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Operational Excellence Services Operational Excellence Services Presentation Transcript

  • Operational Excellence Services 2006 – WCBF Conference Mike Cook Tom Angelone OES Operational Excellence Services
  • Overview Fidelity Investments is one of the world’s largest providers of financial services. Largest provider of retirement savings plans (401(k), 403(b) Institutional Retirement 2 nd largest discount brokerage firm Provides human resources and benefits outsourcing services Retail / Brokerage About Fidelity Investments Fidelity Investments is headquartered in Boston, MA with 37,000 employees worldwide and is one of the world's largest providers of financial services, with custodied assets of more than $2.5 trillion , including managed assets of over $1.2 trillion as of February 28, 2006. Fidelity offers investment management, retirement planning, brokerage, and human resources and benefits outsourcing services to more than 21 million individuals and institutions as well as through 5,500 financial intermediary firms . The firm is the largest mutual fund company in the United States, the No. 1 provider of workplace retirement savings plans, one of the largest mutual fund supermarkets and a leading online brokerage firm.
  • Operational Excellence Services is an internal consulting organization that resolves challenging global business problems with custom solutions.
    • Serves as partners for business transformation.
    • Provides a full line of consulting service offerings with the primary focus on improving operational and organizational effectiveness.
    • Delivers value by enabling fact based, data driven business solutions.
    • Provides an objective perspective, enabling aggressive improvement by breaking down institutional paradigms.
    • Enables richer solutions, organizational ownership, and transfer of knowledge to business partner teams.
    Operational Excellence Services - OES Data-driven Team-based Results Chartered in 2002, OES ….
  • OES – Service Offerings OES provides a full line of consulting service offerings with the primary focus on improving operational effectiveness and……
    • Performance assessment
    • Process analysis / benchmarking
    • Process design & reengineering
    • Benchmarking
    • Opportunity identification
    • Prioritization
    • Business case development
    • Benefits realization plan
    Service Offerings Operating Model Dev Off-shoring Quality Systems Operations Improvement Performance Mgmt
    • Business strategy alignment
    • Operating strategy dev
    • Operating model definition
    • Operating model development
    • Strategy alignment
    • Business drivers
    • Balance scorecard / metric definition
    • Measurement framework development
    • Demand flow
    • Capacity mgmt
    • Performance standards
    • Operations mgmt training
    • Short interval management
    • Operations performance coaching
    • Quality assessment
    • Quality strategy
    • Assurance - defect prevention
    • Control – statistical prediction
    • Quality metrics
    • Education
    • Organizational assessment
    • Org design / alignment
    • Skills assessment
    • Core competency analysis
    • Change management
    • Outsourcing / shared service analysis
    • Functional decomposition
    • Opportunity identification
    • Solution design
    • Business case development
    • Migration prep
    Organization Design & Alignment …… delivering value by enabling fact based, data driven business solutions with an objective perspective. Operations Consulting
  • Enabling Operational Excellence within Fidelity --- OES Service Offerings --- OES – Vision “ OES provides measurable value to Fidelity and it’s customers in a partnering relationship by enabling fact based, data driven business solutions with an objective perspective.” Value Chain Change – Driving transformational change in terms of the role and function a business unit plays within a broader value chain or company context. Operating Model Change – Driving strategic change and significant performance improvements across an entire business unit encompassing multiple capabilities and processes. End to End Process Change – Driving performance improvements around an end-to-end process contained within a business unit and possibly extending to suppliers and customers. Departmental Change – Tactical change focused within a department or area. Magnitude of Change / Risk Value End to End Process Operating Model Departmental Value Chain Business Transformation
  • Level of Support OES Business Unit Facilitated OES Led BU Led Progression over time to develop new capabilities & skills An OES objective is to collaborate with and enable Business Units to develop new capabilities and skills over time through complete knowledge transfer. OES – Collaboration and Engagement Model OES and Business Unit Complete Business Diagnostic and Determine Highest Impact Projects OES and Business Unit Jointly Complete High Impact Delivery Projects Business Unit Begins to Own and Lead Continuous Improvement Efforts
    • Small teams focused on well defined deliverables
    • Project team workouts
      • Information sharing
      • Issue Identification / Resolution
      • Direction setting
    OES - How Work Gets Done Small Teams Cross-Functional Project Workouts The Team-Based model results in relevant solutions, organizational ownership and institutionalized change.
  • World class organizations constantly challenge their business models to maintain competitive advantage and deliver additional value to their customers. Why do Organizations Transform Themselves?
    • Strategic Opportunities and Threats
    • Evolving customer and business partner needs – increasing customer sophistication, focus on cost competitiveness
    • Opportunities to expand / grow business
      • Leveraging core competencies to develop new service offerings
      • Opportunities to take existing service offerings to new markets (e.g., internal to external)
    • Increasing regulatory requirements
    • Competitive threats from higher quality, lower cost providers
    • Off-shoring opportunities
    • Operational Challenges
    • Customer service issues – speed, responsiveness, flexibility and quality
    • Degrading cost effectiveness -- as compared to competitive service providers
    • Lack of focus on core processes
    • Functional silos – lack of end-to-end process integration
    • Process inefficiencies -- proliferation of redundant, non-value added activities
    • Misalignment of roles & responsibilities based on skill levels
    • Building a performance based / continuous improvement culture
    Operational Excellence and Business Transformation
  • Keys to Operational Excellence and Business Transformation Process & Operational Excellence Process Definition Ownership & Organization Alignment Simplification & Standardization Visibility & Transparency Measurement & Control Continuous Improvement
    • Customer Focused
    • Common Understanding of Processes & Relationships
    • Reduced Reliance on Institutional Knowledge
    • Improved Process Accountability
    • Streamlined Organization
    • Reduced Complexity
    • Reduced Risk
    • Improved Consistency
    • Aligned & Integrated Performance Metrics and Scorecards
    • Visibility into Current Performance
    • Focuses Improvement Efforts
    • End-to-End Process Visibility via Technology Integration
    • Proactive Process Mgmt
    • Real-time Responsiveness
    • Process Optimization
    • Improved Business Performance
    Operational excellence is enabled through six key principles….
  • Business Transformation 6 to 10 weeks Timing Varies Develop Implementation Roadmap Develop Operating Model Refine Vision & Strategy Conduct Business Diagnostic Where are we? What are the key issues and opportunities from a customer, internal and external perspective? Where are we going? What is our vision & strategy for addressing key imperatives? What will our business look like? How should we structure our business to achieve our vision and deliver on our strategy? How do we get there? What is the most effective approach for implementing the strategy and operating model? Initiate Quick Wins and Pilots (Value Acceleration) Large, integrated, complex business process issues require a more holistic approach than simply applying D-M-A-I-C or Lean Methodologies. Business Transformation Approach Phase 2 Strategy & Operating Model Development Phase 1 Assessment Phase 3 Implementation
  • Key Outputs
    • Scenario analysis
    • Strategic intent / vision – mission, vision, principles, positioning, value prop
    • Service offering definition & Go-to-market strategy
    • Operating strategy – definition of service delivery model & core capabilities
    • Business / financial model (as required)
    • Refined Service Delivery Model
    • Core process architecture (end-to-end)
    • Organization architecture
    • Performance management architecture
    • Technology architecture
    • Structural / location analysis
    • Voice of the Customer
    • Current state to future state transition strategy
    • SOW definitions & estimates
    • Prioritized initiatives rationalized against current initiatives
    • Multi-generational roadmap
    • Refined business case
    Develop Implementation Roadmap Develop Operating Model Refine Vision & Strategy Conduct Business Diagnostic Initiate Quick Wins and Pilots (Value Acceleration) Each phase of the approach builds on the previous phase to develop a cohesive and customer focused strategy and operating model. Business Transformation Approach
    • Current state documentation
    • Business driver analysis
    • Customer input / feedback
    • Internal ops assessment by capability area – SWOT
    • External benchmarking (as required)
    • Summary of key business imperatives & opportunities
    • Initial business case
    Phase 2 Strategy & Operating Model Development Phase 1 Assessment Business Transformation Phase 3 Implementation
  • The business diagnostic provides a thorough analysis of organizational strengths, weaknesses and opportunities from multiple perspectives. A Closer Look -- Business Diagnostic Internal Capabilities Competition Technology Trends Regulatory Changes Industry Trends Vision & Strategy Operating Model Growth Opportunities Competitive Advantage Effective Operations Voice of the Customer Customer / Business Partner Value Delivery Business Diagnostic Business Diagnostic
    • Customer(s) Perspective
    • Overall satisfaction
    • Service levels
    • Views on cost competitiveness
    • Customer business direction
    • Key requirements / needs – current vs. future
    • Opportunities to provide additional value added services
    • Internal Perspective - Capability Assessment
    • Definition of core capabilities / competencies
    • Capability assessment – strengths & weaknesses around process, technology, organization structure, use of metrics, etc.
    • High level breakdown and analysis of end-to-end processes
    • Performance assessment
    • Other External Perspectives
    • Competition
    • Technology trends
    • Regulatory changes / influences
    • Industry trends (e.g., emerging products)
  • A Closer Look -- Vision & Strategy Refinement The strategy phase articulates the organization’s strategic intent, service offering strategy, and operating strategy based on the imperatives and findings identified in the diagnostic. Strategic Intent / Vision Service Offering & Go-to-Market Strategy Operating Strategy
    • Mission and vision
    • Organization role within larger company context and industry
    • Positioning
    • Types of products and services provided
    • Value proposition
    • Measures of success
    • Market / customer definition
    • Services strategy –- short-term vs. long-term
    • Customer segmentation strategy
    • Growth strategy for existing vs. new services
    • Pricing strategy
    • Operating principles
    • Service delivery model
    • Core competencies / core capabilities
    • Sourcing strategy by capability / by service offering (insource vs. outsource)
    • Shared service approach
    Business Diagnostic Results Vision and Strategy Refinement
  • Operating Model
    • Core Capabilities
    • Process Definition
    • Capability Blueprints
    • Best Practices
    • Value Analysis
    • Alignment
    • Limitations
    • Best Practices
    Technology A Closer Look -- Operating Model Process Organization Performance Management
    • Framework
    • Metric Definition
    • Scorecard
    • Control Plans
    • Mgmt Process
    • Assessment
    • Culture
    • Alignment
    • Skills
    • Sizing
    Provides a shared vision for the organization and serves as a critical foundation for the transition and future improvements The operating model provides the framework to ensure improvement efforts are aligned, integrated and balanced to enable optimal business performance. Culture and Behavior Strategy and Structure Process Organization Design Human Capital Aligns Enables Drives Inspires Drives Enables and Limits Supports Facilitates Inspires Inspires Shapes Technology Operating Model
  • The Process blueprint defines the core end-to-end processes required to deliver an organization’s services. A Closer Look – Process Blueprint
    • Indicates ‘how work gets done’ and ‘how services get delivered’ from an end to end perspective.
    • Represents the critical business documentation that clarifies what activities must be completed and by whom.
    • Is an essential training and communication tool that supports the transition and change management process.
    • Builds upon the operating strategy and service delivery model defined in strategy phase.
    Description
    • Core Process Definition
    • Process ‘SIPOC’ Diagrams
      • Process Objective
      • Frequency/Timing
      • Overall Process Owner/Accountability
      • Suppliers
      • Inputs
      • Steps
      • Outputs/Outcomes
      • Customers
    • Process Flowcharts
      • Sequence and relative timing of steps
      • Who completes each step
    Key Outputs Process
  • The Technology blueprint identifies gaps in current technology solutions and provide a roadmap for future technology needs and investment.
    • Identifies high level technical and functional requirements across capability areas and core processes.
    • Define overall technology architecture to support new service delivery model – infrastructure, data, applications, integration, etc.
    • Identify and define core applications required to meet key functional requirements.
    • Identifies gaps in current technology solutions.
    • Provides roadmap for future technology investment.
    Description Key Outputs
    • Technology Needs Analysis
      • Functional requirements
      • Technical requirements
      • Integration requirements
    • Technology Architecture
      • Infrastructure
      • Data
      • Application
      • Networking / integration
    • Application Definitions
    Technology A Closer Look – Technology Blueprint
    • Defines how resources should be organized to accomplish organization goals and objectives.
    • Identifies required teams along with the charters and missions of each team.
    • Defines organizational reporting relationships and appropriate spans of control for key leadership positions.
    • Defines key position along with roles, responsibilities, and skill requirements of each position.
    • Provides approximate estimate as to how many resources should comprise the organization.
    Description Key Outputs
    • Organization Charts
      • Organization framework
      • Leadership structure
      • Spans of control
      • Reporting responsibility
    • Team Charters
      • Mission
      • Objectives
      • Value
      • Key Positions
    • Position Descriptions
      • Description
      • Reporting relationship / grade
      • Scope
      • Roles & responsibilities
      • Key competency requirements
      • Measures of success
    • Rough Sizing Analysis
    The Organizational blueprint defines the proposed team structure and required competencies to effectively deliver service. Organization A Closer Look – Organization Blueprint
    • Provides a method for aligning and accelerating organizational activity towards the accomplishment of specific strategic imperatives & objectives.
    • Establishes a set of measurements that provides an organization with a comprehensive picture of organizational performance.
    • Enables cultural change to allow all levels of an organization to know what is important and how their contribution helps the organization meet its strategic objectives.
    • Is a key driver of continuous improvement.
    Description Key Outputs
    • Measurement Framework
      • Key business drivers
      • Measures of Success
      • Balanced scorecard framework
    • Scorecard Hierarchy
    • Balanced Scorecards
      • Scorecard Definition
      • Ownership
      • Key Stakeholders
      • Measure Identification
    • Metric Definitions
      • Description
      • Calculation
      • Measurement Frequency
      • Etc.
    The Performance Management blueprint provides a framework for aligning organizational activity towards strategic imperatives and key success factors. Performance Management Measures are the “Vital Signs” of an organization. What gets measured, gets done !! A Closer Look -- Performance Management Blueprint
  • Implementation road mapping can be segmented into four primary steps.
    • High Level Description of the Work and Required Activities
    • Defines logical releases needed to progressively build the capability
    1. Statements of Work – Capability Initiatives 2. Prioritization 3. Transformation Plan 4. Detailed Planning
    • Assessment of relative business value and implementation cost/risk for each capability release
    • Prioritize initiatives by relative value and cost
    • Identify top priorities
    Commodity Management & Plng.
    • Detailed Work Plans
    • Resource Estimates
    • Cost Estimates
    • Refinement of Business Case
    • Overall implementation roadmap reflecting:
      • Priorities
      • Dependencies
      • Organizational bandwidth
    Operating Model A Closer Look -- Implementation Roadmap Implementation Capability Description Risk Assessment Key Worksteps High Level Work Estimate Sourcing to Contract Capability Description Risk Assessment Key Worksteps High Level Work Estimate Req to Check Capability Multi-generational Roadmap Capability 5 Q4 Q1 Q3 Q1 2003 2004 Short Term Projects Capability 1 Capability 2 Capability 3 Capability 4 Q2 Q3 Q4 Q1 Q2 Q4 Q2 Q4 Q3 2005 2006 Program Management & Monitoring Program Level Change Management & Monitoring Req to Check, Etc. Sourcing to Contract Commodity Mgmt & Planning Detailed Project, Architecture, and Change Planning Process Analysis, Design & Pilot Competency/ Organization/ Culture Development and Implementation Work Segment FY04,Q4 FY05,Q1 FY05,Q2 FY05,Q3 FY05,Q4 FY06,Q1 FY06,Q2 Cost/Complexity Business Value Short Term Opportunities Evaluate Later Choose Selectively and Pace Appropriately Choose Selectively if possible Quick Win
  • Keys to Operational Excellence and Business Transformation Process & Operational Excellence Process Definition Ownership & Organization Alignment Simplification & Standardization Visibility & Transparency Measurement & Control Continuous Improvement
    • Customer Focused
    • Common Understanding of Processes & Relationships
    • Reduced Reliance on Institutional Knowledge
    • Improved Process Accountability
    • Streamlined Organization
    • Reduced Complexity
    • Reduced Risk
    • Improved Consistency
    • Aligned & Integrated Performance Metrics and Scorecards
    • Visibility into Current Performance
    • Focuses Improvement Efforts
    • End-to-End Process Visibility via Technology Integration
    • Proactive Process Mgmt
    • Real-time Responsiveness
    • Process Optimization
    • Improved Business Performance
    Remember operational excellence is enabled through six key principles…
  • Successful transformation efforts are contingent upon several key success factors.
    • Establish strong executive sponsorship and accountability.
    • Start with and maintain focus on the customer.
    • Think strategically and challenge the status quo.
    • Fully leverage the knowledge capital resident within your organization.
    • Ensure recommendations are supported by a robust business case.
    • Ensure model addresses human and organizational considerations.
    • Develop a pragmatic, rationalized and prioritized change agenda focused on value delivery.
    • Assign “benefit owners” to implement the transformation plan and drive accountability of results.
    Key Success Factors Business Transformation Success Factors
  • Questions ?
    • Mike Cook – Vice President – OES
    • [email_address]
    • Tom Angelone – Lead Consultant – OES
    • [email_address]