By Alan Jackson, The Better Business Bureau Ltd
Costly I.T. Investment will only lock-in inefficiency if the underlying operational processes are not sound.
Redesigning these processes instead can deliver remarkable and lasting service improvements and bring
about a valuable change in thinking and organisational culture.
The Illusion of IT as a Panacea for Improving Service Performance
I.T. is often seen as the panacea to service improvement in back-office administrative systems and service industries. Whether it’s a CRM system, a scheduling database, or a performance management tool, there is a naïve view that if we make an investment in I.T. our problems will be solved and performance will improve.
But this belief is mistaken if there are systemic problems with the design of the operational system and management of the work. All your ills may not be solved by I.T. unless the underlying policies and resulting operational processes are sound.
In reality, applying I.T. to a system that is already inefficient simply makes it even more difficult to remove the waste at a later date. I was once asked to analyse the requirements for an enhancement to a complex logistics system to reduce complaints about delivery defects. The brief was not to improve the “on time in full” metric but to provide visibility of delivery defects (“overs” and “shorts”) so they could be managed better.
Apart from the proposed I.T. solution turning out to be unrealistically expensive, a root-cause analysis of the defects revealed that implementation of a number of simple countermeasures, many virtually cost-free, would all but eradicate the problems they sought to monitor! The countermeasures included simple mistake-proofing, improving working practices and incentivizing the right behaviours.
Had the I.T. solution been within budget, the inefficiencies and wastes may have been forever “locked-in” – the reason to address them having been conveniently “brushed under the carpet” – out of sight, out of mind. Customers are not impressed that you know how many times they have complained in the past. If you want to impress them, you need to stop the complaints coming in.
A rethink of your operations may be a lot more productive than tinkering with a broken system that may be beyond redemption. Adding I.T. “bells and whistles” may only give the illusion that things are running smoother.
Rethinking Your System
If you design your system from “first principles” to do what matters most to customers, no more and no less, you will inevitably improve service and reduce costs. You will be amazed at the potential for improvement revealed by identifying all the hidden, wasteful practices. And better still, everything you need to foster change and improvement already exists within your business.
You need to take a fresh look at your organisation and services as an integrated system, from the customer’s perspective. With this understanding you can harness the latent talent of both your managers and workforce to redesign your business blueprint. This means revisiting your business’ policies, the operating model – processes and procedures – the organisational structure and performance measures. You are then in a position to optimise your system by systematically eradicating inefficient practices to deliver in the most efficient way possible.
Below are the typical benefits we might expect for a call-out repair service.
- Reduction in end to end time (from the first call to completion of the repair) by up to 80%, or even more
- Up to a doubling of the first time fix rate
- Virtual eradication of failure demand (mainly progress chasing)
- 10 % reduction in time spent on repairs by tradesmen
- 10% of a tradesman’s day freed up by removing paperwork
- Virtual eradication of jobs rejected at post-inspection
Your 6-Step Service Improvement Plan
I can offer a flavour of what you should do to change from a traditional mindset to thinking about your organisation as a system. Remember that the people who work in your processes and with your customers every day are the best people to help you design things from the customer’s perspective. They are the experts, and often unsung heroes within your organisation, so use them!
- Establish how things are working today by identifying all the customer touch-points – where service value is delivered. Then spend some time in situ, not in some theoretical study at “arms length”, to understand the work and what the customer really values.
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Look at the value stream and support processes, from start to finish; examine, for example, the last 100 repairs completed, 10 houses let or designs approved. Define “output measures” – i.e. measures of what matters to customers – and use these to quantify your baseline performance.
Note: Be sure to avoid “activity measures”, these are the type the unenlightened use for top-down command and control of a workforce. For example, number of calls handled per hour says nothing about whether and how well the customer’s demand was met.
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At each touch point, categorise customer demand into “Value Demand” (i.e. demand you are in business to deal with, like “I need a repair”, “I want to order a widget”, etc.) and “Failure Demand” – demand caused by a failure to do something or to do something right (“what’s happening with…”, “I don’t know how to…”)
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Start with a common, problematical or costly failure demand and establish the root causes. If the impediments are related to the design of the current system, you put them in place (deliberately or inadvertently), so you can remove them!
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Map the flow of each value demand. At each step look for inefficiencies – interruptions in the flow, wasteful practices (activities that add no value) and things that go wrong. Design process countermeasures for each source of inefficiency.
- Document each improvement in your business blueprint and repeat continuously.
Reap the Rewards of Changed Perspectives
With the wrong perspective on the system, your policies will be wrong. You will then deploy the wrong processes, and use the wrong measures to monitor performance. When you can’t achieve your targets you will look for ways to ‘massage’ the data to hide them or make them more palatable.
Changing your perspective makes sense – if you find hidden waste and remove it, you will speed up the flow of work. Cash flow will be improved. Your customers will be happier. You will get less failure demand. You will free up capacity. Your staff will be more productive and staff turnover will be reduced, further reducing overheads.
If you completely rethink the way you design and manage the work, not only will you make remarkable and lasting service improvements, the process inevitably brings about a valuable change in thinking and organisational culture, which improves workforce morale. So think before you spend a fortune on an I.T. solution, which could be counterproductive in any case.
Alan Jackson is a business development coach operating in the UK Midlands region (www.bureau4betterbusiness.co.uk). Follow me on Twitter (http://twitter.com/B4BBler).
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