Continuous Improvement: a Little "Retro" is a good thing
Increasing the performance of a shared service operation, whether in-house or outsourced, is a major key performance indicator (KPI). There are always new targets and pressures to reduce costs, increase services, improve quality and ensure compliance. The cycle can, at times, appear to be never ending.
Earlier this year I wrote about AI and Robotics and its impact on shared service centre (SSC) operations. Outsourcing providers will lead the investment in RPA (Robotics Process Automation), especially in areas that reduce the number of employees they need to attract and retain to service the clients in their portfolio. But what are the techniques that most organisations use to drive service performance?
The core techniques of 6 Sigma, LEAN, process benchmarking and other industrial engineering approaches are still the “tool of choice” to drive service performance. The second most popular is best practice sharing, collaboration and training.
And, before we get excited about the robots, it is worth looking at these more “retro” continuous improvement (CI) techniques.
Source: SSON State of the Shared Services Survey 2017
Continuous Improvement Techniques
There are many CI techniques, and some have almost a cult following regarding how well (or not) the method will drive the desired improvement. Let’s look at a couple, just to remind ourselves what these techniques are, and what is their most appropriate application:
- 6 Sigma – 6 Sigma is a disciplined, data-driven approach and methodology for eliminating defects (driving toward six standard deviations between the mean and the nearest specification limit) in any process. (More information – 6 Sigma for Dummies)
- LEAN – lean means creating more value for customers with fewer resources. A lean organisation understands customer value and focuses its key processes on increasing the value continuously. The ultimate goal is to provide perfect value to the customer through a perfect value creation process that has zero waste. (More information – LEAN for Dummies)
- LEAN 6 Sigma – Lean Six Sigma is a managerial approach that combines Six Sigma methods and tools and the lean manufacturing/lean enterprise philosophy, striving to eliminate waste of physical resources, time, effort and talent, while assuring quality in production and organisational processes. (More information – LEAN 6 Sigma for Dummies)
- Benchmarking – comparing one's business processes and performance metrics to industry bests and best practices from other companies. Dimensions typically measured are quality, time and cost. (More information – APQC Benchmarking)
There are many other methods and techniques, but these tend to be the “process of choice” for most SSC operations. At the heart of each of these methods is collecting and analysing data from the process. The first step in any successful CI project has timely, accurate and robust data in areas such as:
- Quality – how many defects occurred, when did they occur, who created them, where did they happen in the process? This type of data around quality will help the CI programme focus in on where changes can be made.
- Costs – how many people are required to do this step in the process? How many X can someone do per hour? Which steps in the process take the longest to do? Which steps are highly repetitive versus require decision making? Answers to these types of questions will help identify the most costly portions of a process and then create a focus on where to change, eliminate or automate the process.
- Time – how long does it take to do a process? How long are things sitting and now being worked on before they start the process? What is the speed of response (e.g. how quickly a phone is answered)? What is the pattern of work (timing of when work comes in, seasonality)? Understanding the work patterns and the end-to-end time required to complete a process will give the CI team a focus for where to look for improvements.
- Service – are the customers happy? What is the NPS (net promoter score)? The level of help desk queries? Customer survey feedback? Unhappy customers create noise and a lot of non-value adding activities. If service is an issue what are the main causes and what can be done to eliminate them?
Best Practice Sharing, Collaboration and Training
People who know how to do their job well will not only perform better but also be happier employees that are more engaged. And, if the employee is more engaged, he/she will identify where things could improve, collaborate with colleagues and want to share best practices.
This is not rocket science, but many organisations still fail to invest in the level of training required for SSC employees to perform their job well.
- Collaboration – Does your team leader on nights share with their counterpart on days? To they compare practice and discuss how to share information?
- Training – When you onboard new employees do they receive appropriate training to be productive day one? Do they have a buddy to help them? Do you have tools or techniques to help you identify when individuals need remedial training?
These are just some of the questions that leaders in SSC operations should be asking of their teams to drive continuous improvement (along with other benefits).
The continuous improvement methods and techniques described above are potentially not as “sexy” as robotics or artificial intelligence or any of the more highly published trends. But, these techniques will create improvement in the service delivery model, and with minimal costs, and as all SSC leaders know that is critical to achieving the KPI’s of the business.
A little “retro” is always a good thing.