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4 June 2009 by Nari Kannan
Outlier Instances and KPIs Measurement

I was reading an article about how measuring Average Handle Time (AHT) in a Financial Services company, did not allow a very eager Financial Services Agent to provide the best service she could have provided a customer.

The customer wanted to do something on the Financial Services company online website, but the Average Handle Time (AHT) metric did not allow her to spend more time on the phone with the customer, and give him more information that would have made his online interaction with the company's website easier. Seems like that would brought the AHT metric for the whole center, as well as that particular agent down. So she had to bite her tongue and not tell the customer about something that would have prevented frustration on his part in the first phone call even though she knew about it! When he tried doing what he wanted to do, he could not and has to call them again on the phone!

The center explained that they were trying to increase the Customer Satisfaction KPI and if the AHT value goes up, the Customer Satisfaction KPI might suffer because that meant someone else was waiting to be serviced. However the above customer who had to call back again, would definitely would have brought that measurement down anyway!

So they may not have achieved anything more than frustrating an important customer!

Measurement and Reporting of KPIs should also identify these kinds of outliers, or exceptional cases, and allow them to be included in the analysis of the KPI performance. Metrics drive behavior and your interpretation of metrics should not enable the driving of undesirable behavior, eventually!

Many time, once we put technologies and metrics together, we think we have put behavior on auto-pilot! We may have automated the driving of undesired outcomes, rather than the desired ones instead! They are our tools and not ends in themselves. The ends, we will have to be very clear about and communicate them well!

Exceptions and outliers happen all the time and as long as we interpret metrics and measurements along with them, we should be fine!

The young man knows the rules but the old man knows the exceptions - Oliver Wendell Holmes

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Posted by Nari Kannan  at  8:08 PM ET | ">permalink | comments [0]

29 May 2009 by Nari Kannan
Pricing as a Solution for Process Improvements?

A simplification of Pricing your product or service could simplify a lot of your business processes and save you money in the long run! Hard to believe, but I can give you an example from my own recent experiences!

Recently I was in both New York City and Washington D.C. In both places, I took a lot of the local Subway for my transportation. Both were excellent public transportation systems to get around the city, easily.

In NY city, I was not frustrated in my using the subway, but in Washington, D.C, I was. I bet that administering business processes in NY city also is easier for their authorities than it is in Washington D.C.

All because of how they price their service!

NY City subway systems price any trip at a flat $2 a trip that gets swiped away from your card or you put in the tokens you get when you enter a station, any of their stations. Once inside, you can travel any number of trains or connections for any distance as long as you donít exit any of their stations but take connections onward. No remembering where you entered and where you exited!

In Washington, D.C, trips are priced anywhere from $1.35 to $3.95 depending upon distances travelled on their system. This requires the ticket recording the place you are entering, calculating the price when you exit your destination station and taking it off from the value stored.

This is where I, as a user of the system got into a lot of hassles. The magnetic stripe got wiped out after I entered a station and the problem was known only at my exit station. Had to go talk to the station agent and get another ticket. The value left over in the ticket could be refunded only by one of their far away stations because thatís where their sales office was! What a hassle!

I am sure Washington D.C generates the same revenues per average passenger trip (about $2) that NY City does. The DC Metro system could simplify a lot of things for themselves as well as and provide a simpler hassle-free experience for their customer but just moving to a simple flat rate of pricing their service.

There could be many business process complications coming from a simple act of how you price your product! This is where you can save yourself a lot of hassle, costs, and customer complaints by simply following a simpler pricing strategy!

Something to think about!

Almost all quality improvement comes via simplification of design, manufacturing... layout, processes, and procedures. - Tom Peters

.... and Pricing!

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Posted by Nari Kannan  at  11:00 AM ET | ">permalink | comments [0]

1 April 2009 by Nari Kannan
Information Availability and Business Process Improvement

Information Availability is half the battle in Business Process Improvement!

First, it is the availability of information itself, in a central, easily accessible way, that can speed up Business Processes by an order of maginitude!

Measurement and reporting of Performance Measures or Key Performance Indicators (KPIs) themselves help Business Process Improvement. In many cases, these performance measure information is not readily available for actionable improvement efforts.

Service Oriented Architectures (SOA) and the extensive use of the Internet to stitch together, many different systems within the same company, as well as systems of suppliers, and service providers, have bridged the Information Availability Gap to a large extent. If organizations have not done this as yet, it is well worth looking into.

Lean Six Sigma and other Process Improvement practitioners often overlook the availability of information itself to speed up, eliminate, do in parallel, many of the steps in a business process. Instead of a sequential approach to two steps in a process, may be one person can do both of them in one single step, if information needed to do it is available easily. In some cases, approvals for some action can be taken immediately and the end user served by default. If subsequent analysis of the information reveals adverse information, the decisions can be undone. In some countries, they assume that Applicants for a Passport do not have adverse information in their background checks. Their applications are approved by default. If anything adverse comes up in a follow up analysis, the passport is revoked! This way 99% of the citizens who have a clean security record are not delayed by Police or Security checks for handling the other 1% properly!

Information Availability, especially when it comes to Performance Measures or KPIs, is indeed a problem in many business processes. Information systems such as ERP systems evolved, and developed to automate functional areas like Finace, Marketing, Sales, Manufaturing, Warehousing and Logistics. They were not designed with end-to-end business processes like Order-To-Cash processes in mind. Consequently, many of them donít even capture timestamps with great detail if you want to analyze Turn-Around Time (TAT) metrics! Databases just record at the most, the date and time when a table was modfied, and not any more details on the action was just performed. In practical terms, it becomes somewhat impossible to get information about TAT metrics in business processes! Information Availability about Performance Measures is not to be taken lightly. Efforts to improve this aids Process Improvement.

Information Availability is not very high on Process Excellence folksí aganda. That may precisely be the first thing to explore if you want to get a lot of mileage out of your own improvement efforts!

Information about the package is as important as the package itself. - Fred Smith, CEO, Fedex

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Posted by Nari Kannan  at  2:29 PM ET | ">permalink | comments [0]

26 March 2009 by Nari Kannan
Ease of Implementation Vs Payoffs in Lean Improvement

The funny thing about Process Improvement, whether Six Sigma or Lean, is that not all Process Improvement efforts are equal to others.

Some are "More Equal" than others!

Efforts needed for different Process Improvement ideas may not be linearly proportional to their payoffs. Before jumping into Kaizen activities, it may be worthwhile to prioritize efforts with respect to effort needed vs payoffs.

Sometimes a simple, almost "effortless" improvement effort may lead to a disproportionate payoff while a very expensive improvement may result in a not so impressive payoff.

In processes, especially when it involves the public, delays in service cause more dissatisfaction than the actual services themselves. Everyone hates waiting. In as much as waiting can be eliminated in business processes, customer satisfaction metric registers increases.

Analysis and eliminating delays in business processes, invariably leads to better service and disproportionate payoffs. Funny thing is that some of these payoffs show up as better word-of-mouth recommendations and additional business; something not immediately recognizable and acknowledgeable.

However beautiful the strategy, you should occasionally look at the results - Winston Churchill

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Posted by Nari Kannan  at  8:02 PM ET | ">permalink | comments [0]

26 February 2009 by Nari Kannan
Measuring The Unmeasurable in Business Processes

There are many Unmeasurables in Business Processes such as Customer Support Effectiveness, Customer Satisfaction, Service Excellence, etc. However, State of the Art in Business Process Measurement and Analysis is that many of these Subjective Factors are converted into some sort of Objective Scores.

For example, Customer Satisfaction Index (CSAT) may be on a scale of 1 to 10. For example, if a customer sends flowers to the CEO with a thank-you note, it may be a 10. If the customer sends a nasty note saying that they are terribly unsatisfied and will let everyone that they know about the poor service they got, may be a safe 1!

This is where sometimes, capturing Subjective Performance Information in the form of open ended text may convey more meaning than reducing everything to numbers and averaging them up and down. For example, outliiers, both positive and negative may need to flagged, counted and descriptions strored and readily made available! Analyzing these pieces of information and making effective use of them falls in the realm of art rather than a science!

If there were five positive outliers and five negative outliers, it may be worthwhile for the Process Folks to keep tab of the descriptions of what made these positive and negative outliers are and not assume that on whole, things are hunky-dory! The detailed open eneded information may be much more valuable to the organization than numbers themselves. Would the negative outliers be so negative that word of mouth from those can kill anything positive that may come out of the organization?

While what cannot be measured cannot be managed well, sometimes we may have to pay attention to Intangibles and accept them as intangibles, pay attention to them and get some useful actions out of them! This is especially useful in companies like Pharmaceutical companies where beyond a certain number of negative outliers, like side effects of drugs, the issue quickly escalates from statistical outliers to a full-blown crisis in no time, ironically, whether it is warranted or not! Perception overtakes reality!

Intangible factors may mean very good things or very harmful things, depending upon what they are, which industry you are in, what your products or services are. Unmeasurables can be quite tricky and may need to be handled better than measurables, sometimes!

There are intangible realities which float near us, formless and without words; realities which no one has thought out, and which are excluded for lack of interpreters. - Natalie Clifford Barney

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Posted by Nari Kannan  at  2:34 AM ET | ">permalink | comments [0]

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