Flexibility Implement changing Strategies Changing Client Demands Regulatory Demands

4 Business Process Management as a coporate function enables enterprises to tackle these challenges Business Process Optimization Business Process Implementation Business Process Management

5 High process costs, long lead times and quality issues are a typical reality of historically grown processes The Lean method provides solutions and the basis for operational excellence Pain Points No End-To-End view & silos Rework & errors Long transport and waiting times Process Quality Unread reports Multiple approvals Double entry of data Redundant compliance checks Lack of flexibility Effects High process costs Unsatisfied customers Quality issues Long lead-times Instable processes Client Client Typical Lean Solutions Identify and eliminate waste Level workload Standardization View process end-to-end Satisfied customers Improving cost baseline Less resources Predictable costs Lean helps to establish cost-efficient, robust and flexible end-to-end processes that are aligned with the overall strategy and maximize the client s satisfaction.

6 How does it work? Lean Process Improvement is conducted in a high paced, structured and hands-on manner impacted roles of the process are constantly involved Selection Mobilisation Current State Assessment & Value Stream Mapping Future State Design & Implementation Planning Implementation Workshop 0 Kick-off & awareness training Workshop 1 Understand the current state Workshop 2 Map the current state Workshop 3 Future state design Workshop 4 Implementation Plan 1 Day 1 Day 2-3 Days 2 Days 1-2 Days Week 1 Week 3 Week 5 Week 7 Week 9 Mobilization Define ambition and scope Allocate your resources: Value Stream Lead Cross-departmental Team Establish value stream governance structure Map end-to-end process Identify what customers want Talk to those who do the work Gather data and map the end-to-end process Working Style Fast Informal Structured Design the Future State Generate improvement ideas using lean sigma techniques Assess impact and ease to implement Design roadmap Stakeholder Report Outs Sign off workshop outputs Build cross-functional consensus Decide next steps / solutions Implement Solutions Run a Pilot Implement Solutions Deliver the benefits

7 Process improvement report from a large Swiss Bank: A typical core banking process from an extremely unproductive Current State to a lean cost-efficient Future State (~ 25% less costs) Current State Analysis 30% 20% 25% 40% 30% 40% 10% 5% 10% 10% 5% 10% Client Client Role 1 2 Role 1 Role 3 Role 1 Role 3 1 Major Pain Points include: Very high rework figure due to bad quality leads to multiple iterations per case Physical document transport time and waiting time determines the process Lead Time Multiple client interactions make the process unpredictable and influences client relationship negatively All cases follow the process designed for the most complex case No end-to-end process understanding of employees working in the process Very fragmented IT landscape provoking many media breaks Future State Solution 5% 5% 5% 10% Client Client Role Role 3 Key Metrics Max Lead Time reduced from 1 month to 1 week Max Processing Time reduced from 3 days to 2 days First Time Quality improved from 5% to 80% Major Benefits include: Sales personnel with less than half of the administrative work Reduction of processed volumes by half due to improved First Time Quality and early triage Physical documents replaced by e-workflow eliminating transport and waiting time

8 In addition to our vast experience of working closely, in partnership with our clients, leading and co-leading projects and taking joint responsibilities for implementation we take our own medicine Since launching our IBM Global delivery program in 2009, Lean has grown to become part of IBM s DNA Over the last 3.5 years we have completed about 1,000 Lean projects in over 18 countries Over 60% of these projects have been in our client facing business We deploy Lean internally in IBM, with our customers and suppliers By the end of 2011 more than $300M of benefits have been delivered 30,000+ IBM staff trained in Lean with over 300 Certified Lean Masters, Lean Coaches, Value Stream Managers Extensive number of client testimonies and customer benefits We have invested millions in developing our Lean methods

9 The Lean Simulation Our principle: I hear I forget, I see I remember, I do I understand. (unknown)

10 Objectives of the Simulation Our Objectives for the session are to: Understand Lean Principles Experience the Lean Process Improvement Approach in action Have an enjoyable time

11 Courier Business Simulation Introduction Participants learn the principles and application of the Lean Approach by doing. This is a simulation, not a role play. Each person will do what makes sense within the rules. The objective is to experience the stages of the Lean Approach as an improvement team might do so.

12 Introduction to Lean and Value Stream Approach

13 What is Lean? More value to customers with less resource by eliminating waste and reducing lead times Before Lean project Typical Value Stream: e.g. Account Opening day 1 Lead Time (LT) day 15 After Lean project Account Opening day 1 Lead Time (LT) day 8 Where the gains come from Small Small to medium Large Value Add - adds value to the customer Value Enabling - No value; needs to be done Non-Value Add - No value; no need to be done Gained time is invested in activities adding value to the client The bottom line: better processes cost less not more! It s a win for the company, a win for customers & a win for staff

14 Workshop 'drumbeat' per Value Stream Value Stream Mobilization Current State Assessment & Value Stream Mapping Future State Design & Implementation Planning Implementation Mobilization Walk the process end to end Design the Future State Implement Solutions Define ambition and scope Allocate resources: Business Lean Lead Change Team Mobilise work See what really happens Talk to those who do the work Gather data and Map the process Working Style Generate solution ideas Assess impact and ease to implement Design roadmap Stakeholder Report Outs Run a Pilot Implement Solutions Deliver the benefits Fast Informal Structured Sign off workshop outputs Build cross-functional consensus Decide next steps / solutions

15 Assess the Current State

16 Assess the Current State Key questions to answer for the Current State are: What do the key process steps look like? Who are the Customers and what are their requirements? What is the demand volume, variation and frequency (by type)? Are there any other factors impacting the process? How well does the current process perform? Voice of Customer Kunden aus den Segmenten SIPOC Supplier Input Process Complaint-Mgmt Output Customer Schriftlich Beschwerde PKB / PKI PKB / PKI Gespräch - Brief einreichen -Telefonisch - - Physisch anwesend - Fax WMCH WMCH Eingang Beschwerde Mündlich GEM / GESM GEM / GESM - Telefonisch Schriftliche Antwort - Gespräch Analyse / Aufbereitung CIC CIC Kundensegment - PKB (Herr Albrecht) Qualitativ hochwertige Antworten Bearbeitungszeit von max. 5 Tagen Versendung der Bescheinigung am Ende des Jahres wird als erstes im Vergleich zum Mitbewerb versendet Der Eröffnungsbescheinigung wird ein Begleitbrief beigelegt Kundensegment - WM (Frau Glättli, Herr Signer) Environmental Factors PFA Zuordnung PFA Sofortige Verarbeitung der Auszahlungsanträge (2-3 Tage Eingangs-Kanal Senior Mgmt Internet Front Fallbearbeitung Abschluss der Beschwerde Wenn eine Antragsbearbeitung länger als im SLA vereinbart dauert, dann muss eine aktive Information an den CA erfolgen) Per Wochenfrist sollen alle Anträge erledigt sein (Erledigt heisst: Der Kunde muss das Geld auf seinem Konto zur Verfügung haben; Wochenfrist heisst: innert max. 5 Tage) Expressbearbeitung für spezifische Geschäftsfälle (Bearbeitungszeit 24 Stunden) Wenn etwas zur Bearbeitung fehlt, darf nicht mehr das gesamt Dossier an den CA retourniert werden Anzahl an Kundenunterschriften sollen reduziert werden (entsprechend Basisdokument)

17 Mapping the Value Stream Key steps: Walk the process to see how the work is done Interview role performers Capture steps, metrics and issues Create a Value Stream Map

18 Principles for Future State Design

19 Lean Principles The objective is to seek perfection and make value flow to the customer: As fast and smoothly as possible As productively as possible In as constant, predictable, and stable way as possible

20 Identifying Non Value-Add and Waste As a basis for the Future State development, two separate analyses are conducted on the activities of the Current State Value Stream: 1. Value-Add/Non Value-Add Analysis Value-Added Step (VA): Clients care about it (are prepared to pay for it e.g. financial transaction, processing applications) Adds information or changes and enhances the product or service Not rework Non Value-Added Step (NVA): Not essential (e.g. unnecessary approvals or reports) Adds no value to the end output or to the customer Value Enabling Step (VE): Regulatory requirements (e.g. SOX, Basel II) Business requirements (e.g. invoicing) 2. Waste Analysis The 7 Wastes (TIM WOOD) Transportation Inventory Motion Waiting Over Processing Over Production Defects

21 Lean Tools Numerous Lean tools are available for process improvement. Some of the most common and most useful are: Standardised Work The Current Best Way for the process steps is detailed and becomes the way of working for all to achieve consistent results. In the simulation, is there a best way of looking up the receiver location and calculating the delivery fee? Quality at Source Every individual is responsible for their own work. Any errors are caught early. Supported by Mistake Proofing or Poka Yoke : any behaviour changing constraint designed into a product or process to prevent incorrect operation. In the simulation is there a way of drawing stars to ensure that they always meet customer requirements? Systems with required fields: drop down menus

22 Lean Tools Load Balancing Manage distribution of tasks and resources to allow work to flow at a constant and predictable rate. Everyone does the same amount of work, no-one waits for work and variation is smoothed out. Do you see any bottlenecks in the simulation? Redistribute work A B C D E A B C D E Cellular Teams Physically link people and technology in the most efficient way to make work flow and minimise waste. In the simulation, is there a better way to arrange the work and the roles? From silos to team cells

23 Lean Tools Visual Management Allows everyone to see what is going on, track performance and identify when something is wrong. In the simulation, it may be helpful to display number of packages and fee as each is made ready for delivery. Visual Display Improved Communication Challenge the Norm Liste Offene Punkte aus Audits Daily Meetings

24 Developing the Future State and Improvements

25 Future State Design We develop our Future State Design by: Applying Lean principles and using our creativity to generate solution ideas Balancing transformational big thinking with rapid low cost improvements Creating a Future State Value Stream Map Arranging ideas into implementation projects Pilot the Future State in a Test Cell

26 Recap and Close In this session, through the Courier Simulation, we have: Taken an End-to-end process view Focused on Customers and their requirements Applied Lean Thinking and Tools to eliminate waste, improve a poorly performing process

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