A simplification of Pricing your product or service could simplify a lot of your business processes and save you money in the long run! Hard to believe, but I can give you an example from my own recent experiences!

Recently I was in both New York City and Washington D.C. In both places, I took a lot of the local Subway for my transportation. Both were excellent public transportation systems to get around the city, easily.

In NY city, I was not frustrated in my using the subway, but in Washington, D.C, I was. I bet that administering business processes in NY city also is easier for their authorities than it is in Washington D.C.

All because of how they price their service!

NY City subway systems price any trip at a flat $2 a trip that gets swiped away from your card or you put in the tokens you get when you enter a station, any of their stations. Once inside, you can travel any number of trains or connections for any distance as long as you don't exit any of their stations but take connections onward. No remembering where you entered and where you exited!

In Washington, D.C, trips are priced anywhere from $1.35 to $3.95 depending upon distances travelled on their system. This requires the ticket recording the place you are entering, calculating the price when you exit your destination station and taking it off from the value stored.

This is where I, as a user of the system got into a lot of hassles. The magnetic stripe got wiped out after I entered a station and the problem was known only at my exit station. Had to go talk to the station agent and get another ticket. The value left over in the ticket could be refunded only by one of their far away stations because that's where their sales office was! What a hassle!

I am sure Washington D.C generates the same revenues per average passenger trip (about $2) that NY City does. The DC Metro system could simplify a lot of things for themselves as well as and provide a simpler hassle-free experience for their customer but just moving to a simple flat rate of pricing their service.

There could be many business process complications coming from a simple act of how you price your product! This is where you can save yourself a lot of hassle, costs, and customer complaints by simply following a simpler pricing strategy!

Something to think about!

Almost all quality improvement comes via simplification of design, manufacturing... layout, processes, and procedures. - Tom Peters

.... and Pricing!

There are many Unmeasurables in Business Processes such as Customer Support Effectiveness, Customer Satisfaction, Service Excellence, etc. However, State of the Art in Business Process Measurement and Analysis is that many of these Subjective Factors are converted into some sort of Objective Scores.

For example, Customer Satisfaction Index (CSAT) may be on a scale of 1 to 10. For example, if a customer sends flowers to the CEO with a thank-you note, it may be a 10. If the customer sends a nasty note saying that they are terribly unsatisfied and will let everyone that they know about the poor service they got, may be a safe 1!

This is where sometimes, capturing Subjective Performance Information in the form of open ended text may convey more meaning than reducing everything to numbers and averaging them up and down. For example, outliiers, both positive and negative may need to flagged, counted and descriptions strored and readily made available! Analyzing these pieces of information and making effective use of them falls in the realm of art rather than a science!

If there were five positive outliers and five negative outliers, it may be worthwhile for the Process Folks to keep tab of the descriptions of what made these positive and negative outliers are and not assume that on whole, things are hunky-dory! The detailed open eneded information may be much more valuable to the organization than numbers themselves. Would the negative outliers be so negative that word of mouth from those can kill anything positive that may come out of the organization?

While what cannot be measured cannot be managed well, sometimes we may have to pay attention to Intangibles and accept them as intangibles, pay attention to them and get some useful actions out of them! This is especially useful in companies like Pharmaceutical companies where beyond a certain number of negative outliers, like side effects of drugs, the issue quickly escalates from statistical outliers to a full-blown crisis in no time, ironically, whether it is warranted or not! Perception overtakes reality!

Intangible factors may mean very good things or very harmful things, depending upon what they are, which industry you are in, what your products or services are. Unmeasurables can be quite tricky and may need to be handled better than measurables, sometimes!

There are intangible realities which float near us, formless and without words; realities which no one has thought out, and which are excluded for lack of interpreters. - Natalie Clifford Barney

I was pleasantly surprised by my recent visit to a Target Store here in California. I wanted to return something.

I have never seen product returns go faster and easier than how they do it here. They scanned the barcode on the receipt, scanned the barcode on the product and the register spewed the return receipt and the credit was back on my Mastercard! It took all of 3 seconds!

That's a terrific improvement on the Return Process and it has been made possible, only because of barcodes!

I still remember processes that stores like Target used to have, even about five years ago. You needed to fill out a form wih your name, address, phone number, etc,. It took almost ten minutes to do the whole thing, not to talk about the waiting in line.

Now it is all of 3 seconds! It is customary to see long lines at the Customer Service counter or Returns/Exchanges counters at most stores right after Christmas. Stores staff up extra people to do these tasks and I bet that Target needed a whole lot less people this Christmas season to get the same work done! Elimination of time wasted by customers, store clerks and overall benefits all around!

Bar codes are incredibly useful in eliminating waste in many business processes and are simple to set up and use for the most part. I have seen them used extensively these days on the manufacturing floor, especially in automobile assembly lines. They track assemblies, sub-assemblies through the manufacturing floor. I have seen them affixed using stickers to documents and scanned quickly for computers to generate acknowledgement of receipt of documents.

Amazingly simple but very effective!

The ability to simplify means to eliminate the unnecessary so that the necessary may speak. - Hans Hoffman

Recessions are a great time to think about Business Process Improvement! In any case, you are already trying to cut costs, and you might as well take on larger efforts in cutting waste out of business processes. Of course, you can throw all kinds of new technologies like Document Management, Workflow, Document Digitization, etc but all of them cost a lot of money!

The real challenge here now is to actually squeeze the other inefficiencies out; those that require creativity, and innovative thinking, rather than expensive technology. Recessions offer this unique opportunity to take on projects that would in normal and prosperous times, the temptation may be to throw more money at it!

Toyota Keeps Idled Workers Busy Honing Their Skills is an interesting article about how Toyota keeps its idled workers in training classes to teach them more about the Toyota Production System and also on specific improvement projects.

The economic tough times set so many constraints on expenditure of money that process improvement efforts may have to concentrate on those ideas that require little, or no money. This is not necessarily a bad idea since most reduction of waste involves unncessary waits and waste of time, unnecessary movement of people and paper, etc. These require observation and insight into how the business process moves forward or not, rather than any revolutionary thought. These are the ones that will bear the most fruit also!

Efficiency is doing better what is already being done. - Peter F. Drucker

Many organizations are busy implementing Master Data Management (MDM) solutions on top of all of their applications. Master Data Management unifies the concept of a Customer of a business or a Patient in a Healthcare System. MDM solutions unifies the data about a single Customer or a single Patient in one place. This picks up all the data regarding a patient from many databases that a healthcare system like a hospital may have, and makes it available when needed. Many compliance regulations like HIPAA may need the hospital to make this available when needed. Companies may use MDM solutions to gather up ALL the information about a single customer in one single place for doing marketing, cross-selling, up-selling, etc.

Service-Oriented Architectures (SOA) is used to stitch many disparate heterogeneous databases together to make this happen. The information about a patient in a hospital may be in Patient Records or the Pharmacy transactions database. Making them all available in one single place involves accessing many different applications and databases and SOA enables them.

Master Data Management could be so very useful in the context of Business Process Management also, End-to-end business processes involve many different applications and databases. Managing, measuring, analyzing and improving business processes involves pretty much the same kind of problem. MDM soolutions that help you keep track of a Customer or a Patient could just as easily keep track of an end-to-end business process like Order to Cash, tracking the order through the company and various departments and functions! Very intriguing idea!

Errors using inadequate data are much less than those using no data at all. - Charles Babbage