Even as we speak, the global corporate world is embarked on a silent, huge, effort in letting paper go not much beyond the mailroom!

Digitization of all paper, whether coming in from customers as orders, or invoices from vendors is being undertaken on a huge scale. All documents coming into the mailroom are scanned, digitized and the paper sent way immediately to outsourced archival services. Thereafter, companies prefer handling them only in digitized image form!

Storage costs falling in price dramatically in the last few years fuelled by outsourcing and offshoring of business processes have spurred this large scale digitization on an accelerating scale. Many companies, even if they are not outsourcing, are consolidating functions like Human Resources, Accounting and Finance, Order Processing, etc in centralized locations, in Shared Services Centers. For example, many Grocery Supermarket chains in the U.S used to have accountants distributed geographically. Now they are being consolidated into central Shared Services Centers. Shared Services Centers have come about to a large part because of Digitization again.

However, what is being realized quickly, and even more significant than cost savings due to consolidation is that for Continuous Process Improvement to succeed, Digitization is an essential first step in instantly enabling a lot of waste in time, effort and physical movement of paper!

Digitized documents at instantly available anywhere in the world, cutting down mountains of waste in unnecessary handling of paper.

Simple, but a lot of gain in one single stroke of technology!

It is the framework which changes with each new technology and not just the picture within the frame - Marshall McLuhan

Information Availability is half the battle in Business Process Improvement!

First, it is the availability of information itself, in a central, easily accessible way, that can speed up Business Processes by an order of maginitude!

Measurement and reporting of Performance Measures or Key Performance Indicators (KPIs) themselves help Business Process Improvement. In many cases, these performance measure information is not readily available for actionable improvement efforts.

Service Oriented Architectures (SOA) and the extensive use of the Internet to stitch together, many different systems within the same company, as well as systems of suppliers, and service providers, have bridged the Information Availability Gap to a large extent. If organizations have not done this as yet, it is well worth looking into.

Lean Six Sigma and other Process Improvement practitioners often overlook the availability of information itself to speed up, eliminate, do in parallel, many of the steps in a business process. Instead of a sequential approach to two steps in a process, may be one person can do both of them in one single step, if information needed to do it is available easily. In some cases, approvals for some action can be taken immediately and the end user served by default. If subsequent analysis of the information reveals adverse information, the decisions can be undone. In some countries, they assume that Applicants for a Passport do not have adverse information in their background checks. Their applications are approved by default. If anything adverse comes up in a follow up analysis, the passport is revoked! This way 99% of the citizens who have a clean security record are not delayed by Police or Security checks for handling the other 1% properly!

Information Availability, especially when it comes to Performance Measures or KPIs, is indeed a problem in many business processes. Information systems such as ERP systems evolved, and developed to automate functional areas like Finace, Marketing, Sales, Manufaturing, Warehousing and Logistics. They were not designed with end-to-end business processes like Order-To-Cash processes in mind. Consequently, many of them don't even capture timestamps with great detail if you want to analyze Turn-Around Time (TAT) metrics! Databases just record at the most, the date and time when a table was modfied, and not any more details on the action was just performed. In practical terms, it becomes somewhat impossible to get information about TAT metrics in business processes! Information Availability about Performance Measures is not to be taken lightly. Efforts to improve this aids Process Improvement.

Information Availability is not very high on Process Excellence folks' aganda. That may precisely be the first thing to explore if you want to get a lot of mileage out of your own improvement efforts!

Information about the package is as important as the package itself. - Fred Smith, CEO, Fedex

Process Improvement has never been more important or more needed during tough times. The kicker may be the lack of funds to take up new efforts at this time when budgets are pared to the bone. However, surveys of Fortune 500 CIOs the past few years have shown Business Process Improvement to be the #1 priority for the majority of them! Hope they still mean i, for their own sakes!

Process Improvement that leads to cost cutting has a very attractive value proposition at this time and could be taken up in earnest by many companies. Cutting out waste in effort and time leads to less resources being needed to accomplish the same quantum of tasks, and that's a very compelling thing to sell during these tough times.

Process Improvement has never been more important to Outsourcing and Offshoring service providers than at this time. Many companies are renegotiating their contracts with their service providers because of the recession. In some cases, they are asking for a Per Transaction pricing rather than a Full Time Equivalent (FTE) kind of contract pricing.

Service providers, especially offshore providers have thrown people at the problem to meet Service Level Agreements (SLAs) in contracts. Now that the topline rates are negotiated down and the margins are shrinking, they may have to pay close attention to every employee's efficiency and effectiveness and cannot afford to have more people than needed. When contracts are based on per transaction pricing, the pressure to make sure that every efficiency and effectiveness goal of every employee is met is even more pronounced.

Process Improvement has a very compelling need in tough times. Unfortunately, they may not ne taken up because of blanket bans on any new expenditures! Sad, but true in most companies!

The cure for Apple is not cost-cutting. The cure for Apple is to innovate its way out of its current predicament. - Steve Jobs

We seldom think of Unused Capacity as a Wasted Resource! In fact, it can be a wasted resource that can be fatal to the long term survival of your company and even your industry!

The Wallstreet Journal ran this story last Saturday - More Car Plants at Risk. It talks about Overcapacity in Automobile Manufacturing for Light Vehicles. We all know the trouble the car makers are in because they ignored the small car segment in favor or gas guzzlers and the market for them suddenly collapsed in 2008.

They used the following graphic from IHS Global Insight in the above article showing the difference between current and Projected Capacity and Projected Utlization!

What is remarkable is the very strict management of Capacity and Production in the past and the future of Toyota Vs. the Big 3 American Automakers! Toyota is also making losses currently but they might recover sooner than the other ones, just looking at these projections.

If you think about it, Over Capacity has a lot of costs associated with it - Idling Plants, Idling Huge Investments in these Plants for which some of these companies may be paying interest, Idling workers that are paid not to produce, Idling workers that are maintaining these plants even when they are on Ice with no actual workers around (Security, Preventive Maintenance people), etc.

Over Capacity may prove to be a huge huge waste and could be sucking a lot of the profits of the company even when some of your plants at producing at full capacity and making enormous profits for you!

Something to pay attention to, not just in Manufacturing but also in Services! Keeping the Capacity very close to Production in services, can be done easily with Multi-Skilling and good workforce optimization! There are lots of algorithms and software based on those, to account for seasonality of demand by hour of the day (Evenings and Nighttime for cusomer service on the phone, for example) and , day of the week (Mid week is peak for many business services), month of the year (Summer Travel Season or Thanksgiving for AAA services, for example) or season of the year (like Christmas!).

Training people to perform multiple tasks at work could go a long way in balancing demand and supply for business processes and services, smoothing out the overcapacity problem at any time.

Over Capacity could be one of the biggest wastes whether in manufacturing or in services or in business processes. Keeping capacity very close to demand adaptively with multi-skilling and good workforce optimization.

Production is not the application of tools to materials, but logic to work - Peter F.Drucker

Continuous Process Improvement, Lean Improvement or Six Sigma efforts can only be as successful or as reliable as the quality of data they use!

Data Quality is a pernicious, persistent and widespread problem in every organization. On the surface, reports look neat, wrapped up, and reliable but quite often the data they rely upon can be of differing quality levels. Even if backend enterprise information systems are all reliable, established and running for sometime, a lot of the Information people use may come from Data that may be from manually generated Excel-Spreadsheet-based Skunkworks Reporting Systems!

There are some simple ways to apply the same techniques you use for Process Improvement that you can use for ensuring Data Quality improvement.

The first of these is to apply the Six Sigma techniques that you use for Process Improvement to improve the quality of data. The first task may be to apply Paretos Law (80/20 rule) to narrow down the key pieces of data that are most important to the process improvement task at hand. For example, in a Business Process, Productivity may be the Key Performance Indicator (KPI) that is most important rather than another KPI like Absenteeism or Employee Turnover. Focusing on the Productivity KPI alone and the Data that goes into its calculation may be the way to go.

Not all data are equal. Some data may be more equal than others for your process improvement purposes! Concentrating on only those may be the most pragmatic way to go!

Tracking errors over a period of time in the Data of interest and reducing them to a minimum and more importantly reducing the variation in data quality from period to period may be important. WIld variations in the data quality make the data that much more unreliable.

Once the problematic areas are identified, it makes sense to do Root Cause Analysis on the sources and methods of creation of the data. This could be related to people or technology/software related issues. Figuring out where the root cause of the problem lies goes a long way in fixing the diaease rather than symptoms!

Monitoring Data Quality is important in making sure that your own observations before and after process improvement have validity and reliability, and you are not deluding yourself with faulty data in the first place!

Two men were examining the output of the new computer in their department. After an hour or so of analyzing the data, one of them remarked: "Do you realize it would take 400 men at least 250 years to make a mistake this big ?” - Anonymous