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1 Business process Migrations
Executive sponsorship and stakeholder involvement ensure successful and rapid migration of business processes from a company to an outsourcing partner like AAA Business Services. AAA advocates accelerated migration for greatest benefits to the customer through strategic partnerships focused on people, processes, technology, and commercial disciplines. Critical success factors include effective project teams, appropriate training, constant communication, selecting the right processes, and delivering continuous improvement after migration.
1 Business process Migrations
- 1. AAA Business Process Transitions& Reengineering
- 2. 2 Critical Success Factorsfor 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. Ongoing Perfromance Strategy Technology Process People
- 3. 3 From Concept toDelivery….. Feasibility Study Migration Service Delivery • Identification of outsourcing opportunities • Detailed Operations, IT, Financial feasibility • Training of personnel and IT implementation • Monitoring performance and ongoing process improvements Opportunity Identification 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. 4 Executive sponsorship andstakeholder 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 Methodolog y Tactical Considerations Departmental Resources Project Manager Central Project Team Champions and Business Facilitator AAA Transition Resources Functional Experts - Training, IT Scoping Design Implementation Delivery AAA Operations Team Day to day operations Management TeamManagement Team SLA Reviews Continuos improvement
- 5. 5 Analysing Processes Complexity Extentof manual calculations Definitive work procedures/ rule sets Number of variations to standard process Extent of supervisor/ technical expert involvement Time criticality Business Risk 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 Technology & systems availability Type of system used (mainframe, client/server) Bandwidth requirements Hours of access 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 Money Claims EnterpriseLevel 0 FunctionLevel 1 ProcessLevel 2 Sub-processLevel 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. 6 Re-designing Processes toFacilitate 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 resolved Pay Invoice No Yes No Send Invoice to IM Site Payment Process Update 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 AAA Support Team Yes Pass Invoice to Engineers Assistant Check with Engineer Send Back to Garage Contact Garage Discuss with Garage Issue resolved No Yes No Update Diary at all stages and Systems on payment Op Co Process AAA Process Support Team in Op Co process
- 7. Defining Procedures andProtocols 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. 8 Indicative Costs andBenefits 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. 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 *) ContinuosContinuos ImprovementImprovement Management sponsorship & focus Resource management Measurement, analysis & improvement Iterative development
- 10. 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. 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. 12 BSG in Action» AAA Life – Process Re-Engineering example Department – 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
- 13. Thank You Helping AAAin “setting the high standards in our business”
Editor's Notes
- #2 I will take you thru an overview of the BSG team – key enabling function in ABS, its services, Migration approach
- #3 Key ingredients to be present in all migrations to make them a success..Based on Past experience on similar projects..some are the hard ones involving technical skills but the important ones are the soft ones involving people and commn. And to be honest the soft stuff is the hard stuff here.. So sometimes we gotta make the tough calls sooner rather than later and be too candid or blunt We are in People’s biz and outsourcing is a sensitive topic directly impacting the people, so setting up a joint project team, looking at these projects as partnership with constant commn is highly imperative. It is essentially about change management Tech is the backbone More than executive handshake
- #4 Prior to mid 2001, the migrations were done in an adhoc and unstructured manner with very less rigor around them, resulting in some bad and wrong processes migrated to ABS and later reverse migration happening.We then developed this framework and have successfully followed it for past 20 months. It is a 4 stage model and further drilled into a detailed toolkit on carrying out each stage in a standard way. It has been followed with most of the customers and there is 20-30 % deviation primarily due to clients’ comfort level and readiness with their own project management methodology
- #5 We firmly believe that outsourcing is a joint effort with a exec sponsorship and project teams from both ends One to One mapping of resources from both ends resulting in a cross functional team
- #6 Process Evaluation is critical for a successful migrartion We have a scoring model that takes into account subjective and objective assessment and quantifies it from outsourcing perspective Organizations have process centric and product centric structures PPP – homogeneous group, inherent process same, one system AAAL – similar process in different departments around different products resulting in small no of FTEs and fragmented processes
- #7 Redesign or BPR is attacked through a 3 pronged strategy. It focuses on changing the process flows – identifying the core and non core activities, systems – automation or small macros/databases and people ( multi-skilling, new role definition ) Redesign happens around the workflow ..inputs to the process, changing the way it is carried out ( e.g. scanning, centralized mail room ) and the outputs from the process ( querying, reporting and printing ) Redesign around roles & responsibilities – decoupling in a process to leave the voice component in Dubai..resulting in a support team or control team Key processing remains same because the system forces the standardization
- #8 Typical OP Model Core systems in Dubai Transparent to end customer as all outputs gets generated in Dubai
- #10 Evolution journey of a process in ABS or a BPO company