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PROCESS ENGINEERING & MIGRATIONS
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AAA
Business Process Transitions & Reengineering
AAA
Business Process Transitions & Reengineering
2
Critical Success Factors for Migration
•Mobilising joint project team•Preparing and delivering the appropriate training•Constant communication
•Selecting the right processes•Re-engineering the process for remote working•Delivering continuous improvement post migration
•Developing and testing an effective technical solution•Thorough testing pre migration•Full BCP/DRP
•Strong executive sponsorship•Structured outsourcing methodology •Partnership model with customer•Accelerated migration for greater benefits
•Consistent service delivery•Stakeholder management•Process improvements for “discontinuous benefits”•Constant monitoring of performance to effect mid-course corrections
AAA Business Services advocates accelerated migration for greatest benefits to the customer. The right people, processes, systems, strategy and a strategic sourcing partnership based on commercial disciplines are essential for successful migration.
AAA Business Services advocates accelerated migration for greatest benefits to the customer. The right people, processes, systems, strategy and a strategic sourcing partnership based on commercial disciplines are essential for successful migration.
Ongoing Perfromance
Strategy
Technology
Process
People
3
From Concept to Delivery…..
Feasibility Study
MigrationService Delivery
• Identification of outsourcing opportunities
• Detailed Operations, IT, Financial feasibility
• Training of personnel and IT implementation
• Monitoring performance and ongoing process improvements
Opportunity Identificatio
n
AAA Sales Pitch to
Customer &
outsourcing concept
Identify processes
that can be out-
sourced at a high
level and the need to
be examined further
Sign -off for Feasibility
Study/Solution Design
stage
Detailed analysis of
processes and
interdependencies Process Mapping Technology linkage
Proof of Concept Firm costs, savings
& Benefit estimation Sign off for Migration
Design Operating
Model Training of AAA
personnel on client
processes Implementation of
technology
infrastructure for
remote processing Validation of Process &
Productivity metrics. Service Level
Agreement
BAU at AAA.
Process is monitored
on the basis of
customer defined
Service levels
Customer Feedback
Ongoing process
improvements at AAA
Ongoing training and
knowledge
management
BSG Project Manager+ IT
Project Manager + IT
Project +Operations Manager
Process Owner + Project Manager
Operations Manager
Process Owner
BD + BSG Biz Leaders/ AAA
Relationship
AAA
Client
Stages
Activities
Involvement
4 – 6 months
4
Executive sponsorship and stakeholder involvement ensure successful and rapid migration
Strategic Partnership
Company-wide SponsorCompany-wide Sponsor
Steering Group (Joint Team)Steering Group (Joint Team)Decides business requirementsDecides business requirements
Strategic Considerations
Migration Methodolo
gy
TacticalConsiderations
Departmental Resources
ProjectManager
CentralProject Team
Champions and Business Facilitator
AAA Transition Resources
Functional Experts - Training, IT
Scoping Design
Implementation Delivery
AAA Operations TeamDay to day operations
Management TeamManagement Team
SLAReviews
Continuosimprovement
5
Analysing Processes
Complexity Extent of manual calculations Definitive work procedures/ rule sets Number of variations to standard process Extent of supervisor/ technical expert involvement Time criticality Business Risk
Complexity Extent of manual calculations Definitive work procedures/ rule sets Number of variations to standard process Extent of supervisor/ technical expert involvement Time criticality Business RiskHandoffs Extent of interaction with external parties
(agents/customer) Number of output documents generated Need to refer to offline/physical documents (internal/
external)
Handoffs Extent of interaction with external parties
(agents/customer) Number of output documents generated Need to refer to offline/physical documents (internal/
external)
Training effort Training time to reach competence and full
productivity Availability of talent
Training effort Training time to reach competence and full
productivity Availability of talentTechnology & systems availability Type of system used (mainframe, client/server)
Bandwidth requirements Hours of access
Technology & systems availability Type of system used (mainframe, client/server)
Bandwidth requirements Hours of access
Savings potential Number of FTEs Volumes
Savings potential Number of FTEs Volumes
Indicative list of criteria to be scored against
1
2
3
4
5
Opportunities can be identified at various levels
Opportunities can be identified at various levels
Money
Claims
Enterprise
Level 0
FunctionLevel 1
ProcessLevel 2
Sub-process
Level 3
TaskLevel 4
AAA AAA
Customer Services
Customer Services
Policy Servicing
Corporate, SME and Personal
• Increase premium
•Reinstatement
•Annual single premium
•Transfer value
•Pay invoices
•Set up cases
•Changes to static details
•Medical referrals
Examples
•Process-centric organisation
structures facilitate easier
migration than product-centric
organisations structures
•Product-centric structures normally
involve several sub-systems and
sub-processes, leading to
heightened complexity
•For e.g. in PPP, over XX% of the
claims will be processed at AAA by
XXXX and only a small percentage in
AAA SL
6
Re-designing Processes to Facilitate Migration
Invoice sent by Garage
Check invoice against AMECS
No
Yes
Yes
Pass Invoice to Engineers Assistant
Check with
Engineer
Does invoice
meet rules
Send Back to Garage
Contact Garage
Discuss with Garage
Issue resolve
d
Pay Invoice
No
Yes
No
Send Invoice to IM Site
Payment ProcessUpdate Diary at
all stages
and Systems
on payment
AS - IS process map
To - Be process map - post migration
Invoice sent by Garage
Check Invoice against AMECS
No 25%
Yes 75 %Does invoice
meet rules
Pay Invoice
Send Invoice to
IM Site
Payment Process
Invoice Scanned to AAA
AAASupport
TeamYes
Pass Invoice to Engineers Assistant
Check with
Engineer
Send Back to Garage
Contact Garage
Discuss with
Garage
Issue resolved
No
Yes
NoUpdate
Diary at all stages and
Systems on
payment
Op Co Process
AAA ProcessSupport Team in Op Co process
Defining Procedures and Protocols to Manage and Control the Offshore Location As Part of the “To Be” Operating Framework.
Outgoing Correspondence • Print Customer / Adviser
correspondence• Collate and Envelope• Mail out
Print requirement sentData Centre
Offshore CS Admin
Image Server
Incoming Correspondence
Mail/Fax
Mail Room
Scanning
Registration
Processing System
Image Server(Filenet)
Workflow Server
CSR completes predetermined handoffs and exceptions from offshore
Contact between Adviser and Offshore CSR via Adviser MemoAdviser
Offshore CSR uses onshore systems for work allocation and product system access
Remote CSR accesses local offshore image server for images
Handoffs from Offshore to Onshore CSR via workflow system
• Monitor exception percentages
• Monitor Quality• Maintain and update
Knowledge Management
• Maintain and update training materials
Onshore CS Admin,
Onshore Customer Service Activities AAA
Onshore Remote Site Support Team
Images sent daily - prior to the start of processing in Bangalore each day
• Adviser has contact with offshore CSR via Adviser memo.
Onshore Systems Offshore Systems
Contact between Onshore Support and Offshore CSR via email/phone
Work Tracking System
Allotment of work to individual processors
Client AAA Business Services
• Identify exceptions• Assign Work flow code that
identifies item as a Bangalore Handoff
• Log exception to Onshore CS via workflow system
• Process non-exception items• Handle follow-ups• Communicate with Adviser via
Adviser memo if necessary• Communicate with Onshore
support team• Access Knowledge
Management and Training materials
Queuing
8
Indicative Costs and Benefits
Year 0
Year 1
Year N
Recurring Annual Benefits
Set-up Costs
NPV @ 15%
Payback Typically 12-18 months
Typically discounted over 5 years
Process improvements can cause non-proportional increase in recurring benefits
Net recurring annual benefits, including non-payroll cost savings, are in the region of 40-50%
*Some costs are semi-fixed, most notably property, and savings in these cost categories may only be achieved after 1-2 years if migration size is small
Recurring Annual Benefits•Payroll cost saving (management & staff)•Non payroll cost savings (IT, property, o/h)•Recruitment & Training cost savings
Set-up Costs• Project team (Op Co & AAA)• IT costs (application development costs, hardware, licences)• Telecom costs (bandwidth & firewall installation)• Accommodation and travel (project team, trainers, trainees)• Parallel running costs
Recurring Annual Costs•AAA FTE cost •Support Team Cost•Bandwidth Cost
9
Service Delivery - Continuous Improvement
Typical 3 Phase evolution from Service Delivery to Excellence
* Indicates typical time at each stage
Phase I (3-6 Months *)
Stabilisation•Stabilise process•Capture
Immediate Savings
•Build operational relationship
Standardisation•Develop
procedures jointly with business
•Strong Value Add•Efficiency gains &
benchmarking e.g. automation
Continuos improvement
•Further standardisation of procedures
•Cross training to gain operational flexibility and cost efficiency
•Generate value added MIS for the business
•Significant cost saves from higher efficiency
Phase II (6-12 Months *)
Phase III (12-18 Months *)
Continuos Continuos ImprovementImprovement
Management
sponsorship & focus
Resource manageme
nt
Measurement, analysis
& improveme
nt
Iterative developme
nt
10
Success Stories
Customer – AAA Life, India
Objective – To undertake a feasibility study across all AAA Life Operations departments to identify
processes that can be migrated to AAA Business Services and to develop a business case for each feasible opportunity with an overall migration roadmap. Also, to provide Project Management expertise and assist AAA Life in migrating the identified processes.
Approach – 2 Senior Associates from BSG worked jointly with the Operations Improvement Project
Team of AAA Life. Using BSG’s process evaluation and reengineering methodology and tools, the team not only delivered on all the initial project objectives, but also facilitated knowledge transfer to AAA Life team members.
Monetary Benefits for the Customer – The project delivered a capacity of 91 FTEs at AAAL
translating to an annual saving potential of £ 1.46 million from 2003 with break even in 2003.
Customer – AAA Dubai & Middle East
Objective – To conduct an organisation-wide feasibility study across the AAA operations in Australia
and New Zealand for migration of Adviser and Customer Service processes to AAA Business Services
Approach – Formed a joint project team consisting of a Senior Associate from BSG, AAA ANZ and
Accenture resources. Assessed migratability of processes, designed the operating model for integration of migrated processes with the upstream and downstream activities left at the client location by using AAA Business Services’ robust re-engineering and migration methodology and toolkit.
Benefits for the Customer – Prepared a comprehensive migration schedule encompassing 320
FTEs delivering an estimated benefit of AUD 8.4 million. Conducted pilot migration exercise for 41 FTEs, within 87% of the program budget demonstrating significant quality and process improvements.
11
BSG in Action » AAA Life – Migrations
Process Migration Approach “Pull” Approach
Project team comprised members from AAA, India and AAA Life, Dubai
Structured migration approach using standardized tool-kit
Benefits – 116 FTEs in AAA ( net 91 FTEs savings at AAAL)
Annual savings of £ 1.46 million for AAA Life
Life Business processing vertical at AAA created
Consolidation of processes enabling knowledge sharing among AAA group companies viz. AAA L & AAA ANZ
Robust Methodology
Feasibility Migration
Define Scope Generate criteria Evaluate process Determine
operations, IT and financial feasibility
Map “As-is” process
Benefits sign-off
Preparation Re-engineer
process Map “To-be”
process Prepare training
manuals IT implementation
Training in Dubai/ India
“Train the trainers” Conduct accreditation
for India trainees Train new hires in India Conduct accreditation
for new hires
Parallel Run Parallel
processing Stabilize process Process Ramp
Down in Dubai
$
Service Delivery
Stabilized processes Business- As- Usual
12
BSG in Action » AAA Life – Process Re-Engineering exampleDepartment – Group Money Purchase Process – GPP New Business Quotes
New Process – “TO-BE” (simplified)
Existing Process – “AS-IS” (simplified)
Impact Higher productivity as processing unit-time reduced by 29 % from 35 to 25 mins
Faster turnaround as dependency on a Specialist relationship team eliminated
Smoother workflow as dependency on physical files eliminated
Re-Engineering initiatives Creation of database to hold
“specials” information
Data Digitisation
New Business Quotes request received at AAA
L
Check physical files for any “specials”
Verify information
from Relationship
teams
Process case as required
Prepare Quote and
correspondence letter
New Business Quotes request received at AAA
L
Scan the request to AAA
At AAA, Open database to
fetch “specials” details
At AAA, Process case as required
At AAA, Prepare Quote
and correspondence
letter
S E
S E
Thank You
Helping AAA in “setting the high standards in our business”
Helping AAA in “setting the high standards in our business”