Workflow for Outsourcing

Outsourcing Sign

There’s no question nowadays that the majority of work is being off-shored overseas, with the largest areas being customer service, bookkeeping and computer support.

Outsourcing is a strategic move that has become more common and favourable for many organisations, in order to cut costs and gain a competitive advantage. It provides the opportunity for organisations to utilise skills and expertise that were not available internally, without having to invest high amounts of money in recruitment or local expertise.

It provides important benefits of being able to outsource back end tasks such as data entry to overseas service providers to save money and resources, and then concentrate on core business activities.

Most organisations deal with a large volume of paperwork every day. With the increasing amount it can become difficult to manage, which often leads to errors and loss of information causing inconvenient delays and re-work. Especially in a large scale organisation this is an inefficient use of time, equipment and staff resources which can result in significant financial loss.

Workflow automation software can assist with this. It provides a structured, centralised system with data storage in the cloud, allowing you to effectively track business processes as they are completed and sent internally and to outsourced vendors.

Workflow software is ideal to assist with outsourcing work such as form processing. An example is a large scale insurance organisation that had implemented workflow software to replace their previous system.

Their previous arrangement involved handling insurance policies which were sent to various staff, brokers and other organisations through email and phone. The tasks involved staff making decisions, transferring documentation, communication and follow ups, all done through multiple communication channels making it difficult to monitor.

After implementing the workflow system, it allowed them to efficiently outsource back end tasks to service providers in Mumbai. The dozens of staff involved in processing the policies could then concentrate on other important issues, and the work was carried out by brokers in India to complete.

Main benefits of workflow for outsourcing:

  • Lower costs – compared to Australia, labour costs are typically less in countries such as Asia and India.
  • Better quality – access to the world’s skilled expertise at a lower cost. You don’t have to invest in finding, training and managing employees.
  • Free up resources – allows you to free up internal resources for core activities, to grow the business instead of wasting energy on back end operations.
  • Time difference – the difference in time means that work can be completed while your business is closed, keeping the productivity continuously flowing.
  • Risk reduction – having an offshore partner means in the event of disaster, recovering their backups means you haven’t lost everything, which will assist getting your business back on track.
  • On demand – temporary booms, seasonal or simply ad-hoc work, you can choose to employ more or less staff depending on your businesses situation.
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10 Benefits of Workflow

Toy car

There are multiple reasons to consider using workflow in an organisation, as it can automate and improve processes in all areas of a business.  The most notable example of workflow being the assembly line (as previously presented), helped to shape the standard of workflow, not only for car manufacturing but for all industries.

The Toyota car company adopted Ford’s assembly line in the 1950s to develop their own lean production system. Over the following years, the benefits of their system resulted in:

  • Productivity increases between 300% to 400%.
  • Labor productivity increased an average of 25% a year.
  • Defect rates reduced from over 2000 to less than 50 parts per million, and in many to less than 10 parts per million.
  • Cost of quality cut by over 60%.
  • Work-in-process inventory cut by more than 80%.

So here are 10 good reasons for how workflow can benefit any business:

  1. Workflow can help by identifying and removing the unnecessary steps/processes.
  2. Modifying the order of the steps can make the process more efficient. For example, some steps could run simultaneously as opposed to sequentially.
  3. Tasks can be assigned to the people with appropriate skills to perform the task, rather than allocating to anyone who needs work to do. This is a compromise in quality!
  4. Management can concentrate on strategic business oriented activities, rather than the day to day operational tasks, such as task allocation and monitoring progress. This means the organisation can grow as a business.
  5. Workflow has provisions to answer all possible questions that arise when deciding on or actioning a task. This helps an individual’s work confidence level, which in turn reflects in the quality of the outcome.
    It answers question like: What actually needs to be done?, Who am I doing this task for?, How long should I take to perform this task?, Who else is involved in the process?, What will happen after I action this?
  6. Workflow follows a sequential order. It ensures that all steps have been completed correctly (especially areas typically prone to human error) and checkpoints met before moving forward.
  7. Paperwork and paper chasing is eliminated thus reduces wastage and saves time. Automatic routing with no paper handling and fast travel time will significantly cut time. The constant movement of the workflow means once a person has finished their part, they can immediately pass it on, so it doesn’t sit around where it can get forgotten or lost.
  8. It improves visibility. Tracking can allow a staff member to instantly check the status of the item. It allows the key people to see the critical processes at every point, identifying problems, and bottlenecks, and monitor end to end performance throughout.
  9. Decisions that were determined by people can be made by the workflow, based on businesses rules that can be made to represent human decisions.
  10. Since the workflow is linked to a database, it keeps a record of what occurs in the system. An audit trail shows who, what, when and what actions were performed.

In summary, workflow provides major benefits for any organisation. The ten identified are just some of the many benefits of workflow. It makes an organisation become more efficient by helping to save time, remove wastage, cut out unnessecary work, better use of human resources, which overall saves money and will help an organisation to grow and improve.

Workflow Strategies for getting around chokepoints

 Forgive me readers but it has been 3 weeks since my last post.

What are chokepoints?

For the sake of business processes chokepoints are usually a single location within a larger process in which a disproportionate amount of time is spent either waiting for the activity to become accessible of waiting for the activity to be completed. 

 

 

What’s wrong with Chokepoints?

 

Over the 6 years I have been involved in the workflow/BPM space I have found that the majority of time spent completing a process from beginning to end is usually dependent on less than 20% of the activities within that task.  These slow activities can be costly.  Those costly exercises can be anything from, constant follow up by Managers to deadlines being missed.

 

Why do they occur?

 

Lack of sound process design

Lack of resources

Lack of process knowledge

Lack of automation

Poor Scheduling and allocation of resources

 

How do you find them?

 

Within many workflow systems there are built in reporting facilities which at a glance shows you where the most time is spent from when it arrives in a Task List to when it has been completed.  If you don’t have such a system all is not lost.  Most often you can just ask the people who work within the process what or who they are usually waiting on.  In fact they have probably volunteered this information to many people many times.

 

How do you eliminate chokepoints or minimise the effect of chokepoints?

 

It is important to ask several key questions to begin the chokepoint elimination process

1) Can your single chokepoint activity be broken up into more then one activity?

1.1) If it can be broken up can the two or more tasks be placed in parallel?

2) If it can not be placed in parallel can different resources be given to some of the newly created tasks or activities?

3) Can the chokepoint activity be placed more in parallel with other activities?

4) Can more resources be assigned at the chokepoint?

5) Can any part of the chokepoint be automated?

6) How can you escalate this task if it is taking to long?  Can you reassign it?  Can you send an alert when it is taking to long?

7) Can scheduling play a difference (your task has been placed in a queue at position x and will be completed in x amount of time) helps the resource performing the task as they no longer have to spend their time responding to queries regarding an activity status.

8) Can you establish an overflow mechanism?  The overflow mechanism means taking a path of least resistance once the resource is operating above capacity.   (This may have negative effects on quality however an ever growing queue is likely to have an even greater effect.)

 

What to do once you have eliminated to slowest link?

 

Once you have eliminated your chokepoint you will find that you have a new, although somewhat less problematic, slowest point in the chain.  So you must start the process all over again.  The thing to remember about Business Process Management is that it is not about providing a once off increase in efficiency it is about providing a platform and a methodology for continually increasing efficiency.