Process Simplification for RPA - PMI · SIPOC helps you learn about the process, its components and linkages to other processes SIPOCs can be created in a brainstorming session, diagramming

Process Simplification for RPAFrom complex to simple processes as a pre-requisite for process automation and implementing AI

23 November 2018

PM Day 2018 Workshop

Typical Application of RPA to Business Processes

• Data extracts from IT systems, scanned documents, PDFs, other formats (screen scraping, OCR – optical character recognition)

• Data transfer and entry (migrate information from files, formats e.g. CSV)

• Regular report preparation and sharing (auto-generate reports, analyze contents and based on the contents, email them to stakeholders)

• Quote-to-cash (sales operations processes >> send invoices earlier –pay earlier)

• Procure-to-pay (extracting invoice and payment data from multiple systems and integrating information via RPA)

• Customer onboarding (customers start using the product after purchase / sign up, loading customer profile and preferences, detailed billing data)

• Mass emails (get data from multiple systems and send, regular emails –electronic utilities bills)

https://blog.appliedai.com/robotic-process-automation-use-cases/#common-business-processes

https://www.geekwire.com/2018/week-geek-podcast-common-sense-ai-amazon-takes-google-smart-home/

Typical Application of RPA to Functions

Sales

• Create and deliver invoices, CRM updates

Customer service

• Updated customer profile and preferences

• Billing data

• Resolving basic customer issues

Finance

• FP&A activities

• Reconciliations

• P&L preparation

Tech support

• Diagnostics

• Regular testing

• Software installations

• Automated tools for employees / customers

HR

• Payroll

• Absence management

• Employee data management

Insurance

• Claims processing

https://www.geekwire.com/2018/week-geek-podcast-common-sense-ai-amazon-takes-google-smart-home/

RPA Enablers and Challenges

Enablers

• Standardized and streamlined business processes

• Change management capability

• Business model and strategy to drive standardization and efficiency

Challenges

• Complex processes: inconsistent and non-standard business processes

• Underestimating the amount of change to deliver on digital transformation

• Lack of leadership strategy for process standardization and automation

Process Simplification

Focus improvement efforts on process simplification

• Use of quality methods (Lean Six Sigma) to drive process simplification

• Automation of simplified processes

• Pre-requisite for implementing RPA (robotic process automation)

From this… …to this:

Use of Lean Six Sigma quality methods for process simplification

http://clas.mq.edu.au/speech/synthesis/basic_programming/index.html

https://www.researchgate.net/figure/Flowchart-of-risk-assessment-for-construction-of-mountain-tunnels_fig4_283006195

3. AnalyzeIdentify the root cause

1. DefineDescribe the problem

4. ImproveSelect the best solution

5. ControlSustain the gains

2. MeasureCollect baseline data

Run Chart

Pareto Chart

Solution

Implementation

Statistical

Process Control

Sustainability & benefits

Analysis and Selection of

SolutionCause & Effect Diagram

Process

Map

ProjectCharter

Voice of the

Customer

Surveys and

data

Project

handover to

operations

Critical To Quality Tree

Measurement System Analysis

Risk Assessment

Summary

Statistics

▪ Pareto Chart

▪ Run Chart

▪ Cause and Effect

▪ Scatter Diagram

▪ Value Analysis

▪ CTQ Metrics

▪ MSA

▪ Summary Statistics

▪ Process Capability

▪ Control Chart

▪ Project Selection

▪ Project Charter

▪ VOC

▪ Define the Problem

▪ Map the process

▪ Brainstorming

▪ Benchmarking

▪ Force Field Analysis

▪ Criteria Test

▪ FMEA

▪ Statistical Process

Control

▪ Control Plan

▪ Cost-Benefit Analysis

▪ Mistake Proofing

Identify the

opportunity

Identify the output

measures (y’s)

Identify the inputs

(x’s) and value

adding steps

Optimise

the process

Process control

and sustain the gains

Lean Six Sigma Process Simplification Roadmap

Process Simplification Strategy

1. Problemstatement

2. Voice of the Customer

3. Process mapping

4. SIPOC diagram

5. Pareto diagram

6. Metrics definition

What is the problem you are trying to solve? (e.g. process too complex, takes too much time to complete, multiple errors)

Confirm primary purpose of the process – what should the process produce as OUTPUT (e.g. a list of numbers, a report,

a graph)

Check user requirements about the desired OUTPUT (e.g. level of detail, timeliness, delivery mode)

Identify and remove all waste in the processes – process steps that do not add value and make the processes complex (double processing, unnecessary approvals, too many details, waiting)

Prioritize simplification efforts and impact

Use KPIs to measure business impact

Case study

Case Study Description

Background In Sales Operations department of a European furniture production company, there is a regular weekly report of sales volumes in country X. Customers of report: Head of Sales in country X, Country Managing Director, account managers

Timeline Report is due every Monday 10.00 for previous week data on sales volumes

Delivery mode Report is sent by email to all customers

Data sources IT system extract (data available at 9.00 on Mondays) and two Excel files (uploaded by Friday EOB on a sharepoint site by a staff member - Tim)

Roles and Responsibilities

Report is produced by three staff members – extracting the data from IT system (Billy), uploading 2 Excel files on sharepoint (Tim), merging data, data restructuring and dissemination (Anna)

Current issues 1. Delays - (report is delivered by 10.00 in only 75% of cases, between 11.00 and 12.00 in 20% of cases, after 12.00 - 5%)2. accuracy – report contains errors (68 errors for the previous month) - leads to requests to double check, amend errors and resend

Customer feedback: Customers unhappy that the report is delivered later than the time agreed and has errors

Handout 1

Tool 1: Problem Statement

A problem statement should:• State how big is the problem

• Show data to support the statement that we have a problem

• Demonstrate how it is measured

• Contain quantifiable information about the problem and its impact on customers

A problem statement should not:• Share an opinion about what is wrong

• Describe the cause of the problem

• Assign blame or responsibility for the problem

• Recommend or prescribe a solution

1. Problemstatement


Case Study: Describe the problem and the business impact

……………………………………………………………………………………………

……………………………………………………………………………………………

……………………………………………………………………………………………

……………………………………………………………………………………………

1. Problemstatement

Handout 2


Case Study: Describe the problem and the business impact

1. Problemstatement

The regular weekly report of sales volumes in country X has been consistently delayed (only submitted on time in 75% of cases). It also contains errors (68 errors reported last month) which has led to multiple edits and resubmissions.

Tool 2: Using Voice of the Customer

Proactive and consistent feedback

▪ Foundational concept in quality programs▪ VOC methods: - Surveys via telephone, mail, email, or online

- Focus groups in person or online

- Interviews

- Beta or user testing

- Feedback forms

- Customer complaints

- Social media or site interaction

- Reviews

12



VOC helps formulate Critical to Quality (CTQ) characteristics that are the major drivers of quality within an organization or process

Why identify CTQs? • Key characteristics that can be measured• Critical to narrow and focus work scope• CTQs are factors that drive 80% of customer satisfaction• Helps create the most improvements possible within the

available resources• Managing a few critical metrics helps ensure excellent output

Customer Need

Driver

Requirement

Requirement

Driver Requirement



Customer Need

Driver

Requirement

Requirement

Driver Requirement

14

Translate Voice of the customer feedback into specific and measurable requirements

Critical to Quality (CTQ) Diagram


15

Report received on time and accurate

Report is accurate

Report has few to errors

(95% of submissions)

No report resubmissions required


Report is received on time

Report is received by10.00 on Mondays



Case study: CTQ Tree Customer

Need

Driver

Requirement

Requirement

Driver Requirement


Tool 3: Process Maps

Benefits of using Process maps

• identifying any disconnected steps in a process

• identifying and clarifying any responsibilities and relationships

• identifying non value-added activities

• isolating process bottlenecks

• discovering opportunities for improvement

• determining corrective actions

3. Process mapping

Tool 3: Process Maps

Case Study: Process Map

3. Process mapping

Sales Volumes Weekly Report Production and Dissemination

IT s

yste

m (

Bill

y)Ex

cel f

iles

(Tim

)A

nn

aC

ust

om

ers

Phase

Start

IT system download Send data extract o

Anna

Excel files uploaded on sharepoint

Anna receives input from Billy

Download the Excel files

Consolidate all three inputs

Restructure & edit volume data

Finalize report

Send to end customers

Report correct

No

Do additional checks, edit and

resendEnd

Yes End

Handout 3

Tool 4: Using SIPOC diagram

Suppliers Inputs Process Outputs Customers

18

SIPOC helps you learn about the process, its components and linkages to other processes

SIPOCs can be created in a brainstorming session, diagramming takes team effort and analysis to complete. Done by project team, including SMEs and process owner. Level of detail varies from detailed level to high level process.

4. SIPOCdiagram


19

Creating a SIPOC Diagram

Step 1: Create Process flow

Step 2: Set Boundaries and Name Your Process

Step 3: Complete Process flow

• Name Outputs and Customers

• Name Inputs and Suppliers

Step 4: Validate the Information

4. SIPOCdiagram


Case Study: Develop a SIPOC diagram

20

Suppliers Inputs Major Process Steps Outputs Customers

1. Department X

2. Tim

3. Anna

4. Anna

5. Anna

1. IT system upload

2.

3.

4. Consolidated file

5.

1. IT system download

2. Excel files download

3. Consolidate all inputs

4. Restructure and edit

5. Send to customers

1. Excel file

2. Excel files (x2)

3.

4.

5. Volume report

1. Anna

2. Anna

3.

4. Anna

5.

4. SIPOCdiagram

Handout 4


Case Study: Develop a SIPOC diagram

21

Suppliers Inputs Major Process Steps Outputs Customers

1. Department X

2. Tim

3. Anna

4. Anna

5. Anna

1. IT system upload

2. Excel file (x2)

3. IT system download and Excel files4. Consolidated file

5. Volume report

1. IT system download

2. Excel files download

3. Consolidate all inputs

4. Restructure and edit

5. Send to customers

1. Excel file

2. Excel files (x2)

3. One consolidated file

4. Volume report

5. Volume report

1. Anna

2. Anna

3. Anna

4. Anna

5. End Customers

4. SIPOCdiagram

Tool 5: Using a Pareto Chart

A special type of bar chart where the values are plotted in descending order

The Pareto chart is based on the Pareto principle or the 80/20 concept >> that 80% of the effects come from 20% of the causes.

The Pareto chart is a very reliable way to identify the sources within a process that create the highest number of defects.

The Pareto chart is useful when the problem with a business process, product, or service can be categorized >> analyzing non-numerical data, such as the types of causes of a problem.

The Pareto chart can be used to determine what the key causes of the problem are, and this allows you to scope the project so you're focusing on those areas.

5. Pareto diagram

Pareto example

23


• 80 % of defects are caused by the top three categories• Need to focus on these first to make the most impact

5. Pareto diagram

http://erkal.jonathandedecker.com/pareto-chart-example/


Steps for building a Pareto chart

• List all of the causes of the defects in descending order

• Calculate the cumulative percentage of defects

• Add the axes, numerical scale, bars, and categories

• Plot the cumulative frequency of defects

• Prioritize the vital few

5. Pareto diagram


Case study: Types of errors (count of errors per month)

5. Pareto diagram

Type of error Count

Duplicate numbers 29

Missing numbers 6

Wrong calculation (formulas wrong) 23

Numbers don’t reconcile across the three inputs 10


Case study: Types of errors (count of errors per month )

5. Pareto diagram

Tool 6: Using Metrics

Measures are used to quantify the success factors and benefits realisation (efficiency and effectiveness)

• Moving from problem statement to goals and objectives, we need to identify the project metrics

• What is to be measured should be quantitative, should relate directly back to specific project requirements, and should be something that is important to the customer (Voice of the Customer feedback)

• Goals should be measureable, so that at the end of the project we know if we have achieved the desired results in terms of efficiency and effectiveness (e.g. Goal 1 >> KBI 1)



Primary Metrics

• Can be directly observed and influenced

• Link between metric and objectives

Example: delivery times

Secondary Metrics

• Influence the primary metrics that you can not directly observe

• Example: customer satisfaction

Balancing Metrics

• The negative side effects of the improvement

• Example: increased delivery times may increase transportationand labor costs


How do we know that a change will lead to an improvement?


Primary Metrics

• KBI 1

• KBI 2

Secondary Metrics

• KBI 1.1

• KBI 1.2

Balancing Metrics

• KBI 1



Handout 5


Primary Metrics

• 1. Improveaccuracy for the report (68 errors per month to max 6 errors: 90+ % improvement)

• 2. Improve timeliness of the report (from 75% to min 95%)

Secondary Metrics

• 1.1. Reduce and eliminate duplicate numbers in inputs (from 29 to max 1)

• 1.2. Reduce and eliminate wrong formulas (from 23 to max 1)

Balancing Metrics

• Increased delays in report submission



Define the Project Simplification Scope

Tips for Scoping LSS projects

• Address the source of the problem

• Focus on one or few problems only

• Set realistic objectives

• Collect input from stakeholders

• Realistic budget estimate

Best practices

• Determine the impact other projects may have on your project

• Set clear objectives and KBIs

• Focus on critical business issues

• Set clear start and end points

• Write a precise and concise scope

Project Charter

Gives the team and the organization an idea of what is involved in the project

• business case ("why should we do this project?”)

• problem statement (“what is the problem we are trying to solve and its impact?”)

• project scope (“what should and should not be included in the project?” )

• goal statement (”what is the anticipated results from the process improvement efforts?”)

• key deliverables (roadmap for the team and estimations of completion date)

• required resources

• roles and responsibilities

Define the Project Simplification Scope

Causes of scope creepMove outside of the processes that you are targeting

Be careful not to add in extra deliverables, requirements, or process steps (extend time and lose focus)

• Scope is focusing on a bigger issue

Reasons: not a good problem statement, leadership expects too much

• Scope is too narrow or too broad

Reasons:

Too narrow – looking at a subset of a process (only improve part of it)

Too broad – may miss the root cause of the problem (may overwhelm the project team, and lead to unrealistic expectations)

Review your project scope

Back-up Slides

3. AnalyzeIdentify the root cause

1. DefineDescribe the problem

4. ImproveSelect the best solution

5. ControlSustain the gains

2. MeasureCollect baseline data

▪ Pareto Chart

▪ Run Chart

▪ Cause and Effect

▪ Scatter Diagram

▪ Value Analysis

▪ CTQ Metrics

▪ MSA

▪ Summary Statistics

▪ Process Capability

▪ Control Chart

▪ Project Selection

▪ Project Charter

▪ VOC

▪ Define the Problem

▪ Map the process

▪ Brainstorming

▪ Benchmarking

▪ Force Field Analysis

▪ Criteria Test

▪ FMEA

▪ Statistical Process

Control

▪ Control Plan

▪ Cost-Benefit Analysis

▪ Mistake Proofing

Identify the

opportunity

Identify the output

measures (y’s)

Identify the inputs

(x’s) and value

adding steps

Optimise

the process

Process control

and sustain the gains

▪ Identify Project, Champion and Project Owner

▪ Determine Customer Requirements and CTQs

▪ Define Problem, Objective, Goals and Benefits

▪ Define Stakeholder/Resource Analysis

▪ Map the Process▪ Develop Project Plan

▪ Determine Critical Xs and Ys

▪ Determine Operational Definitions

▪ Establish Performance Standards

▪ Develop Data Collection and Sampling Plan

▪ Validate the Measurements

▪ Measurement Systems Analysis

▪ Determine Process Capability and Baseline

▪ Benchmark the Process or Product

▪ Establish Causal Relationships Using Data

▪ Analysis of the Process Map

▪ Determine Root Cause(s) Using Data

▪ Design of Experiments

▪ Develop Solution Alternatives

▪ Assess Risks and Benefits of Solution Alternatives

▪ Validate Solution using a Pilot

▪ Implement Solution▪ Determine Solution

effectiveness using Data

▪ Statistical Process Control

▪ Determine Needed Controls (measurement, design, etc.)

▪ Implement and Validate Controls

▪ Develop Transfer Plan

▪ Realize Benefits of Implementing Solution

▪ Close Project and Communicate Result

Process Simplification Roadmap

Lean Six SigmaProcess Simplification Tools

Process Flow for achieving 70%+ Improvement

Champion

Black Belt

Team

Select project that is critical to operational success

Set up team and follow DMAIC roadmap

Baseline performance and monitor results

Understand root cause of problem

Develop solutions, complete benefit and risk assessment

Review and approve solutions

Validate Solution

Implement and standardize process changes

Authorize process change

Define financial benefit

Communicate results, train and ensure sustainability

Six Sigma Process for ensuring breakthrough changes

Documents

Process Simplification for RPA - PMI · SIPOC helps you learn about the process, its components and linkages to other processes SIPOCs can be created in a brainstorming session, diagramming