Wednesday, 22 July 2009
Business Process Re-Engineering as a technique has been around for some time and is often advocated as a way of refocusing how public services are delivered. But how much is really understood about it? Could it help in the quest by Gordon Brown to put the citizen back at the heart of the services that we deliver?
What is it?
When should it be used?
What could it achieve?
What is Business Process Re-Engineering?
BPR, also known as process innovation, is a jargon term with no magic formula behind it. In fact many public sector organisations are already carrying out BPR type reviews continuously, but with little co-ordination or corporate direction. BPR is fundamentally a simple concept, taking the goals of an organisation and identifying the best way to meet them given the constraints within which the organisation has to operate.
In order to work effectively BPR needs people who have more expert understanding of your business than expert understanding of BPR. It must draw extensively upon the knowledge and experience of staff and managers, and is a common-sense process, but one that has to be carefully managed and facilitated. One of its main features is seeking maximum organisational benefit from the use of advanced information systems. This is frequently called "leveraging" information systems, and may call for specialist assistance.
Michael Hammer and James Champy, the originators of the BPR concept, thought that it should be seen as a journey, involving a change in management and staff attitudes, rather than a destination. BPR is a means for an organisation to evolve radical ways of meeting new challenges, whether they arise from changes in practices and technology, for example the inexorable rise of day surgery in the NHS, or are imposed from outside, such as the regular national shifts of emphasis onto different client groups.
BPR is a cyclical process and involves the following steps:
Examining and resetting organisational goals
Determining the best way of achieving them
Implementing fundamental changes in organisational structures and procedures
Embedding continuous improvement
Re-evaluating organisational goals
When Should BPR Be Used?
Hammer and Champy identified three cases where BPR can be used:
Those who have crashed into a wall and are lying bleeding at the bottom of it;
Those who think that they might have seen a wall approaching in the car headlights;
Those who are out for a drive on a nice sunny day and get out to build a wall for the other guy to crash into!
What Could BPR Achieve?
BPR solutions often involve empowering teams and individuals to act as "case workers". The case worker, or indeed case team, takes responsibility for a client and operates freely across the organisation to organise the goods or services that the client needs - interfacing with the various departments required.
Does this client focus seem familiar to you? In many ways the model suggested by Hammer and Champy, reflects the organisation of a local authority or health trust, for example, in an acute hospital the clinician usually acts as the "case worker" - we do not expect the inpatient to organise their own nursing care, X-rays, pathology tests or meals.
If the social businesses of the public sector are already organised by having case workers or teams responsible for patients and clients, how then can BPR help resolve some of the issues that we currently face?
BPR can address questions such as:
"How can we devolve genuine power and responsibility to communities?"
"How do we set goals for teams and monitor the quality as well as the quantity of their output?"
What can we do to reduce the administrative burden on front line staff to allow them to spend more time in providing services such as teaching, patient care and policing?
"How can we manage the transfer of responsibility for clients between different service arms such as patients between acute, community and GP centred care
"How can we improve cooperation between different bodies responsible for providing services to the same citizen, for example transfers from health to social care or the integration of health, social care and justice bodies in critical areas such as child protection?"
BPR can often facilitate larger performance improvements than other techniques. This is because BPR looks at problem areas as processes, which can stretch across a whole organisation, rather than as a series of discrete tasks that individually are only capable of fine tuning. Frequently the biggest changes come about through changes in attitude and perception; cross departmental and inter-organisational working; and the empowerment of staff closest to the client.
BPR is not an easy option and requires an organisation to commit to both freeing management time for the change process and to funding the changes identified. It could be used radically, turning a whole organisation inside out and making it totally client-centric, but can also be adopted incrementally. This step-by-step approach allows you to define areas critical to performance, for example, ensuring waiting lists are managed to ensure maximum performance, or reorganising referral and assessment procedures to remove delays and duplications, or setting up client driven appointment bookings and reminders.
In the commercial area BPR has often been used in a crude way to reduce headcount. In the public sector this may also be a current issue but in more certain times it is also rather about getting the most from all the resources that you have available, thus improving activity levels or quality.
BPR has to be led from the Chief Executive, with top management committed to the programme of improvement. The level to which improvements in activity, quality and cost will be achieved depends upon two factors:
The starting point - how good is the organisation already at performing key processes?
The will to implement - there can be entrenched attitudes and fear of change at all levels.
One thing is certain, strength of leadership is needed to overcome the human issues. It is often how well these are handled that will decide the balance between a successful and a failed BPR project.
Within any public body there are areas where you will benefit from BPR techniques. If you match your objectives and priorities with your overall service delivery plans you will uncover opportunities to remedy existing problems, avoid potential ones, and build that metaphorical brick wall for the other guy.
Copyright PNC Consulting Ltd 31/3/09
Maintaining and enhancing customer service can be overlooked in the rush to manage the costs of the contact centre, especially in the current, uncertain times. Equipment is installed; agents are trained and motivated but are the business objectives too simplistic and related to only to inputs rather than the outputs needed by the business? This applies equally to contact centres in the public or private sector, and to in-house and outsourced services.
Many organisations give their contact centre staff incentives, or monitor performance based on measures such as speed of answer, in the belief that it will encourage agents to work more quickly, answer more calls and therefore make more sales or answer more customer requests. Could such misplaced incentives and measurements be responsible for truly appalling levels of customer satisfaction with contact centre performance? For example, a study by Citizens Advice last year found that UK energy and phone companies were still providing customers with very poor service, with 81% of gas company customers dissatisfied with their last call, as were an astounding 89% of those calling landline telephone companies.
The fundamental flaw in thinking here lies much deeper than the incentives that are being given, or the way in which staff are working. It lies in not fully understanding the basic business objectives of the organisation, and the planning needed to embed these into contact centre design and operation. The key is for organisations to move their goals outside the management of contact centre inputs in order to understand the bigger picture in terms of the impact on total organisational performance, whether that is profitability or customer satisfaction. Both of these result from knowing who your customers are and what they want; a focus which is often neglected.
Contrary to popular belief, contact centres are not a quick fix solution to sales, customer service or marketing problems, nor should outsourcing equate to passing the buck. Improved long term business results will not be achieved if this is the level of thinking behind implementing or maintaining a contact centre operation. Organisations must be realistic enough to appreciate that a contact centre only offers an infrastructure with the potential to enhance business performance if it is set up and managed in the right way.
The Importance of Differences
It has become increasingly obvious that customer service is an all important differentiator between organisations. This, coupled with the boom in contact centres, has resulted in a large percentage of the general public coming into contact with a contact centre almost every day. Whether buying goods and services, booking a squash court, reporting a hole in the road or making a complaint, the chances are that the caller will be connected to a contact centre.
In order to define 'good' service for remote customers, an organisation must discover exactly what these customers want; establish which needs it is prepared to meet for which types of customers, and the total costs it is prepared to bear in relation to the expected level of return. Once it has established which customer needs are to be met and the standards to be achieved, it can set the levels of resources, people and technology required to meet them.
Setting Contact Centre Goals
Most contact centres set goals in relation to inputs, seeking to reduce costs and improve performance. These are typified by the benchmarking performance indicators adopted by many organisations. For example, measurements commonly used in the contact centre industry are time related, e.g. the percentage of calls answered in ten seconds, the average speed of response or the number of calls abandoned as a result of waiting too long. But are these benchmarks measuring the right areas, and can they really deliver?
Looking at benchmarks in simple terms, it seems to be very logical. Based on inputs, it leads to strategies that either reduce costs or improve input performance. For example, an organisation will calculate the cost of each incoming call and reach the conclusion that call throughput should be increased by reducing the length of each call. Staff costs could also be minimised by having fewer staff handle more calls because of shortening call duration. But is it really as logical as it looks?
To improve the utilisation of both people and technology, an organisation may also look at reducing the rate of calls abandoned, minimising the time taken to answer each call, increasing the number of outbound calls and reducing the number of blocked calls, to name but a few possible approaches.
Businesses taking this stance on contact centre strategies will, no doubt, have the effect of making their contact centre marginally more efficient and economical, but to make a radical difference, it must be made more effective. To do this, organisations must set output goals and then manage the inputs.
For example, travelling salesmen are measured on sales volumes and profitability because the company they represent relies directly on these factors for business success. So, a salesman must aim to sell as many products as he can in a day, rather than just knocking on as many doors as he can. He will achieve his goal if he sells products to five houses by taking the time to explain the merits of his product, rather than rushing around ten houses but failing to close the sales by not illustrating the key selling points due to his haste.
If this ethos is viewed against that in many contact centres, it accurately illustrates where contact centres' benchmarking is misleading. Contact centre agents are invariably measured on the number of calls they answer, how polite they are and whether they worked at the weekend. This is a scale of measurability of inputs not the outcomes of the travelling salesman and doesn't relate directly to the ultimate goals of the organisation, which in the example are sales volumes and profitability.
Organisations utilising contact centres must be aware that if they are measuring agents on quantity, rather than quality, agents are less likely to be providing the customer service on which the organisation prides itself. It is imperative therefore, that a business invests time and energy in planning the use of a contact centre. It must aim to motivate, train and measure agents based on what the business is striving to achieve, and not rely on just measuring call statistics.
An organisation must identify its business objectives and use these to plan its contact centre strategy. These must be tangible ones that can be measured, thereby discounting vague principles such as increasing shareholder value or improving contact centres. Once these objectives have been clarified, an organisation can begin to plan or manage an effective contact centre operation designed to meet these needs.
With measurable goals, an organisation can begin to devise the best ways of deploying technology and training, motivating agents, and measuring the success of staff based on the quality of customer contact outcome, rather than quantity.
Contact centres are frequently used by organisations to cut costs, but this idea can back fire without adequate time and planning. Agents must be fully trained in the products or services, skilled at using hands and an ear simultaneously, possess a responsive and helpful telephone manner and, because of the repetitive nature of the work, be correctly motivated and supported. If a company overlooks these fundamental prerequisites, it won't be enhancing customer service - merely frustrating and angering the caller.
Along with the right people must be the right technology, carefully selected to facilitate agents' work and used to maximum advantage, along with efficient processes that help rather than hinder the operation. This technology must be well-designed, implemented and monitored. Without these, an organisation may well be cutting overheads, but it is risking losing its customers too.
Advanced customer communication lies in the hands of those people interfacing with your customers. Contact centre agents are often the first point of contact for many customers, and the old adage about first impressions certainly rings true in a business environment. Contact centre staff represent an organisation. The way people are organised, their skills, product knowledge and attitudes are vital and must not be overlooked. These attributes must be combined to meet business objectives, again, something that will be included in a performance analysis, enabling the strengths required to be identified and matched with available skills.
Advanced communication with customers also relies on technology. An agent has limited time during a phone call, and can only work effectively if the correct technology is installed, for example a system response time could be acceptable for an internal computer system may far too slow if deployed to support agents whilst handling a call and result in a poor call outcome. A business must first assess its needs and look at the impact technology will have on the business, instead of being blinded by jargon and bowing to the many vendors who will claim that their technology is the answer, whatever the real problem. The bottom line is that technology must facilitate agents' work, improve effectiveness and give a better outcome for the caller and the organisation. This can only be done if businesses can first identify their overall business goals and translate these into a detailed set of requirements.
Where to Start
Undertaking a performance analysis for your contact centre starts by ensuring that objectives are clearly defined, shared and understood. The three key elements of success; planning, people, and technologies must be driven, primarily by the business objectives that result from such an analysis. These elements must then be combined through an integrated approach to ensure that your customer management strategy is well developed and managed in order to achieve the ultimate goal, keeping one step ahead.
Copyright PNC Consulting Ltd 31/3/09
The Thinking CEO in an article by Lynda Purser, head of the Institute of Business Consulting (a part of the Chartered Management Institute) and David Moorhouse of Moorhouse Consulting cites the Cabinet Office research into the relationship between consultancy and competitiveness, as having recognised that given the number of consultancy projects which fail to live up to expectation, procurement will increasingly attract attention.
The researchers are quoted as believing that professional credentials are only part of the answer to poor procurement outcomes. They believe it is also crucial for clients to engage more effectively with consultants throughout the project, and to develop more sophisticated procurement techniques and processes.
From time to time, most organisations have felt the need of a little outside help. Sometimes this is because there is not the expertise in house, or maybe there is expertise but not enough time. Today, as the Cabinet Office research shows the old ways of buying in that help, typically from brand name consultancies and, in the public sector at least, via rigid framework contracts, are broken. They may still work when you need to focus on large transnational teams, but otherwise they mean that both companies and public authorities:
1. Pay over the odds, often paying more for a day from a very junior consultant than they do for a day from their own Chief Executive
2. Get tied into long term delivery contracts paying high level advisor rates to do detailed delivery work
3. Experience significant delays because of procurement rules
4. Are often paying expenses that would even make an MP blush
The current economic situation means that most budgets are increasingly being tightened and that you have to get the most output from every pound spent and you have to be able to react quickly. It also means that the balance of power has swung from the suppliers to the purchaser. You now have much more choice of expert resources available to you than ever before and, through the Internet, much better access to information about those resources.
The three key factors that have most influence over obtaining that elusive best value are:
Setting out Clear, Realistic and Well Specified Deliverables
With a close understanding of the types of problems that you are facing, it may be possible to sharpen and clarify initial briefs to get more focused results or to adopt different types of strategy, for example, delaying specifying deliverables until information is clearer by splitting the work into different phases. This often also means that you can move away from a single big procurement that is complex to negotiate, contains high levels of risk and can trigger all sorts of policy and legislative barriers and delays, into a series of smaller, inherently more controllable support arrangements.
Balancing risk and cost in your procurement approach
How this vital, and usually overlooked, factor works can be seen in two examples. In the first, you may insufficient knowledge in the organisation to supervise a subject matter expert and need to rely on the supplier to do so. In the second, you have the time and skills to supervise a consultant but insufficient time available to undertake the work internally. Understanding this could lead you to select a procurement route to a consultancy in the first case but to an interim agency or an independent in the second.
Appropriate Management Arrangements
Having agreed the scope of the work, selected and contracted the external support it is necessary to ensure that you have appropriate controls over the delivery process. These will vary according to the source of the support. If you are being supported by a major consultancy different controls and remedies will be appropriate to those required for an agency sourced contractor or an independent.
What should you do now?
Order a review your current use of external help without delay:
Consider how much of your budget are you spending or planning to spend on outside help
Review how they are delivering to time, cost and quality
For each contract ask yourself Is there a way to do this that is cheaper and at least as effective and how quickly can we move to it
Ensure all procurements currently underway have arrangements for ensuring best value put in place before they are signed off
Make sure that you have set up mechanisms for transferring in knowledge and skills to your staff and for monitoring that the desired transfer has happened