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Top Tips to deliver rapid Operational Excellence:
For improved customer satisfaction and significant cost savings
11th Sept. 2019
Paul Ruggier
M: +44 (0)7775 752020
https://www.linkedin.com/in/paulruggier/
Agenda
1. Introduction and how to avoid false starts
2. Operational Excellence - Suggested implementation approach
3. Effectiveness of this approach -
4. Case studies and results achieved (GE Capital, Xchanging – Lloyd’s of London, BAE Systems, Deutsche Bank, Generali and HSBC)
5. Process Excellence Learnings
6. Automation (RPA) Learnings
7. Q&A
Paul Ruggier – an Introduction
Operational Transformation Capability & Process Excellence• Improved efficiency and effectiveness of ~40,000 Operations staff in ~50 countries• Helped deliver $150m P&L savings in 2018• Built, led and developed a team of ~360 Process experts to re-engineer key Customer Journeys,
improve processes, implement Operational Management Excellence and migrate 10,000 off-shore
HSBC
Global Head of Op. Ex & Automation• Built internal E2E and LSS capability across 18 European and 6 Asian Countries• Trained Sr. Leadership as Champions & coached 300 BB/GB’s to deliver €60m cumulative benefits• Introduced Robotics and AI following process optimisation
Founder & Global Head of Process Excellence• Founder Member; Helped take to IPO FTSE 250 (£660m Market Cap.) and 8,500 employees• More than €1b turnover operating in 16 countries• Helped achieve > 30% productivity improvement within 3 years in Xchanging Partnerships
Director of Quality (Six Sigma), Europe• Led Six Sigma for GE Capital’s 27 European businesses across 16 countries• Delivered over $70 million net income within the 1st two years• Presented personally, every Quarter, to former CEO Jack Welch
Head of Process & Quality, Europe, then USA• Implemented TQM in UK (HQ, oil rigs, refinery & service stations) then Europe• Shared Best Practice with Motorola (Six Sigma), Xerox, AT&T, Kodak, TI etc.• Achieved 30% productivity improvement at gas production plants in the USA
Sales & Marketing• Seven years in Sales and Marketing, then helped implement TQM
Generali
Xchanging
GE Capital
Texaco
Procter & Gamble
3
Effective Approach for Process Excellence & Automation – Avoiding False Starts
• Ensure total leadership commitment and drive - not just awareness
• Build self-sustaining capability beyond good project execution
• Develop senior execution team to build this self-sustainability
• Integrate and align programme to achieve business goals & strategy
• Drive empowerment and minimise bureaucracy
• Benefit sign-off by Governance / Finance
• Don’t confuse with regular project management or “Just Do It” projects
• “Steal shamelessly” and spread the adoption of best practices
4
Approach
Operational Excellence Programme Framework
Eliminate anything that is waste
Make it simple Optimise that whichhas been simplified
Automate that which has been optimised
Continuous Improvement (e.g. Lean Six Sigma / Agile) ProcessAutomation
Re-engineering of key Customer Journeys
It starts with a mindset change.
Ideally, don’t automate or migrate a ‘broken’ process
Create a winning mindset
5
Approach
C
Time (years)
6
5
4
2
3
Process
performance in
Sigma (σ)
Process design
& automation (STP)
Basic Lean Six
Sigma simplification
& standardisation
Elimination of re-
work & non-value
added activities
2 4 6
More rigorous Six
Sigma tools and
techniquesHuge “Prize” from
performance
Improvement from
2σ to 4σ
From ≈30% to less than 1% non-value-added activity
Lean Six Sigma- Still a powerful methodology to deliver rapid, rigorous results
6
Approach
LSS Capability Development Programme- Always dliverd greater than 4-fold return within the 1st year
All-employee
Master classes
Finance
Managers‘
workshop
Select and
start GB/BB
projects
GB/BB
Training
Week 1
Establish project
tracking
mechanism
Projects start
to deliver
‘quick wins‘
“Wave 2”
projects start to
deliver large £
benefits
“Wave 1”
projects start to
deliver large £
benefits
Month 3 Month 4 Months 7+Month 5 Month 6Month 1 and 2
Ongoing GB/BB and Champion coaching and reviews by MBBs
Identify potential
Projects &
establish pipeline
Identify deploy-
ment scope &
roadmap
Develop
‘Business /
Industry’ Map
Executive
Champion
Training
Identify &
appoint
BB/GBs
Results from Lean Projects/ ”Quick Wins”
GB/BB
Training
Week 3
GB/BB
Training
Week 2
Set up
Governance incl.
Project/Program
review process
7
Wave 2
projects are
initiated
Wave 1
project
learnings Acceptance of
CI culture
spreads
LSS Capability
begins to get
institutionalised
Approach
Xchanging: History of ‘Enterprise Partnerships’- Same Operational Excellence approach was applied to all
• 400 employees, 8-year
• Retail investment account management • 1.5m investment accounts and €30bn of
assets under mgt.£500M
• 850 employees, 12-year
• €150m annual cost base• 2 million securities transactions per day
(approx. $3billion in value) across Europe
€1.5Bn
• 600 employees, 10-year
• HR & Procurement • £20m annual cost base
£1.0Bn
• 500 employees, 10-year
• Insurance claims administration accounting, and settlement
£350M
• 700 employees, 10-year
• Policy & premium processing for the London insurance mkt.
£700M
• 220 employees, 10-year Insurance claims adjustment and management £500M
• Finmeccanica,
• United Biscuits,
• National Australia Bank
• Boots
• QBE,• Allianz, • Zurich, • AXA
• Cooper Gay,• Aon Benfield• Lockton
• Citibank• Sparda-Banken• Sal Oppenheim• Berliner Bank
• Argentos• Pioneer Investments• HypoVereinsbank• Deutsche Vermogens-
bertatung• Veritas
• Ace• Catlin• BRIT Insurance• Travellers
3rd Party Revenue ExamplesPartner Detail Contract Value
• TargoBank• NetBank
8
Effectiveness
Xchanging’s Drivers of value- Process & Automation was key within its model (40%)
10
20
30
40
50
60
70
80
90
100
1 2 3 4 5 6 7 8 9 10
Day
1 C
ost
Bas
e (%
)
Operating Year
White Space
Arbitrage
Aggregation
Process (Lean Six Sigma) and Automation.
At least 40% productivityimprovement
Service simplification1
2
3
4
5
time
9
Effectiveness
Xchanging: Deutsche Bank Transaction Bank- Greater than 20% Productivity achieved from the seven Competencies in < 2 years
10
Savings in % of Day 1 Year 1+2 Year 3-12 Total
Process 4,7% 14,7% 19,4%
Environment 1,8% 1,4% 3,2%
Service 1,3% 0,4% 1,6%
People 0,0% 0,0% 0,0%
Implementation 0,8% 0,0% 0,8%
Technology 8,4% 4,3% 12,7%
Sourcing 4,3% 0,4% 4,7%
Total 21,3% 21,2% 42,4%
Savings delivered
In 1st 2 years
Case Study
Xchanging: London Insurance Market- We started with a high-level map which “simplified complexity”!
Clie
nt / C
lient R
epre
senta
tive
Bro
ker
Xch
angin
g B
roke
r S
erv
ices
(XB
S)
Bure
au C
arr
ier
Xch
angin
gN
on-B
ure
au C
arr
ier
FS
A
Quote Placing Signing down Closing and Settlement Policy Claims & Treaty
Risk to
insure
Review and
capture details
Create
quote
document
ation
Market
submission
Select
Market
Review
documentsQuote?
Capture
brief
details
Yes
Provide
quote to
broker
Accept
quote?
Decline
quote
No
Notify
broker
Yes
Create firm
order
document
ation
Place with
Leader
Write line
Data
capture
Place with
following
market
Write line
Data
capture
Broker
completes
placing
Captures
final
details
Sign down
Produce Cover
note and Debit
note
Stop
Create
signing
documents
Send to
XIS
Review
and
capture
details
Errors?Return
paper docs
to broker
No
File
Output
messages to
W/S broker and
underwriter
Limited
knowledge of
NTU'd items
As few as 25%
of quotes may be
progressed
May be negotiation
on coverage
Average 3
syndicates
per slip
U/wtr
not
notified
Inform client
placing
complete
Paper
documents
Resolve
queries
Yes
Check
complete
Pays
premium
LIDS/PoSH LIDS/
PoSH
Tracker
Lloyd's
regulatory
reporting
Review
Review
Create
policy
Submit to
Underwrit
er
Review
policyQueries
Submit to
XIS
No
Review/Cr
eate policy
Communic
ate to
Broker
No
ReviewProposal and
supporting info
SLIP incl
Proposal and
supporting info
3 to 4 quotes
per slip
Create
own files
Note as
NTU
Advise
U/Wtr
Stop
Queries
Resolve
queries
Yes
Sign and
seal
No Return to
broker
Leader may retain
agreed copy
No advice or copy of
policy to Underwriter
Of policies signed
Average 3 Months
after inception
(excl legacy policies)
Many Policies not
supplied to client
34% error
rate
Delays whilst U/wtr
checks policy
May be created by Client,
Broker,
XIS or Carrier
144,000 policies
submissions
per annum
Data
Warehouse
Limited process to
advise Underwriters
of signed lines
Resolve
queries
Yes
110,000 Original
premium
entries per annum
(new and renewals)
Update
filesUpdate
files
Broker
captures all
data required
Underwriter
captures
minimal data
All
Underwriters
captures all
data
required
Error rate Front
office to back
office up to 60%
error rate
XIS capture all
data required
Load data
to system
UK "As-Is" London Market Insurance Industry Process Map
Snapshot of documents
when agreed.
No final version
Mismatch
to Placing
data
Rework to
resolve
XIS
queries
Signed lines
output
to Underwriters
No advice or
copy of policy
signed to
underwriter
Policy
with client
XIS produce 10,000
policies per annum
(Lloyd's only)
Financial
reconciliati
on
File
9% error
rate
Reports to Lloyd's used to
report to UK and Overseas
regulators
Broker supply
of information
to FSA
regarding
various stages
of the process
INCEPTION
DATE
35% of OPs are
delinked
Estimated only
30% are notified
Broker
places
elsewhere
Output messages to
broker and underwriter
Problems of
unallocated
cash
Contract
Certainty
achieved
Priority of
legacy Vs live
policies
(250,000 legacy
policies O/S)
LIDS/PoSH
Broker system
Carrier system
Carrier system
Carrier
systemCarrier
system
Carrier system
Process
settlement
Average 15 days
5 days Service level
5 days Service level
"Contract certainty is achieved by the complete
and final agreement of all terms (including
signed lines)
between the insured and insurers before
inception" (Interim definition)
35 days processing cycle
Average 60 days
5 days cycle
Average 3 days
Average 10 days
Average 25 days
Average 119 days
10 days (if
error free)
Average 137 days
after inception
Average 10 days (if error free)
Inception date may be within this range
1st
confirmation to
underwriter of
signed lines
and premium
Broker's Authority
to process
Up to 60%
mismatch
rate
Settlement
of
premium
Settlement
of
Premium
Approx 100 fields
to complete
© Xchanging 2005, no part of t his document may be circulated, quoted or reproduced wi t hout prior w rit t en approval of Xchanging.
KEY
Data capture
point
Decision pointKey
observation
Xchanging
system
New documentProcess step
UMR
Allocated
Risk
Registration
Not being populated
by all underwriters
Leader
registers
electronically
Record based
on UMR
SLIP
SLIP
Copy
SLIP Copy
SLIP
SLIP &
LPAN
53,000 items
registered in 2004
60,000 policies
signed
per annum
500,000 all premium
entries per annum
(OPs and APs) 1,900,000 Syndicate
advices output per
annum
Broker
system
Carrier
system
Reconcile
to risk
records
Agree?
Book to
debtor
ledger
Yes
Xchanging
process?
Yes
Submit to
carrier
No
Load
settlement
to ledgers
Claims
notification/
Treaty account
Technical
validation
of claim or
advice
Claims
negotiation
&
agreement
Request
payment
via
Xchanging
Request
payment
Client payment
& LORS mess'
Reconcile
payment
Unmatche
d cash
Client paid
Match?No
Management
and
authorisation of
payments
Credit control /
reolve cash
queries
Review
and agree
claims for
follow
market Process claim
and collect
from Carriers
Review
and agree
claims
Process
claim and
pay Broker
Capture
details of
claim in
systems
CLASS
Carrier
system
Management
& authorisation
of payments
Render to
U/W
Management of
receipts to
debtor ledgers
Resolve
queries
No
Carrier system Carrier system
Settlement
Present to
carrier
Issues to
resolve?
No
Bureau
Market?
Yes
No
Lloyd's
No
Yes
Issues with
claim?
No
Resolve
issues
Yes
Trigger
settlement
to Broker
via CA
Carrier system
Pay
premium
London Market
policy?
Yes
Send
policy to
client
No
Match?
Yes
Match to
Ledgers
Resolve
issues
No
Approx 20%
processed to
XIS
Authorise
claims
payment
Paper and electronic
processing
5 days Service level
500,000 Lloyd's
claims submissions
per annum to XCS
100,000 company
claims submissions
per annum
Broker supply
of information
to FSA
regarding
various stages
of the process
Broker supply
of information
to FSA
regarding
various stages
of the process
Broker supply
of information
to FSA
regarding
various stages
of the process
Multiple
markets may
be involved in
the process
Error rate for
matching cash?
Rework
loop
Broker to
carrier
Rework
loop
Broker to
Xchanging
Rework loop
Broker to carrier / AON / Client
Issues include errors by XBS as well as
Broker. Specialty Live would refer back to
AON.
Rework loop
Broker to
Xchanging
Rework loop to reconcile
Reconcilia
tion to
ledgers
Match?
Yes
Resolve
issues
No
Reconcile?
Yes
No
Errors?
No
Query
with
Broker
Yes
Resolve
queries
May result in
resubmission
RI or specialty?
Re Insurance
Check & analyse
(systems / coverage)
Check & Analyse
(Coverage)
Specialty
Check and analyse
(Systems)
Settlement?
No
Create A/C entry
Yes
RI or Specialty
Re Insurance
Technical
validation
of claim or
advice
Present to
carrier
Specialty
Query?
No
80% of RI queries are handled direct ly with the client, 80% of specialty queries are handled via AON
Approx 70 FTE in AON handling negotiation and queries
Resolve Issues
Resolve Issues
Via IBM Warwick to XBS
Request
payment of
premium
Premium processing was
previously within scope of client
operations. Approx 80 FTE carrying
out this function in AON
Queries with
payment
No
Resolve query with client or
pass to AON
Resolve Query
Resolve QueryYes
Bureau
No
Delinked?
Aviation?
Yes
Yes
No
No
Sectornet?
No
Credit control
Yes
Duplication of in scope activity
Duplication of in scope activity for delinking releases
XIS XCS
Expert Fees Payment Service (EFS). Within XIS but interaction with XCS for Lloyd's payments
Element of expert fees payment within XBS although not paid for by the experts
Live or Discontin
ued
Live
Smart Process: Prioritise bases on £ /
Client / Age / Complexity etc
Discontinued
Depending on Priority discontinued items may take up to 31 days to process. Priority items will move through as quickly as 1 day
Live or Discontinued
Live
Discontinued
May be an opportunity to better manage priorit isat ion to increase chances of complet ing payment
Yes Can it be resolved with
Client?
Yes
No
Can it be resolved in
XBS?
Resolve issue
Yes
Yes
RI or specialty?
Re Insurance
Specialty
Issue resolution process
No
Some queries would go out to AON and back into another area of XBS. Possible opportunity to remove unnecessary hand offs
Need for improved visibility of incoming
issues to enhance quality management and
recognise extra effort from legacy issues.
This is needed at all input points and would
form backbone of quality management
infrastructure.
Additionally the management of issues and
queries needs to be enhanced to ensure that
issues are dealt with in a timely and efficient
manner
Criteria for classif icat ion of discontinued versus live needs more clarity
Report ing is not standardised across Specialty and RI, Discontinued and Live. This leads to inconsistencies, NVA and duplicat ion of effort .
Some data on effort for report ing exists in Act ivity Analysis
A number of dif ferent tracking tools are in use. The tools are not always used effect ively leading to unnecessary queries.
Data exists on this regading volumes of queries / chasers and eff fort required to resolve
Claims processing for Aon Professional Risks (APR) Still retained in AON. Approx 60 FTE
Request
payment of
premium
Sectornet
Yes
No
Reconciliation carried out in Branch for Sectornet
Delinked?Yes
Wait for premium to
be paid
No
Premium Paid
Release delinked
item
Release delinked
item
Yes
Non delinked items
USM
BSM
11
Case Study
Xchanging: BB Project Example- Significant results delivered within 8 weeks from typical BB project
Observation
Ind
ivid
ua
l V
alu
e
28252219161310741
7000
6000
5000
4000
3000
2000
1000
0
_X=339
UCL=1214
LB=0
1 2
I Chart of Zeit by C3
Target
‚Quick
Wins‘
‚Quick
Wins‘„ old“ process„ old“ process
Learning
phase
Learning
phase
Steady process;
af ter go live of the
improvement
Steady process;
af ter go live of the
improvement
Before
After
Project Results:
• Financial Savings: € 240,000
• Process steps reduced by 48%
• Cycle time reduced by 74%
More than a hundred similar projects completed while building capability
12
Case Study
Generali: Within three years, built solid platform of 260 Lean Six Sigma GBs (p-t) & BBs (f-t) across 24 BU & Countries, plus APAC to deliver benefits and accelerate RPA initiatives
Numbers of BB/GB’s trained in respective countries#
Other 2014 2015 2016Plan 2017 Total
Active 2017
Italy 12 2 1 15 5
Germany 38 4 18 2 3 65 38
France 8 8 11 9 36 26
Switzerland 12 3 1 16 6
Spain 1 1 2
Belgium 2 2 0
Turkey 2 2 2
Austria 3 3 3
Ireland 6 1 12 19 9
Guernsey 1 1 2 0
Czech Republic 1 2 7 3 13 9
Hungary 2 2 4 4
Poland 3 3 6 2
Bulgaria 1 2 3 3
Slovakia 2 2 2
Croatia 1 1 0
Serbia 2 2 2
Romania 1 1 1
EA 9 3 5 17 4
GC&C 7 4 5 4 20 10
GEB 1 1 1
GIE 10 2 12 10
GHO 1 5 6 4
GSS 2 1 6 5 14 5
Total 47 55 62 59 40 263 148
42
14
2
7
16
23
4
2
76
8
43
1
2
3
1
Guernsey
2
23
14
2
13
Case Study
Generali: Within three years, completed 155 LSS projects delivering €20m annualised benefits, €60m cumulative and strong base for RPA
Cumulative Benefits Realised Through 2017
In-Y
ear
Ben
efit
s(E
UR
M's
)
2014 2015 2016 2017 CUMULATIVE
Completed in 2014 0.02 0.49 0.49 0.49 1.50
Completed in 2015 2.78 14.94 14.94 32.67
Completed in 2016 8.37 20.73 29.10
DELIVERED In-Year 0.02 3.27 23.81 36.17 63.27
Projects Completed in 2016
Cost Savings
Revenue Enhance-
ment
Total Annualised
Benefit
Germany 61 8.82 0.41 9.22
GC&C 10 0.33 2.79 3.12
France 16 1.56 0.95 2.51
CEE** 21 1.89 0.33 2.21
Switzerland 9 1.32 0.00 1.32
Spain* 3 0.59 0.00 0.59
GIE 7 0.36 0.00 0.36
Asia 17 0.30 0.00 0.30
EA 5 0.10 0.20 0.30
Austria* 3 0.28 0.00 0.28
Ireland* 2 0.27 0.00 0.27
Italy (Claims) 1 0.25 0.00 0.25
155 €16.07m €4.67m €20.73m
77% 23%
* New LSS programslaunched in 2016
** New LSS programslaunched in 2016 inSerbia and Romania
Proven benefits include:- Cost savings- Cost avoidance- Revenue
enhancement
14
Case Study
Generali: RPA was energized and implemented via the LSS Programme
Enhanced the Executive Champion Training by adding practical elements of Robotic Process Automation to show:
• How a process, once improved through LSS, can be optimised further
• How RPA can improve quality through improved consistency and standardisation
• How RPA can be used to improve the data available from the process
Strengthened the Black/Green Belt training with RPA by:
• Introducing links to RPA at all stages of the DMAIC cycle with dedicated RPA training and certification
• Dedicating a day to implementation of RPA and the practical support by the central team
• Demonstrating how RPA can be applied to a real process, ideally one of the training projects in the group
Added RPA as a topic in the project and program reviews held with Belts and Senior Management to:
• Improve visibility of RPA as a potential solution
• Ensure that RPA opportunities in LSS projects are identified early
• Sustain the benefits from RPA over the long term
15
Case Study
Process Excellence Operating Model
Process Excellence
CapabilitiesStandardsToolsMethods
Automation Services
Automation
Serv
ice
sEn
able
rs
Centre of Excellence
Customer Journeys and
End-to-EndProcess
Re-Engineering
Process Improvement
Operational Management
ExcellenceMigrations
Change & Implementation
Data Insights & Analytics
Provision of Resource
Capacity
16
Case Study
Global Roll-out of Process Excellence - Mobilisation, Training & Project Identification
17
Our Services
Re-work loops
Manual re-keying
Duplication
of tasks
Paper inputs and
outputs and
digitalisation/ de-
digitalisation of data
Process data:
cycle time,
defect rate,
volumes, etc.
Many hand-
offs
Multiple IT systems
may not talk
Customer Journey Re-Engineering and Identification of Opportunities Example
Developed in two half-day workshops
18
Case Study
Process Excellence Learnings & Good Practices
• Belts let loose to find and deliver projects Vs Leadership team ownership and responsibility
Top Down as well as Bottom Up approach
• Versus confining to improvements within Operations with limited front-end inputs
Engage more with Front office in real E2E
• Don’t shortcut to solutions by omitting fundamental tools to understand the process
Address the reluctance to conduct high-level Process mapping
• Belts cannot adequately focus on multiple projects at the same time; else, delivery per project results in low project completion and yield
Identification and Delivery of substantial projects
• Black Belts should not be distracted in training Green Belts or Yellow Belts, or other tasks not related to their projects
Belts should focus totally on delivering results
• They are key to ensuring projects have correct scope, to deliver required savings, right tools are used and Champion support to deliver benefits
Provide appropriate MBB Resource
19
Learnings
RPA Learnings & Good Practices
20
EFFECTIVENESS
• Leverage previous work on Process Improvement (e.g. LSS)
• Use proper framework and proper approach for creating a self-sustaining programme
• Be aggressive - Plan for scalability - prepare to industrialise (reusable components)
• Have a strong process for qualifying opportunities quickly
EEFICIENCY
• Ensure Quick ROI – most businesses targeting < 1 year ROI, with some even after 2-3 months
• Focus initially on tactical implementation for quick wins to deliver long-term success
• Ensure high robot (licence) utilisation on a single unattended (back-office) licence
• Link to advanced technologies: digitisation at source, AI/cognitive
DO’s
• Focus on pain points to drive the business to realise quick incremental benefits
• Identify opportunities where additional capacity is required and have quality issues, whatever the opportunity size
• Ensure organisational alignment that will drive success (Ops vs IT)
• Use right techniques for data collection
DON’T’s
• Don’t bite off too much in the first go and keep it simple - Start small and expand
• Don’t fall into the trap of doing a POC for every group/area or focus on ‘pilots’
• Don’t be afraid to stop along the journey if a process is not suitable for automation
• Avoid automation to speed up a defective / broken process
Learnings
Q & A
21
