What comes first: process optimization or people optimization?

Feb 19 2016 by Craig Seebach Print This Article

As more and more organizations begin to modernize their core systems, many assume the optimization of their processes will go hand-in-hand with their systems. This is not always the case, as SMA partner Karen Futardo pointed out in the article, “What Comes First: Core Modernization or Innovation?” In the article she states that, “If there hasn’t been a concurrent effort to align this (core modernization) with processes and how employees handle them, it is extremely disruptive.”

I think Karen makes an important distinction here. She references processes AND how employees handle them. As core systems are modernized, business rules and processes will be re-evaluated and, hopefully, streamlined. Once that step is done, you are faced with the challenge of re-educating your employees on the new processes and systems.

Getting them on board and adopting the changes can be a daunting and lengthy endeavor. But it seems like a logical progression to start with modernizing the systems, then the processes, and then the way people work, right? Not necessarily. What happens when you focus on the people optimization first?

One of my larger customers, a global P&C and Life insurer, wanted to increase processing consistency and efficiency across its claims processing centers around the globe. They were evaluating vendors for a core system upgrade, but realized it would take several years to rollout and see the benefits. They thought about doing a cross-functional business process improvement program, but as a senior executive in the insurer’s shared services organization said, “You can’t effectively jump in and conduct a process improvement initiative if you don’t have activity data and documented processes,” which he admitted his organization lacked.

So they decided to focus on their largest cost base - their people, and see if there was a means of improving their productivity and performance in the short term. The starting point was actually building a baseline of current activity to understand how employees were spending their time. The customer used desktop analytics to capture employee activity directly from the desktop. They categorized different applications as production or non-production-related, and provided a means for an employee to electronically self-document how they were spending their time to capture non-application-based activities such as meetings, training, lunch/breaks, etc. The data was then aggregated into performance scorecards that would compare actual time spent in production applications versus time recorded by the employees versus goal.

What my customer discovered was that an inordinate amount of time was spent idle, and a larger percent of time than had been allocated in their resource plans was spent in meetings, training and on projects.

With this intelligence, they were able to investigate the cause of the idle time to learn that a lot of productive time was lost while employees were waiting for work. By realigning shifts to work arrivals, and scheduling meetings and trainings for the lulls in work, they were able to dramatically reduce idle time. Across their claims organization they were able to increase time spent in production by 36 percent and saved 26 percent in employee costs, equating to millions of dollars.

The performance scorecards have given employees insight into how their behaviors impact their performance metrics and have kept them focused on driving increased productivity. The activity data gives management insight into how work is currently done so they can more easily identify opportunities to improve and streamline processes. As new systems and processes are rolled out, the activity data and performance scorecards will help management monitor application usage and process adoption, identifying those employees who may be struggling and need additional coaching or training.

So for this insurer, optimizing the people came before optimizing the processes and the core system modernization. It improves their productivity in the short term and gives them a better foundation for both those future initiatives.

By adding people back into equation, insurers can improve operational efficiency not only through systems and processes, but also by enhancing the efficiency of their greatest resource - their staff. In my mind, the people optimization always comes first.


About The Author

Craig Seebach
Craig Seebach

Craig Seebach is Vice President of the WFO Back Office Practice at Verint Enterprise Intelligence Solutions, working with clients worldwide on workforce and process optimization projects.