Last Sunday’s Dilbert comic strip shows a very funny situation at the office but is all the more common than funny in real-life!

Dilbert wants to make a change to an approval system. However he needs to undergo a course in making changes to the approval system before he can do it. However the course enrollment system is down and so he cannot register for the course. He cannot book the time he spends discussing this with his boss, since it is not directly billable to his project!

Runaway Processes! All because of well meaning bean counters in the company want to put in internal controls!. Just to ensure that things are done according to rules. However, Internal Controls always have a way of slowing actual work done and sometimes overwhelm and obscure the very objective of the organization.

Happens all the time in the public sector and governmental organizations, but also can happen very easily in private companies too. If proper checks are not in place before hand.

This is where the Toyota Production System and its Value Added Analysis comes in handy. Internal Controls, no matter what they are are always Non-Value Adding to the end customer. By their very definition, they are INTERNAL controls and as such may not be of much use to the end customer. The TPS provides a way of identifying these kinds of activities and trying to eliminate them or at least shorten the time needed to do them.

Internal Controls are there to make sure that employees are accountable and there are audit trails of who exactly within the company was responsible for something. It may not be eliminated in all cases. A country may need to do a criminal background check or a police check before they can issue a passport. However, they can issue a passport first while kicking off a background check at the same time. Nine times out of ten, there may not be anything wrong. In case something bad comes up in a background check, they can revoke the passport.

Petty cash within companies have an upper limit. Any payment above a certain limit cannot be done in just simple cash being handed over but needs to go higher for approval. All of these are there for specific reasons and cannot be done easily away with. However these approvals can be speeded up with workflow, email etc.

Internal Controls may be necessary, but if you don’t keep a watch on them, they take a life on their own and pretty soon you will have absurd situations where the objective of the business becomes subservient to the internal processes!

Like the Dilbert strip above!

Creativity is the sudden cessation of stupidity. - Edwin Land

Recently there has been a spate of articles that hit the same theme: In order to improve business processes, you need to look at Operational Inteligence or Performance Management Information.

Small surprise! Slicing and Dicing of Sales Data to understand which of your products are selling in which regions or which of your sales people are meeting their sales targets by city, zone, region and state are all pretty common. Many enteprises have built these Sales Datawarehouses.

Companies like Hyperion enable you to slice and dice Financial Information; If your profit contribution for Product Group A is X, which among your products in that group is contributing more and which is contributing less? These kinds of financial insights can be obtained from Financial data Warehouses.

Same principle applies to most end to end processes. If your Order to Cash process takes 15 days and you are shooting for 10 days average, do you have insights on where the bottlenecks are? Is it because Dept X in this cycle is slower than Dept Y? Or does it have to do with the type of product or service? What type of clients are affected by this? Do you want to pay more attention to your high valued clients and speed up their processes alone?

What are root causes for not meeting your process cycle time goals? What are root causes for not meeting your Customer satisfaction goals?

All these answers require detailed Process Execution data collected properly and analyzed. This is where Operational Intelligence or Performance Management data comes into play and enables you to truly take an end-to-end view before you embark on process improvement efforts.

Otherwise, you may end up with a lot of sub-optimization of business processes that does not help anyone. Lean and Six Sigma efforts may show a lot of improvement in how Orders are entered into your Order Management system. However, are your orders entered faster, only to stagnate in the next step of the Order to cash process? You may have just wasted a lot of money improving something that causes a bottleneck downstream!!

Operational Intelligence is key to sane process improvement!

Continual improvement is an unending journey. - Lloyd Dobens

Dynamics of doing business in the BPO world are fast changing. Clients are increasingly seeking –

· Global delivery with emphasis on near, mid and offshore locations comprising both established and new geographies,

· Solution driven approach that requires a platform play in lieu of the classical lift & drop approach,

· Combination of services covering different spectrums of BPO and KPO.

Given these requirements, it is impossible for several service providers to offer the same on their own, except for the few fortunate large service providers who possess Consulting, IT and Process Design & Delivery capabilities.

If this is the case

Should the new versions of BPO and opportunities there upon a prerogative of only the large and full service players?

Do the small and medium players invest substantial resources in time and money to develop these capabilities organically?

Or, do these players invest capital on inorganic pursuits to fulfill the requirements.

No doubt the options mentioned above are valid. In addition to these, an important option could be BPO Collaboration. Some possible collaborations could be

1) Niche IT companies with out BPO play collaborating with K/BPO providers. This will help IT companies introduce annuity revenue streams over the existing revenue streams that may be primarily project based and also help them deepen their client engagements. Collaboration with K/BPO service provider can also help IT companies pioneer services model (SaaS) which seems to be finding favor with the buyers of software services

2) BPO service providers with delivery centers in a particular geography aligning with the BPO service providers in other geography to expand / create a global footprint on a win-win basis. This will also help BPO service providers to introduce new language capabilities in addition to the existing ones

I have listed just couple of possibilities above and there could be several others. Also, if we look at any IT company a small one though, they talk of partnerships either for system integration or software implementation etc. It is not uncommon too see a very large / marquee IT company collaborating with a small IT company for mutual benefit. This leaves me wondering why the same concept cannot be applied to the K/BPO companies.

Is the revenue potential a limiting opportunity or are there other compelling reasons? It will be interesting to obtain views from the readers of this post.

Outsourcing Mentor has just released a new free application that can assist in the vendor selection process. This application poses a series of questions in 4 main pillars of vendor selection.

· Quality – How much does quality matter when thinking about outsourcing

· Risk – Does managing risk play a large part in choosing a vendor

· Strategy – Is your decision to outsource a strategic one within your organisation

· Cost – How important is cost when choosing an outsource vendor

After the application is downloaded and installed it walks you through the questions and produces a relationship chart. This can then be used to weigh the relative importance of these 4 pillars and provide input in your choice of a category of vendors.

There are many thousands of vendors based all over the world who are interested in your business. Identifying some key objectives can help you narrow the list down to a more manageable section of the vendor community. This can be used to produce the initial list of vendors before you move into generating the short list.

To get the free application, click this link

I have seen many Six Sigma Projects that collect data at a very minute level (at a sub process level) and try to effect improvements at that level. In many cases, these may not account for much in the overall scheme of things. This happens more in the context of outsourcing. Outsourcing usually involves a smaller part of the larger process. The outsourcing service provider effecting any improvement over their part of the process may not account for much improvement in the overall process.

For example, if a Help Desk process is outsourced and the same kind of help desk call with the same problem is handled over and over again by the outsourcing service provider, any amount of process improvement will not improve things. This may be due to some design flaw in the basic product that is being helped with. The right thing to do in this case is to address the root cause and make sure that this problem does not recur rather than find a faster and cheaper way of doing the same thing over and over again.

This is where Lean Efforts make a lot of sense before Six Sigma efforts are taken up in earnest. After all, why improve a process step if you can eliminate it altogether or address the root cause much more effectively so that you don’t have to perform certain actions or perform them with smaller amounts of energy and effort?

Forms (paper of online screens) simplification and re-design is a great example of the kinds of Lean Efforts that pay off well before Six Sigma efforts. This is where good software engineering can implement many Lean Concepts without realizing that that’s what they are upto. Forms validation on the screen can be simple syntactic (like Numeric fields, string fields, proper URL formation in a URL field, etc) or more semantic (checking an internal database for verification - Amount of Mortgage Payments for the Loan asked for cannot be more than X% of Monthly Income, for example). The more semantic checks are done at the forms stage itself may save a lot of time and effort on the part of a Mortgage Underwriter or an Insurance Underwriter!

These kinds of solutions make it easy for the end consumer as well as the business. It may be better to Lean sometimes before applying Six Sigma!

Believe nothing, no matter where you read it, or who said it, no matter if I have said it, unless it agrees with your own reason and your own common sense. - Gautama Buddha