Six Sigma is usually viewed with a jaundiced eye in Services as "those quality guys from Manufacturing" and many companies I know, actively discourage widespread usage of the phrase within their company. They may be using Six Sigma and Lean Six Sigma techniques for Process Optimization widely, though.

There is nothing wrong with Six Sigma techniques per se but what may be erroneous may be inappropriate application of techniques from Manufacturing without thinking about the differences that the Services side may entail.

I have seen many a call center adhering strictly to reducing variation in Average Handle Time. It is a worthwhile goal to achieve reductions in variation but a different picture may emerge when the agents whose AHT metric may be poor have very high Customer Satusfaction Scores! Now the AHT violators may be the ones winning new customers for the company!

In Manufacturing, uniform variation reduction may be a good thing across all metrics. However, services are, for the most part, a person-person-machine business while Manufacturing may be a person-machine-machine business. Manufacturing may be more subject to variation reduction than services in this context if it can be proven that one performance constraint that is violated is compensated by another one that is done well.

Which brings us to the concept of what is meant by Optimal Performance in Services? I would postulate that if you consider all Performance Measures holistically and if one measure compensates for another, the agent should be commended for performing well!

More processing time on a data process may be compensated by accuracy and precision measures being high. Again, only if accuracy and precision are NEEDED and add value to the company!

I think it may be better to think in terms of Optimal Combinations of Performance Constraints rather than consideration of each one in turn.

If you are a young company, competing against a larger competitor, you may want to go easy on the AHT metric and achieve high Customer Satisfaction (CSAT) scores. It may bring in valuable additional business and cross sell and upsell efforts on the phone may be more successful.

If you are an established company providing Customer Support over the phone for a $400 computer where your margin is about $50, you may want to achieve low AHT numbers even if the CSAT scores are not stellar. Customers should not expect Nordstrom services on inexpensive products.

If you are in the Nordstrom Call Center, throw out the AHT measure al together and make sure that the CSAT score is good!

It may be better to view Process Metrics, especially in Services as a set of Performance Contraints that you balance against each other and determine what works for you, given the stage of your company, your strategies and tactics in the marketplace.

Blindly following what worked in manufacturing may not work at best; at worst you may be turning off a lot of people to some very useful techniques by misapplication!

A cow is a very good animal in the field; but we turn her out of a garden - Samuel Johnson

Process Improvement is nicer to talk about as a concept and a ’Vision" thing than when it comes to actual action. I have seen many a company having company-wide, grandiose "Quality Improvement" goals with respect to business processes but failing miserably when it comes to realizing them in practice.

I have seen some companies where the centralized Quality and Process Excellence teams had very nice looking documents detailing KPIs and upper and lower limits for these KPIs but where the business process is executed, they were struggling with data collection or were not doing it at all because they were busy fighting day to day fires rather than do anything about strategic Process Improvement Goals!

In places where the situation is somewhat better, lots of information is being collected, albeit in spreadsheets. This is where there is a gap in obtaining actionable intelligence out of all these data vs. just lots and lots of data in many different databases or spreadsheets!

Stephen Few has written a couple of MOST excellent books, Show Me the Numbers: Designing Tables and Graphs to Enlighten and Information Dashboard Design: The Effective Visual Communication of Data !

The above two books shine a lot of light into turning bits and pieces of data into some thing more actionable! Any amount of staring at Excel Spreadsheets will not provide as much useful Information as a few well chosen graphs and dashboards.

Practical, useful information such as "Is my Average Handle Time Per Agent improving over the past three quarters?" or "Which of my agents need more training in collecting outstanding balances on the phone?" or "How is the Employee Turnover percentages affecting Number of Calls that end up in a sale in a telemarketing business process?" can all be answered with a few well chosen graphs and dashboards.

Dashboards are all the rage these days for Sales and Financial Information but are just catching on for Process Performance also, especially in the context of Outsourced Business Processes.

Information on designing and using select Graphs and Dashboards for highly useful practical actionable intelligence is never more timely!

When it comes to getting things done, we need fewer architects and more bricklayers - Colleen C. Barrett.

Another day another story of product recalls from Chinese factories for health and quality issues, this time is 1.5 million toys for one of the worlds most renowned Toy Manufacturers Mattel’s Fisher Price division which has drawn enormous world wide media coverage and added more fire to fan the flames of the Anti-Outsourcing supporters. Metagrobolize was created to draw attention to Best Sourcing, which may not be too popular with some of the worlds largest corporations as they ‘globe trot’ for the lowest pay scales, but takes a holistic view of the outsourcing companies requirements and endeavours to establish an offshore destination that is the best suited to both the process to be outsourced as well as the company considering to outsource. That China is now attracting this very negative attention comes as no surprise, because outside of the largest of manufacturing companies, China’s manufacturing industry is still very immature, with little or no regulatory control. As many so called ‘experts’ have recently commentated, this brings other Asian countries into the offshore outsourcing frame such as Vietnam, Cambodia and ‘Malaysia’ as options with a cost scale similar to China. “While companies could decide to shift some of the production out of China into Malaysia, Indonesia or Vietnam, it doesn't guarantee that they won't face the same issues in these countries whose infrastructure is less developed than in China.” Quotes BMO Capital Markets analyst Gerrick Johnson. Mr Johnson obviously doesn’t know the S East Asian region very well, as whilst I fully agree with this assessment of Indonesia and Vietnam as simply replacing Chinese manufacturing problems with an identical set of problems and for identical reasons, Malaysia and Singapore are the 2 most mature and advanced manufacturing hubs in S E Asia, and certainly Malaysia CANNOT be mentioned in the same breath as either Vietnam or Indonesia due Malaysia’s 30 yrs of manufacturing maturity, and longer political stability and 1st world infrastructure. However, Malaysia cannot provide clients with a labour force cost comparative to China, Vietnam, Indonesia etc, however what it can provide is goods and services that are delivered on time, at a cost that reflects the quality but is still very competitive when comparing to High Cost economies, making it a ‘Best Source’ location for many companies to consider. Take the time to look at other similar posts on this blog and you’ll understand our message.

James Champy has written a very important column Business Process Decisions Require Executive Involvement, not just Support.

Champy argues that IT has become so intertwined with Business Strategy, Tactics and Operations all the way from shorter cycles for everything - prospecting business, signing up new business, manufacturing and delivering.Quicker, better and cheaper, being the driving force in every industry and services business.

It is not enough if you process a Mortgage Application in a month’s time like you used to before. Your competitors have automated a lot of the process and are doing it in ten days. It is not enough if you ship the ordered goods in ten days time. Next day delivery is the norm these days.

I would extend this to IT/ITES service providers in India and elsewhere. I would venture to say that Business Process Decisions require the involvement of captive and third party providers of shared or outsourced services. In many business processes parts of the business process are done offshore, often replicating how things were done before in the home country.

This may not be enough anymore. Cost savings in sending the business process off to India is of no use if your competitor takes away your business because they can do it here in the U.S in 10 days instead of your cycle time of 15 or 20 days. Offshoring it will be of no use if you less mortgages to process. The outsourcing/offshoring effort and transitioning the existing process takes away valuable time you should be spending in improving your own processes so that it matches your competitors’.

ITES providers may need to be actively involved in Business Process Decisions and in many cases, have an IT arm that is looking for additional business. This is a golden opportunity for service providers to offer services that combine ITES and IT improvements before the process is put in operation. The distinction between IT and ITES services should vanish over time and it should be a single IT Enabled Business Process consulting and implementation services offering.

Being involved in redesigning and innovating new business processes with the help of newer technologies will enable ITES providers truly move up the value chain at a time when it is most needed.

As long as the cost savings are being emphasized and seized upon as the primary driver for outsourcing and offshoring, both buyers and providers are missing the forest for the trees.

Very important and timely article from Champy!

Recently we were researching a specific off-shored business process that was implemented with a homegrown software application. The entire user interface is browser-based and clients can login and kickoff an instance of the business process. The rest of the process is executed offshore and the final outputs sent through the same interface.

The problem was keeping tabs on the amounts of time different people have spent on the various process steps in the entire business process for billing purposes as well as measuring waiting times between different process steps. The waiting times are important because overall turnaround time for the client depends upon actual time spent on it as well as waiting time between process steps. Any process improvement effort has to consider these waiting times along with execution times.

However the big problem was that timestamps on when something was started and finished are not uniformly recorded at all stages of the process for such analyses to be done. And this was a homegrown software solution that can easily capture these events if the software development effort had been aware of such a need beforehand.

This kind of thing is much more common than we think. Nobody can be blamed for this also, since the objective of the software development effort was to primarily to automate the business process first and have it flowing smoothly. Process Optimization was not in the scope of work at the time it was initiated.

Of course, experienced software designers would tell you that good database design always included a modified by and modified time fields in almost any database table you design. Even with that, if the same row in the table is updated again and again, then you would have the modfified time fields overwritten every time something happens, losing very valuable information for process analysis and improvement down the road.

If you think this is bad, you should consider large enterprises that may use SAP software for manufacturing, Oracle for Financials and PeopleSoft for HR, Package XYZ for Warehousing solutions. Good luck trying to decipher process step times about an Order to Cash Process in such companies.

IT systems evolve to automate and make it more efficient to execute business processes. Optimization of business processes are hardly the focus at that time.

Quite often, process measurement becomes important and critical only in the context of outsourcing/offshoring since many measurements are mandated by the contracts and the SLAs they contain.

Unfortunately IT systems and software have evolved in contexts completely oblivious to Process Measurement and Optimization. Something all companies have to live with.

My guess is that "Process Aware" versions of enterprise software from Oracle, SAP, PeopleSoft (I know it is Oracle now, but still there are customers using the PeopleSoft versions) will be developed in the next five or ten years but they are not there yet.

For home grown software, designing software that is "Process Aware" and captures information such as timestamps whethey you see a need for it right away or not may be good forward-looking design. Fields that capture timestamps whould always be put in the tables whether you see a need for it right away or not. They can come in handy for a hundred other purposes like transaction audit trails or process measurement, analysis and improvement.

… the designer of a new system must not only be the implementor and the first large-scale user; the designer should also write the first user manual. … If I had not participated fully in all these activities, literally hundreds of improvements would never have been made, because I would never have thought of them or perceived why they were important. - Donald E. Knuth