Tips & Pointers for Conducting Process
Improvement Projects
Tom Sonde
PIHRA 2012 Annual Conference
Tuesday, August 28, 2012
Tips & Pointers for Conducting Process Improvement Projects
Conducting Process Reviews
Introduction
Designing the Future State
What to Look For
Other Keys to Success
Agenda
Process Improvement Methodologies
Process Improvement
Six Sigma
Business Process Management (BPM)
Enterprise Process Management (EPM)
Lean
Reegineering
Total Quality Management (TQM)
Improvements are can be Achieved Across your
Organization
Human Resoures
Payroll
Pro
cess
es
Time & Attendence
Trai
nin
g
Benefits Administration
Recruiting Talent
Management
Sucession Planning
Co
mp
ensa
tio
n
Processes
Evidence Process Improvements are Needed
Simple tasks take too long to complete
Too much time is spend validating data
Employees constantly complain
Too much paper is being used
Backlogs exist
There is a significant amount of manual keying and
rekeying of data
Is this Occurring in your Organization?
Evidence Process Improvements are Needed
Information is not easily accessible
Senior management information requests result in
constant fire drills
System workarounds and renegade processes exist
Excessive use of spreadsheets
External databases / data warehouses supplement the HR
system
Does senior management even realize
how many inefficiencies exist?
Is this Occurring in your Organization?
Conducting Process Reviews
Introduction
Designing the Future State
What to Look For
Other Keys to Success
Agenda
Tips & Pointers for Conducting Process Improvement Projects
Process Reviews
The key to resolving process issues is to:
Obtain an Understanding of the Underlying Cause of Process Issues by Conducting Process Reviews
Process Reviews
The key to resolving process issues is to:
Address the end-to-end process.
Obtain an Understanding of the Underlying Cause of Process Issues by Conducting Process Reviews
Addressing the End-to-End Processes is the Key to Success
Salary and
Benefit
Expense
available for
transfer VAC
system
Green Bar Report
printed from
Specials Database
Postage, and
Supply Expense
report sent bi-weekly
The data from these
reports are manually
entered into an
Excel spreadsheet,
Excel Spreadsheets
are turned into a text
file then transferred
into the VAC
Disbursement System VAC System is
updated
MOD Budget
Report used to
prepare MQ
(1)
( 1) Report shows MTD and YTD Expenses, Encumbered-unpaid expenses, $ Free
Balance, and % Free Balance. This report is used to create MQ. (2) Report shows General Funds
Departments, account #, recommended budget, current appropriations, YTD
expenses, and YTD % budget used. Attachment also includes Outside General Funds with all categories plus estimated
revenue, YTD revenue received, and YTD % collected. Report generated by
Controllers office and given to John Murphy (12th Floor room 1243) for
review. The report is reviewed with the CFO by the staff and Controller. (3) Other daily phone bills are sent through
on an AP voucher to be paid (4) Fleet Management supports 3
departments and generates approximately 100-150 work orders each month. (5) This report shows monthly receipts and
expenses by departments. Any request for adjustments are sent via hardcopy to the
Controllers office.
General Fund
Quarterly
Summary Report
(2)
Medicare Expense
from Payroll
Telephone bills are
received from Nynexl,
Nextel, Sprint, Arch
wireless, and Ameritech
(3)
Total for each
department is
entered on Excel
Spreadsheets.
One sheet per
company
Each department
receives an
itemized list of
charges to their
department
Any disputes are
reported to the
Telecommunication
s dept. and a credit
is granted.
Telecommunications - Phone
Expense
Fleet Management - Gas and Maintenance
Expenses Work Orders are
generated as work is
done in Fleet
Management
(4)
At month end,
work orders are
summarized by
department and
entered into Excel
Printed report is
sent to each
department and
Controllers office
One copy is sent to
the department, the
other is used to
record expense/
billing
AP and
Disbursement
transactions
Risk Management - Life, Health, Dental Expenses
Payroll - Salary and Benefits Expenses
Central Supply - Xerox, Postage, and Supplies Expenses
Spreadsheet
is sent to
Controllers
office
Health Enrollment
Database with all
employee health,
life and dental data
Report of all
enrollment is sent
to departments for
update/correction
Changes are input
on Excel
Spreadsheet
which calculates
chargebacks
Departments
return hard copies
to Risk
Management for
changes
John Murphy uses
report to record
expenses and transfer
funds between
departments
Payroll System
Specials
Account
maintains
mileage
Departments
receive blank
report listing
Department
completes mileage
and total
department
reimbursement
Report is returned
by 9th of month to
Payroll
Payroll inputs
mileage, system
calculates
reimbursement.
Payroll - Mileage Expense
Payroll - Medicare Expense
Payroll System
Medicare Expense
adjustments are
posted after
payroll run
Report printed by
department/
account
Department
sends
spreadsheets
to the Controller net
of any
adjustments
RollOver Monthly
Report sent to
departments
(5)
Manual log of copy
requests by
department (+10%
surcharge)
Departments
request supplies
via phone/fax and
they are tracked
via VAC system
Postage machine
tracks postage by
Department
Supply and postage
expenses per
department are entered
into VAC system
Meet with Individual process owners
• Obtain an understanding of how day-to-day activities are accomplished
• Conduct workshops, benchmarking and/or surveys
Follow the data and/or paper trail
• Obtain an understanding of the content and requirements for each piece of data/paper
Remember the 80/20 rule
• Address all processing procedures especially the exceptions
Follow the process from department to department
• Review the process end-to-end both internally and externally
80 / 20 Rule
Data / Paper Understand
Current Processes Multiple
Departments
Review the end-to-end process
Conduct Process Reviews to Obtain an Understanding of the End-to-End Processes
Identify all inputs and outputs
• Examples include: manually keyed data, electronically fed data, reports, payroll checks, benefits statements, etc
Pay careful attention as to all the steps that go into a process
• Look for the unusual one-off processes
Understand what procedures are accomplished by the system
• More importantly identify manual processes that the system should be handling
Be Observant Non System
Data Inputs / Outputs
System Utilization
Review the end-to-end process
Identify data being stored or analyzed outside the system
• Examples include: spreadsheets, databases, index cards, etc.
Conduct Process Reviews to Obtain an Understanding of the End-to-End Processes
Review existing policies, procedures and user manuals
• Obtain an understanding of what is documented and then compare it to what you have observed
Create current state process maps (if necessary)
• There is no need to create a process map for every process – the focus should be on the future requirements
Develop a future state
• Develop future state process maps that document process steps and requirements
• Document depending on the level of detail required (Visio, PowerPoint)
Develop Process Maps
P Policies and Procedures
Future State
Review the end-to-end process
Document current requirements
• Identify what processes need to be accomplished, what data needs to be generated, etc.
Current Requirements
Conduct Process Reviews to Obtain an Understanding of the End-to-End Processes
Don’t Assume Always Ask Why
End-to-End
Processes
Understand the Need
for all Inputs and
Outputs
Key Steps when Sitting with a Process Owner - Question Every Activity
Always Ask Why
What is the activity trying to accomplish?
Is it is necessary
Does it add value?
Question why
Always ask and then continue to ask
Why a process or procedure is being performed?
Why isn’t the system performing it?
Why an output is needed?
End-to-End
Processes
Key Steps when Sitting with a Process Owner - Question Every Activity
Don’t Assume
Don’t assume anything
Ask “dumb” questions
Politely challenge
Validate what you have been told
Compare it to the data or paper trail and/or documentation
Check with other process owners / departments
Check with other staff performing the same or similar tasks
Key Steps when Sitting with a Process Owner - Question Every Activity
End-to-End
Processes
Understand the Need for All Inputs and Outputs
Review all inputs and outputs
Question what the data is needed for
Determine it’s accuracy
Question what users or other departments do with the data
Ask the user what they would like in the ideal world
Question if the frequency is appropriate
Key Steps when Sitting with a Process Owner - Question Every Activity
End-to-End
Processes
Question Every Activity
Identify the root cause of problems rather than
the symptoms
Question whether the activity is necessary
Question if the frequency is appropriate
Determine if the activity could be
accomplished in another fashion
Always question why a manual process is not
being performed by the system
Key Steps when Sitting with a Process Owner - Question Every Activity
End-to-End
Processes
Conducting Process Reviews
Introduction
Designing the Future State
What to Look For
Other Keys to Success
Agenda
Tips & Pointers for Conducting Process Improvement Projects
Self Service
Paper
Integration
Employees should utilize system self-service functionality whenever possible
Employees should take advantage of vendor provided self-service capabilities
Question why every piece of paper in a process is necessary
Wherever possible replace paper with an electronic solution
Fully integrate all systems
Require large volume vendors to provide electronic feeds
Provide electronic feeds to vendors
Improvement Opportunities - What to Look For
Training
Access to Data
Reporting
Obtain a through understanding of the process before developing training
Training should incorporate both process and technology
Training should be developed with the process owners skill sets in mind
Anyone that requires access to data should have the appropriate access
Ideally access should be provided electronically rather then on paper
Access to data should be timely
Reports should be developed with the user in mind
Review how process owners are using their reports
Identify user needs that are not being met by current reports
Reports for routine activities should include all required data on a single report
Improvement Opportunities - What to Look For
User Manuals, Policies &
Procedures
Data Input
Develop user manuals, policies and procedures that cover the entire process
rather then a “How to use the software” solution
Ideally all data should be fed to the system electronically
Manually input data should never be keyed more then once
Eliminate manual forms by requiring staff to complete electronic forms via the web or directly into the system using self-service functionality
Improvement Opportunities - What to Look For
Question Every Activity
Manual forms
Multiple reviews and approvals
Manual tracking of documentation
Labor intensive processes
Excessive handoffs
Duplication of effort
Unnecessary use of paper
Manual file folders
Huge piles of papers on desks
Excessive need for file cabinets
Routine missed deadlines
Non-value added activities
Always Ask Why
Errors / mistakes
Unreasonably long cycle time
Multiple data entry points
Manual keying of data
Duplicate keying of data
Bottlenecks
Unnecessary procedures
Unused data or reports
Shadow processes
Excel spreadsheets
Shadow systems (e.g. data warehouse)
Routine Delays
Potential Clues to Lookout for:
HR System Not Delivering
Many system issues are not the result of the software.
Is your HR System Working the way it’s Supposed to?
HR System Not Delivering
Many system issues are not the result of the software.
They were caused by a flawed implementation.
Is your HR System Working the way it’s Supposed to?
Implementing new technology does not guarantee efficiency
Teacher
completes
requisition form or
fills out pre-printed
list for items
needed
School clerk
enters data into
system from
requisition
Principal or Dept.
Head approves
and signs
requisition
After data is
entered,
requisition will be
funneled into the
following
Non site-based budget
purchases goes to an
approver initially
Based on the type
of purchase,
requisition is
routed to one of
the following:(1)
Finance Dept. (2)
Site-based budget purchases
go directly to Finance
Custodial - Plant
Operations
Exceptional
Children Division
Applied
Technology
Career
Development
Library Services
Chief Academic
Officer-Textbooks
Teaching &
Learning Assmt.
Interscholastic
Supplemental
Funds-Budget &
Management (3)Type 1
Purchasing Dept/
Senior buyers
receives
purchases in
"requisition proof"
Senior buyers
review requisition
proof, checks for
errors (4)
Other purchases
are routed to a
buyer - based on
assignment
Buyer receives
buyer's copy
Buyer requests
quotes/bids from
vendors (fax, mail,
or phone) Request
for Quotation form
Requisition proof
is generated from
information
entered into
system
If no errors found
on requisition proof
If errors
are found
Purchase order is
generated from the
requisition proof
the next day
Senior buyers will
correct errors and
another proof is
generated
Purchases orders
printed at
Southside location
and delivered to
Admin Bldg.
Senior buyers
separate POs (5
copies)
Orange copy kept
on file at
purchasing office
White PO copy
routed back to
original buyer
Blue copy sent to
Controllers Office
Brown/yellow copy
sent to school
(brown copy is
receivers report)
Buyer signs and
dates PO; sends
to vendor by mail
or fax
Vendor receives
PO and ships
order to school
Vendor sends
invoice to Finance
Dept.
Type 2
Finance Dept.
matches invoice to
receiver's report
System generates
payment when
both invoice and
receiver's report
are entered into
systemSchool confirms
purchase by
sending receivers
report to Finance
Dept. (5)
Type A
Type B
Purchases from a contract
company or pre-printed list
Purchases not from a contract
company or pre-printed list
regardless of price
Teacher
completes
requisition form or
fills out pre-printed
list for items
needed
School clerk
enters data into
system from
requisition
Principal or Dept.
Head approves
and signs
requisition
After data is
entered,
requisition will be
funneled into the
following
Non site-based budget
purchases goes to an
approver initially
Based on the type
of purchase,
requisition is
routed to one of
the following:(1)
Finance Dept. (2)
Site-based budget purchases
go directly to Finance
Custodial - Plant
Operations
Exceptional
Children Division
Applied
Technology
Career
Development
Library Services
Chief Academic
Officer-Textbooks
Teaching &
Learning Assmt.
Interscholastic
Supplemental
Funds-Budget &
Management (3)Type 1
Purchasing Dept/
Senior buyers
receives
purchases in
"requisition proof"
Senior buyers
review requisition
proof, checks for
errors (4)
Other purchases
are routed to a
buyer - based on
assignment
Buyer receives
buyer's copy
Buyer requests
quotes/bids from
vendors (fax, mail,
or phone) Request
for Quotation form
Requisition proof
is generated from
information
entered into
system
If no errors found
on requisition proof
If errors
are found
Purchase order is
generated from the
requisition proof
the next day
Senior buyers will
correct errors and
another proof is
generated
Purchases orders
printed at
Southside location
and delivered to
Admin Bldg.
Senior buyers
separate POs (5
copies)
Orange copy kept
on file at
purchasing office
White PO copy
routed back to
original buyer
Blue copy sent to
Controllers Office
Brown/yellow copy
sent to school
(brown copy is
receivers report)
Buyer signs and
dates PO; sends
to vendor by mail
or fax
Vendor receives
PO and ships
order to school
Vendor sends
invoice to Finance
Dept.
Type 2
Finance Dept.
matches invoice to
receiver's report
System generates
payment when
both invoice and
receiver's report
are entered into
systemSchool confirms
purchase by
sending receivers
report to Finance
Dept. (5)
Type A
Type B
Purchases from a contract
company or pre-printed list
Purchases not from a contract
company or pre-printed list
regardless of price
Teacher
completes
requisition form or
fills out pre-printed
list for items
needed
School clerk
enters data into
system from
requisition
Principal or Dept.
Head approves
and signs
requisition
After data is
entered,
requisition will be
funneled into the
following
Non site-based budget
purchases goes to an
approver initially
Based on the type
of purchase,
requisition is
routed to one of
the following:(1)
Finance Dept. (2)
Site-based budget purchases
go directly to Finance
Custodial - Plant
Operations
Exceptional
Children Division
Applied
Technology
Career
Development
Library Services
Chief Academic
Officer-Textbooks
Teaching &
Learning Assmt.
Interscholastic
Supplemental
Funds-Budget &
Management (3)Type 1
Purchasing Dept/
Senior buyers
receives
purchases in
"requisition proof"
Senior buyers
review requisition
proof, checks for
errors (4)
Other purchases
are routed to a
buyer - based on
assignment
Buyer receives
buyer's copy
Buyer requests
quotes/bids from
vendors (fax, mail,
or phone) Request
for Quotation form
Requisition proof
is generated from
information
entered into
system
If no errors found
on requisition proof
If errors
are found
Purchase order is
generated from the
requisition proof
the next day
Senior buyers will
correct errors and
another proof is
generated
Purchases orders
printed at
Southside location
and delivered to
Admin Bldg.
Senior buyers
separate POs (5
copies)
Orange copy kept
on file at
purchasing office
White PO copy
routed back to
original buyer
Blue copy sent to
Controllers Office
Brown/yellow copy
sent to school
(brown copy is
receivers report)
Buyer signs and
dates PO; sends
to vendor by mail
or fax
Vendor receives
PO and ships
order to school
Vendor sends
invoice to Finance
Dept.
Type 2
Finance Dept.
matches invoice to
receiver's report
System generates
payment when
both invoice and
receiver's report
are entered into
systemSchool confirms
purchase by
sending receivers
report to Finance
Dept. (5)
Type A
Type B
Purchases from a contract
company or pre-printed list
Purchases not from a contract
company or pre-printed list
regardless of price
Teacher
completes
requisition form or
fills out pre-printed
list for items
needed
School clerk
enters data into
system from
requisition
Principal or Dept.
Head approves
and signs
requisition
After data is
entered,
requisition will be
funneled into the
following
Non site-based budget
purchases goes to an
approver initially
Based on the type
of purchase,
requisition is
routed to one of
the following:(1)
Finance Dept. (2)
Site-based budget purchases
go directly to Finance
Custodial - Plant
Operations
Exceptional
Children Division
Applied
Technology
Career
Development
Library Services
Chief Academic
Officer-Textbooks
Teaching &
Learning Assmt.
Interscholastic
Supplemental
Funds-Budget &
Management (3)Type 1
Purchasing Dept/
Senior buyers
receives
purchases in
"requisition proof"
Senior buyers
review requisition
proof, checks for
errors (4)
Other purchases
are routed to a
buyer - based on
assignment
Buyer receives
buyer's copy
Buyer requests
quotes/bids from
vendors (fax, mail,
or phone) Request
for Quotation form
Requisition proof
is generated from
information
entered into
system
If no errors found
on requisition proof
If errors
are found
Purchase order is
generated from the
requisition proof
the next day
Senior buyers will
correct errors and
another proof is
generated
Purchases orders
printed at
Southside location
and delivered to
Admin Bldg.
Senior buyers
separate POs (5
copies)
Orange copy kept
on file at
purchasing office
White PO copy
routed back to
original buyer
Blue copy sent to
Controllers Office
Brown/yellow copy
sent to school
(brown copy is
receivers report)
Buyer signs and
dates PO; sends
to vendor by mail
or fax
Vendor receives
PO and ships
order to school
Vendor sends
invoice to Finance
Dept.
Type 2
Finance Dept.
matches invoice to
receiver's report
System generates
payment when
both invoice and
receiver's report
are entered into
systemSchool confirms
purchase by
sending receivers
report to Finance
Dept. (5)
Type A
Type B
Purchases from a contract
company or pre-printed list
Purchases not from a contract
company or pre-printed list
regardless of price
New Technology
Inefficient Old Process
New Technology
Inefficient New Process
Why Doesn’t your System Perform as Promised?
Who’s to Blame
Project Implementation Team
Process Owners
Training
Consultants
Other
1
2
3
4
5
The Foundation of a Successful System Includes Process and Best Practices
Pro
cess
Tech
no
logy
Be
st P
ract
ice
s
Successful Implementations Address more then Technology
Best Practices
Professional organizations
Conferences
Other companies
Books
Consultants
System Functionality
Best Practices and System Functionality Knowledge
How do you obtain knowledge of Best Practices and
System Functionality?
User manuals
Vendors web site
Books
Consultants
Conducting Process Reviews
Introduction
Designing the Future State
What to Look For
Other Keys to Success
Agenda
Tips & Pointers for Conducting Process Improvement Projects
Your Logo
• This is an example of a to-be process map.
• Process maps may be prepared using Visio, PowerPoint
or on paper depending on the level of sophistication required.
Visioning
Whiteboard
Strawman
Developing a Future State
Payroll Process (High Level View) - Pre Software Interface
PS
Pro
ject
Opera
tions-
ISO
pera
tions-
Data
Entr
yP
ayro
llH
RF
ield
Budget
Prepare Supp
Time Reports &
Overtime Reports
Review and
approve
Review and
correct Supp Time
Reports and OT
Reports
Input Supp Time
Reports & OT
Reports
Prepare T&L
Reports
Review and
correct T&L
Reports
Input T&L reports
Run Pay & Time
files into PS
Provide Account
Codes as needed
Prepare Payroll
Notification Forms
to process
adjustments
Create Paysheets Update Paysheets
Produce checks,
advices & DD file
for bank, and print
reports
Run final calc and
confirm
Distribute checks
and advices
Reconcile payroll
Conducting Process Reviews
Introduction
Designing the Future State
What to Look For
Other Keys to Success
Agenda
Tips & Pointers for Conducting Process Improvement Projects
Successful Tips for Delivering Process Improvements
Build cross functional teams that include representation
from all appropriate functional areas
Place process owners in project lead positions
Make the process owner responsible for the budget
Key Success Factors
Change
Management
Politics
• Understand the political
landscape
• Use politics to your
advantage
Quick Wins • Fix the easy things first
• Gain traction
Resources
• Make sure the proper resources are on
the team and that there is an adequate
budget with realistic timelines
Communicate
• Communicate positive
results
• Communicate as
appropriate – Remember
the who, what, where,
when and why
• Communicate regularly
Understanding Project Dynamics
Build Alliances
• Win over adversaries
• Make IT part of the team
• Get Finance involved
Executive
Sponsorship
Support Provides funding, appropriate resources and opens doors when necessary
Values Sets the tone, communicates the importance of the project to the organization
Leadership Provides direction, advice and credibility
Stick Provides the appropriate leverage when necessary
Carrot Provides rewards and incentives for success
Executive Sponsorship Plays a Key Role
Potential Threat
It is important to Understand why People are Resistant to Change
Fear of the Unknown
Potential Threat
It is important to Understand why People are Resistant to Change
Fear of the Unknown
Potential Threat
Threat of Obsolescence
It is important to Understand why People are Resistant to Change
Fear of the Unknown
Loss of
Kingdom / Status
Potential Threat
Threat of Obsolescence
It is important to Understand why People are Resistant to Change
Fear of the Unknown
Loss of
Kingdom / Status
Potential Threat
Threat of Obsolescence
Fear of Something
New
It is important to Understand why People are Resistant to Change
Fear of the Unknown
Loss of
Kingdom / Status
Potential Threat
Threat of Obsolescence
Fear of Something
New
Change May
Uncover Hidden Issues
It is important to Understand why People are Resistant to Change
Fear of the Unknown
Loss of
Kingdom / Status
Potential Threat
Threat of Obsolescence
Fear of Something
New
Changes May Result
in Additional Workload
Change May
Uncover Hidden Issues
It is important to Understand why People are Resistant to Change
Justification
At a minimum on a small project you want to justify the need for dedicated resources to focus on
your project
Clearly Articulate Benefits
The better you can articulate benefits and real dollar savings the more support you will receive
Quantify Savings
Quantify potential savings in order to: Free up resources
(e.g. process owners, IT staff)
Gain executive buy-in and
obtain funding
Focus on Savings
Focus on savings, not cost
ROI
Return on Investment - ROI A Positive ROI is Essential to Obtaining Project Approval
The Time Required For Improvement Varies
Improvements can be accomplished within a day or can
take months
– Quick hits
– Process adjustments / realignment
– Significant changes
Implement quick wins to gain credibility and traction.
Improvements are Easier to Address then Many Believe
You’ll be Amazed at What You Find!
I Challenge You to Try This!!
Set aside five to ten hours over the course of a week or two
and see what you can uncover!
Free “How to”
Helpful Hints for Improving the
Productivity of HR
Tom Sonde, Principal
(973) 722-9304
SilverRoad.net
Thank you for
your attention!
Any Questions?
Tom Sonde Biography
Tom Sonde
T is a principal with Silver Road Solutions, a management consulting firm specializing in helping HR organizations be more productive. He began performing process improvement work while at The Dun & Bradstreet Corporation. He subsequently worked at KPMG Consulting and was VP Global Business Transformation at Misys where he redesigned their global HR processes during an SAP implementation.
Tom has extensive experience in helping organizations improve productivity. He has written several articles on this topic including: Finding the Hidden Values in HR Systems, which appeared in Human Resources Executive magazine.
For additional information regarding improving the productivity of HR system please visit SilverRoad.net
Tom Sonde, Principal
SilverRoad Solutions
1362 Tamarack Road
Manasquan, NJ 08736
(973) 722-9304
http://www.silverroad.net/
Copyright © 2012 SilverRoad Solutions.
About Us
SilverRoad Solutions is an innovative management consulting firm specializing in,
Human Resource Optimization, Expense Reduction, Process Improvement and Business
Process Management services. We assist HR organizations in successfully implementing
transformational change.
To learn more about how we can lower your costs while improving the productivity of your
organization please contact us at [email protected] or by calling (973) 722-9304.
Copyright © 2012 SilverRoad Solutions.