The Associated Press reported that over 2007 summer, there was a huge surge in applications for U.S. Citizenship. Rep. Charles Schumer of New York pushed for hiring retirees from the Homeland Security Department’s Immigration Services Division back to reduce the backlog.

This is a classic case of throwing people at the problem! Expedient? Sure. Making sure that these new citizens can vote in the 2008 Presidential Elections? Sure. That may have something to do with it!

Throwing people at the problem is more often done than spoken about! Whether you are shorthanded in a customer service center during peak demand times or you a BPO services vendor who just found out that your client is mad about you not meeting certain Service Levels (SLAs), throwing people at the problem is what is done, nine times out of ten!

Never works in the long run! Just costs more money, resources, all wasted! I can at least understand that while throwing people at the problem, a parallel intensive study is started to see ways of simplifying and improving the process. Most often, not!

C.K.Prahlad, the management guru called this "Paving The Cow Path". One cow starts walking across the meadow meandering through the grass, the second one follows, people take this for a hiking trail, and pretty soon there is a lot of traffic. Mistaking this for the best way a road can be laid across this land, paving it would be the "paving the cow path".

Processes are very similar. I bet that if someone took a closer look at the Immigration Application Processing, they can find a hundred, outdated, wasteful steps involved. They were most likely designed 20, 30 years ago. New technologies may have come along making many of the steps easier to do or unncessary, duplicative or simply too wasteful. There may be bottlenecks in the processing pipeline that are holding up applications while other parts of the process have excess capacity.

This is where before throwing people at the problem, it may be worthwhile to see if we are paving the cow path or laying a more direct, shorter and more efficient, effective route to the destination.

Nowhere is throwing more people at the problem worse, than in Software Development. Many senior managers have the wrong idea that if 10 engineers can get some software done in 10 days, 100 software engineers can get it done in 1 day! Throwing more people in software development only increases the span of communication among stakeholders and things get progressively worse!

When a task cannot be partitioned because of sequential constraints, the application of more effort has no effect on the schedule. The bearing of a child takes nine months, no matter how many women are assigned. - Frederick Brooks, The Mythical Man-Month

In a previous recent blog entry I discussed the various consulting styles that could be applied to outsource projects. The majority of industry analysts believe that the largest growth area in outsourcing over the next 5 years will be within the SME sector. Most MNCs are already outsourcing and the only concern for them is renewal or further opportunities. Everyone has witnessed a decline in the mega budget relationships over the last few years. As vendors and support services (consultants, lawyers, etc) shift towards the SME sector a re-think is required in the way projects are engaged.

SMEs are more cost conscious when approaching an outsource project. As discussed earlier a “Light Touch” style of consulting would suit them better than full engagement. A new breed of consulting organisation is joining the fray with pricing models to suit this style of outsourcing. The project costs will be fixed at the start of the contract between the client and the consultancy. Terms are defined regarding levels of engagement, staff commitments on the client side, and the project kicked off.

The fact that a more mentoring, knowledge transfer style of consulting occurs, means less time is required on site and therefore costs are reduced. Even the Legal, contract negotiation fees are wrapped up in the overall costs. This means a SME can enter the project with a set of fixed costs and with this they are better able to judge the ROI. More and more SMEs want the confidence of fixed costs when they enter a consulting project and the additional benefit of knowledge transfer means that the staff managing the relationship, post contract signing, are better able to do this with the knowledge they have gained and the intimate time they spent during the outsource project. SME outsource agreements are smaller and the benefits are sometimes harder to judge in overall terms against the organisation as a whole.

Post contract signing these organisation maintain an advisory role in regular updates ensuring both the client and vendor are in a partner like rather than adversarial relationship.

The Usual way to measure the impact of Process Improvement is to do Before and After measurements.

However here is a recent study that says, that doing just a Before and After measurement may be underestimating the true impact of Process Improvement. Here is the abstract of the study, The competitive impact of service process improvement: Examining customers’ waiting experiences in retail markets by Piyush Kumar of the University of Georgia.

Piyush Kumar contends that in competitive retail markets any Process Improvement implemented by one competitor not only increases Customer Satisfaction at that competitor but increases Customer Dissatisfaction at the Competitor’s also. This is what Piyush Kumar means by underestimating!

Very interesting findings! This sort of agrees with the way Kano Analysis is used to determine product or service features needed. Kano Analysis usually points to the fact that any feature or service innovation that is offerred as a Bonus or Additional Feature becomes an expected feature as time goes on.

Five years ago, airbags in cars used to be only for the driver. Now additional airbags for the driver and passengers are slowly becoming standard in all cars! Similarly GPS based Navigation devices are special accessories in most cars. Five years ago they used to be found only in the most expensive cars. Five years from now they will become standard equipment!

Service Processes and Improvement in such processes also become expected from all competitors when one competitor implements it! This Christmas Season, Wal-Mart actively advertised that they have added additional people at the checkouts so that there would be minimal waiting time at the checkout counters! They must have seen their competitors advertising that at their stores there is no waiting time!

What this means is that Continuous Process Improvement in services may be very important, even if one of your competitors gets the ball rolling!

The ability to learn faster than your competitors may be only sustainable competitive advantage - Arie de Geus

What percentage of a company’s revenues are spent in Business Processes - 5%, 10%, 15%? Guess again. It may be more like 30% to 60%. I did a little study about two years ago and wrote about it also here.

The traditional knee jerk approaches to increasing a company’s profitability are typically to stop buying tea and coffee for employees or to send all employees to the latest out-of-the-box-ideation-with-inspiration-from-Yoga workshop in an off site location, hoping to hit the next ’iPod" hit of your company’s industry!

While the answer is right under your own nose and you don’t see because it is hidden because of historical reasons!

Business processes consume a large portion of operating expenses and hence of revenues! Sometimes as much as 30% to 60% depending upon how process intensive your industry and vertical is! Service industries are traditionally more business process intensive as opposed to non-service industries. Healthcare companies may spend a lot more on business processes than a computer chip manufacturing company. In both cases however, the true costs of business processes is never calculated, much less used as a way to focus on cost reduction!

In some industries and some companies profitability is about 5 to 10% of revenues. If you can effect continuous improvement in business processes and reduce their costs by even 10%, you may make your company profitable by an order of magnitude!

And end-to-end Order-to-Cash supply chain process may consume a large portion of a company’s expenses on business processes. Companies hardly ever have a precise handle on these business processes, much less their true costs to the company.

This is more due to historical reasons than anythingelse. Traditionally, companies have used functional specialization like Design, Manufacturing, Finance, Sales, Marketing etc to apportion their budgets and costs, never in the context of how much does it cost me to process one order through the entire cycle.

This is not some nit! In order to improve the financial performance of your company, you cannot walk away from improving business processes if they form a large portion of your costs, Of course, you can innovate totally new products like the iPod or the iPhone and change the fortunes of your company but if you are in the business of mining Iron Ore or Bauxite, innovations don’t come along that often. Or a supermarket or a furniture manufacturer! In 95% of the cases, companies’ margins are so small that it is nose-to-the-grind wheel cost cutting that will increase your profitability.

Of course you simplify business processes and provide better, faster and cheaper services to your customers, you will gain more business from loyalty and referalls, whether you are healthcare, insurance or banking!

Continuous process improvement of business processes is inevitable and for that, you need to have a true sense of your process costs. Many companies’ IT systems and internal systems are set up for the last century’s functional specialization world. They don’t give you a precise read on your process costs, just because of past thinking and how the data is structured!

Funnily, new, and completely online players like E-Loan, Amazon.com, Dell.com and relatively more online Insurance companies like Progressive and GEICO, all have completely automated online business processes. Consequently a lot of the functional breakdowns do not affect getting and using data about end-to-end customer facing business processes!

The new century and increasing linkages of all internal systems in companies enables this making explicit of the true costs of business processes.

And Continuous Process Improvement requires full time attention as this note from Gartner attests!.

Understanding the true costs of business processes and liberating them from the clutches of functional silos will help achieve order of magnitudes improvements in efficiency and effectiveness!

More important than the quest for certainty is the quest for clarity - Francois Gautier

The case for many workers in the US and around the world is that they have been working in virtual environments for some time now. The virtual environments may vary; from completely virtual where the person is working independently from home or a small office and rarely sees the people face-to-face, that they work with on a daily basis. To other environments where the worker is in an office with one part of their team and other parts of the team are co-located in one or more other locations. Whatever virtual situation you may be in, if you are managing a virtual team and are fairly new to it, then “Managing without Walls” can help you.

A lot has already been written on ways and methods to communicate virtually, the different tools, etc., and Chapter 9 of this book is another one of those. However, I think this one is a must read chapter, though I fear it probably will not be read as thoroughly as it could be. The authors give good examples of how to thoroughly write an email so that there is no question about what the person is asking about, when it is due, etc. In an age where more and more people are using their phones to read and respond to their emails, we are getting back to very short email responses which lead to more questions than they solve. May as well pick up that phone you are using to answer an email and talk to the person...which is also stressed in this book (as well as many others and something I cannot stress enough as well!).

At least part of Chapter 3 will not be relevant for many people who just find themselves managing a remote team, they usually have no choice over who is on the team, or where that team is going to be working from. The chapter on Outsourcing is not really relevant, we have alot written on that already. Chapters 6 and 8 would work for managing any team, whether it is remote or not, does not matter. So if you are new to project management, they may be helpful.

I usually think I am doing a bad job of managing remotely if I have to continually be up both early and up late to talk with the team (I deal with a 10 hour time difference to Ukraine). One or the other is okay on a daily basis, but not at both ends, unless there is an emergency, then sometimes this type of constant connection is necessary. Chapter 12 gives some insights in to managing emergency or high-risk situations in a remote situation. The natural instinct for the one person who is remote (a lot of times the manager) is to want to be on the phone all of the time getting continual updates. But this often interferes with the other side being able to get the work done to handle the disaster. At the same time the other side has to be willing to communicate more often to explain the status of what is happening. The chapter outlines good suggestions for how to handle communications during an emergency situation. Other issues touched on in this chapter include risk planning. For example; planning for personnel issues such as when one employee leaves and starts recruiting others to join him/her, public transportation issues which can affect teams in the US, and be also disruptive to teams in other countries where public transport is the chief means of getting to work. I love this statement which should help anyone kick start their risk management plan; “If the things you are concerned about for your project never change, it is like continuing to worry about your 12-year old concerns when you are 55! This is not a very effective or a good use of your time. It suggests that little progress had been made in the meantime.” (pg. 318).

If you are new to managing virtual teams, especially helpful to you will be Appendix A – The Virtual skill set checklists which will help you analyze in what management areas are you ready to manage a remote team and what areas do you still need to work on. Unlike many other books on managing virtual teams, the book does not emphasize the areas where managing a remote team is different from managing a co-located team, save for two areas; the politics of a virtual team and managing conflict within a virtual team.

Whether you are brand new to managing virtual teams, or have been at it for a year or more, a project manager will find something new in this book, just read it though by picking out the chapters most relevant for you

Managing Without Walls, by Colleen Garton & Kevin Wegryn. copyright Oct 2006.

http://www.amazon.com/Managing-Without-Walls-Maximize-Cross-cultural/dp/158347062X