Post on 06-Apr-2018
8/3/2019 Toronto Susan Blouin Operations_management_paper - Copy
1/34
Operations Management
Process Analysis, Product, Process Design& Quality Systems Deployment
IT CORPORATION Canada Corporation
Susan Blouin
Revised Nov 1, 2011
1.
8/3/2019 Toronto Susan Blouin Operations_management_paper - Copy
2/34
Operations Management
TABLE OF CONTENTS
PROCESS ANALYSIS, PRODUCT, PROCESS DESIGN .......................................................................1
& QUALITY SYSTEMS DEPLOYMENT..................................................................................................1
IT CORPORATION CANADA CORPORATION.....................................................................................1
OPERATING STRATEGY......................................................................................................................4
OPERATING MODEL..........................................................................................................................5
HOW IT CORPORATION CANADAIS STRUCTUREDTO MEETITS MAJORISSUES...........................6
INDUSTRY TRENDS ...........................................................................................................................6
CUSTOMER SERVICE.........................................................................................................................9
Instituting a Quality Management System.............................................................................................10Analysis of Business Process Management and Process Design Related Issues...................................13
Production/Delivery Processes..............................................................................................................14
Business Processes.................................................................................................................................14
DEPLOYINGAPROCESSFOCUSEDAPPROACHTOMANAGINGWORKISNEEDED........................................14
ANALYSISOF CUSTOMERSERVICE RELATED ISSUES..........................................................................17
THE CUSTOMERDRIVEN ENTERPRISE MANAGEMENT MODELANDTHE TIES BETWEEN IT CORPORATION
CURRENT STRATEGIC ISSUES ..........................................................................................................17
ANALYSISOFTHE QUALITY RELATED ISSUES....................................................................................20
2.
8/3/2019 Toronto Susan Blouin Operations_management_paper - Copy
3/34
Operations Management
EXECUTIVE SUMMARY
The overall shift toward enhanced services and applications support results in a clear need for
closer relationships with customers and increased focus on the personalization and customization
of services. As the number of users subscribing to value-added applications continues to grow,
their expectations in terms of personalization and specialized services also continue to evolve.
The one-size-fits-all service concept becomes invalid in an increasingly fragmented marketplace.
Embracing this mass personalization will take a serious effort on the part of IT CORPORATION
Canada to meet these new needs of its new customer base.
This report will review the current state of issues facing IT CORPORATION Canada, and outline
the success criteria needed for IT CORPORATION to accomplish meeting the appropriate
objectives in order to manage their operational issues and complexities.
The analysis of the current issues will detail the related business process, customer service and
operational complexities surrounding the organization. The recommendations will provide insight
on mandatory requirements that will lead towards a new operational platform, implementing a
more customer-focused enterprise and instituting a quality management system through the
organization.
3.
8/3/2019 Toronto Susan Blouin Operations_management_paper - Copy
4/34
Operations Management
THE ORGANIZATION
IT CORPORATION Canada's presence in the business long distance, local, data and Internet
and E-Business solutions markets allows it to bundle a full spectrum of products. With its
extensive local and long distance facilities and interconnection arrangements, IT CORPORATION
Canada is capable of serving more than 85% of the Canadian business telecommunications
market on its network. Its strategic partnerships and interconnection agreements with other
international service providers, including IT CORPORATIONCorp. and British Telecom, allow it to
provide global voice, data, Internet and E-Business solutions to its business customers.
Operating Strategy
The vast majority of IT Corporation business is represented by the base of its Operating Strategy.
This is data transport, access and the hosting business where the company generates more than
90% of its revenue; where most of its capital is invested and where the vast majority of the
employees work1.
IT Corporation goal remains in strengthening the foundation of its operating strategy. This is
where the bulk of the process improvement work is going on, designed to improve the customer
experience.
1IT Corporation Proprietary, 2002
4.
8/3/2019 Toronto Susan Blouin Operations_management_paper - Copy
5/34
Operations Management
Operating Model
IT Corporation Operating Model defines how IT CORPORATION Canada will succeed by aligning
its strategies with its actions, and illustrates how the company will be managed2.
The company's goal is to achieve sustained success. This can only be accomplished with a
balanced approach.
How IT CORPORATION Canada's leadership team manages and operates the company is
reflected in the other components of the Operating Model: Mission, Vision, Values, Baldridge
Process Discipline, Improvement, Learning, and Management and Leadership.
IT Corporation Operating Model is currently surrounded by key "Imperatives" describing areas of
focus for the business that relate to Customer Satisfaction, Process Improvement, Engaged
Leadership and Growth. The core of the model remains consistent as it represents a balanced
managed system on which to operate the company. The key imperatives from 2001 have been
transformed and map very logically against the Business Priorities for 20023.
2IT Corporation Proprietary, 2002
3Ibid.
5.
8/3/2019 Toronto Susan Blouin Operations_management_paper - Copy
6/34
Operations Management
The operating organization shown below, is responsible for leading operational
imperatives which are still relevant and will be folded into how the company will
manage the business under the four banners of Customer Satisfaction, Process
Improvement, Engaged Leadership and Growth. The operating organization is
structured in the following verticals Marketing, Sales, and Customer Service that
shape the framework of the company. This is how IT CORPORATION is structured
today to meet their current issues and operational management requirements.
How IT CORPORATION Canada is Structured to Meet its Major Issues.
Industry Trends
The year 2002 is positioned to be the year value-added services and personalization becomes
the key service drivers for the telecommunications industry4. With the high level of confidence
coming from the past few years of exponential Internet growth as a network and a revenue-
generating industry, IT CORPORATION Canada and analysts believe service differentiation will
continue this growth. Time to market for new services will also be part of the service
differentiation that drives industry growth. As the telecommunications industry evolves, IT
CORPORATION Canada needs to package and deliver new services or bundles as quickly as
possible.
4Lemay Yates, 2001
6.
8/3/2019 Toronto Susan Blouin Operations_management_paper - Copy
7/34
Operations Management
KEY ASSUMPTIONS
The following are assumptions that are relative to the companys operating strategy and
operational model:
- The underlying assumptions of the operating model this was created for, are valid
- The current cost and pace of technology will continue such that the basic cost of telecom will
still be perceived as cost effective
- Continued trained workforce will still be in place
- IT CORPORATION Canada will maintain the pace to be able to move into the higher levels of
value-added solutions, towards the internet and managed network services
- Continued customer and value support
- Cost Related External Factor: The regulator environment will at least support and will be able
to enable a suitable business and competitive environment, as this can effect our cost
structure and IT Corporation operations of their business in what they are able to sell.
MAJOR ISSUES
IT CORPORATION is faced with three major issues in their current operations related to the
management and servicing of delivering non-standard custom solutions. The analysis will
address the deficiencies in business process managementand the inefficiencies in customer
service, and the need for instituting a quality management system.
Business Process Management
IT Corporation processes for approving, and managing non-standard business solutions is
imperative in order to be able to provide a systematic design and definition of the
companys processes and information, including the supporting data and systems
7.
8/3/2019 Toronto Susan Blouin Operations_management_paper - Copy
8/34
Operations Management
structure, to meet their goals and customer requirements.
Business Process Management provides common processes across services and technologies
that are essential to providing and having the ability to deliver to process cost targets and process
performance improvement.
The non-standard complex solutions are new opportunities that are requested by large clients
within the major business market space (MBM). In order to deliver the service and develop the
solution, IT Corporation Opportunity Review Council assesses the opportunity from a operating
perspective looking at the associated financial obligations, new process development
requirements for NPI, the costs to deliver and manage the solution and the revenue generating
potential.
The operating processes of IT CORPORATION are critical to the success of IT CORPORATION
being able to operationalize these complex solutions. These solutions that evolve generate
tremendous revenue and profitability for AT&T. Each non-standard custom solution that IT
CORPORATION engages in generates additional revenues of 80-200M in new revenue per 5
year-contract term5. The Opportunity Review Council approves aprox.100 of these complex
solutions per year.
From a relative standpoint the current state of IT CORPORATION is not organized to handle non-
standard custom solutions. The organization operationally is organized to handle standard
products only as they are not equipped with the appropriate processes to handle complex
solutions throughout the organization. Each organization within IT CORPORATION faces
operational issues with being able to manage non-standard custom solutions and deliver on
specific requirements on time with accuracy. At present the internally processes are manual with
no internal cost center allocation or method of tracking accountability. This poses vast operational
5Information Warehouse, 2002.
8.
8/3/2019 Toronto Susan Blouin Operations_management_paper - Copy
9/34
Operations Management
issues for each custom solution that flows through the organizations current process related to
order management, billing fulfillment processes, system design and integration, finance,
provisioning, maintenance and customer service.
In order to be able to accomplish the operating objectives successfully, IT CORPORATION
current operating processes require re-defining of its end-to-end processes to deliver to
customers and to meet its business requirements.
Customer Service
Customer Service is comprised of three areas, Provisioning, Maintenance and Care Groups that
look after ongoing customer advocacy. The Customer Service organization is responsible for
assessing their ability to manage new non-standard custom solutions, as the care group is
responsible for operationalizing the solution within the back-end of the companys network to
provide customers with telecommunications. Customer Service provides provisioning for new
services and authenticates billing handling. It also provides maintenance in monitoring network
service levels, provides ticket management and trouble resolution on all customer issues, and
initiates dispatch for alarms and troubles on the network.
Customer Service is an integral part of the supporting needs of customers and the various
customer touch points in the support of the back office.
The non-standard custom solutions present ongoing issues for Customer Service in being able to
manage customized solutions through Customer Services operating structure. IT Corporation
custom solutions often call for specialized billing, high turn-around times for maintenance and
provisioning systems, high-levels of ticket handling through the call centers and turn-around times
for meeting service levels requirements. The current structure of IT Corporation internal Customer
Care operations lacks the sufficiency of solid support and systems, process and tools to sustain
total customer care efficiencies. There is a lack of integrated and automated systems to support
the end-to-end, customer support processes.
9.
8/3/2019 Toronto Susan Blouin Operations_management_paper - Copy
10/34
Operations Management
Instituting a Quality Management System
IT CORPORATION is currently undergoing a paradigm shift towards instituting quality within the
organization. It currently uses the Baldridge System as a defined quality management system to
establish guidelines towards continuous improvement approaches and policy, including
ownership, customer focus and the Baldridge Framework.
The Baldridge framework provides IT CORPORATION with a framework and measures for
continuously improving how IT CORPORATION will run its business. The Baldridge assessment
is a disciplined approach to measuring and improving all aspects of IT Corporation business. This
is important in the growth and sustainment of IT Corporation management and leadership in
building and retaining a skilled, motivated, productive and content workforce.
The current issues that IT CORPORATION face within its organization is:
- Ineffective processes currently in place to manage day to day customer interactions;
- There is little cross functional collaboration of organizational design and the organizations
work as constricted verticals
- no system is in place to ensure end to end management of key processes
- There are no stable defined set of performance metrics
- There is a tremendous lack of accountability
IT CORPORATION requires a defined quality management system to establish guidelines
towards improvements approaches, policy, ownership and to have ongoing assessment
approaches to aid in ongoing management to address its issues.
10.
8/3/2019 Toronto Susan Blouin Operations_management_paper - Copy
11/34
Operations Management
SUCCESS CRITERIA
A summary of what are key priorities for quality improvements represent what IT CORPORATION
will require to successfully achieve in order to be able to meet their overall objectives and
succeed their current issues and operational state.
Note: The highest important weight factor ranges from 10 to the lowest factor of 1.
Criteria WeightingFactor
Business Planning/ Process Design Requirements:Implement a successful business-planning process that will be
constantly relevant and have integrity employing the right set ofmetrics with the right targets and will include the right people in theprocess.
9.0
Business Planning/ Process Design Requirements:Develop service design process to generate new product ideasOpportunity Review Council and process for review and approve ofcustomer opportunities and request to ensure feasible
10.0
Business Planning/ Process Design Requirements:New Product Introduction (NPI) process to launch newproduct/program
8.5
Business Planning/ Process Design Requirements:
Develop Product Lifecycle Management process to manage changes,enhancements, improvements and product sunset
8.5
Business Planning/ Process Design Requirements:Identify gaps in current planning process. Redesign the process andexisting financial model to close the identified gaps.
9.5
Business Planning/ Process Design Requirements:Translate strategic and operating imperatives into clear action plansand identify Senior Leadership Member accountable for each plan.
8.5
Business Planning/ Process Design Requirements:Evaluate Raw Data Summary (RDS) financial database and upgrade,
enhance, or replace as necessary.
7.0
Business Planning/ Process Design Requirements:Test key drivers for each products/cost category to distill raw inputs tothe "critical few" that forecast and describe performance.
7.0
Business Planning/ Process Design Requirements:Evaluate initial output from the operating metrics team and ensurekey metrics is included in forecast output.
7.0
11.
8/3/2019 Toronto Susan Blouin Operations_management_paper - Copy
12/34
Operations Management
Criteria WeightingFactor
Business Planning/ Process Design Requirements:Build a quarterly strategy/financial/operating review in IT Corps
Governance program.
8.5
Customer Focused-Organization Requirements:Conduct customer needs research
9.5
Customer Focused-Organization Requirements:Develop plan for segment-specific customer communications.
9.0
Customer Focused-Organization Requirements:Set up ongoing measurement, consolidated reporting and governanceprocess.
10.0
Customer Focused-Organization Requirements:Link customer satisfaction measures into operational areas
10.0
Customer Focused-Organization Requirements:Build formal feedback loops into the sales organization.
8.5
Customer Focused-Organization Requirements:Measure of customer segment profitability.
9.0
New Quality Management System Instituted for ITCORPORATIONRequirements:Identify Senior Leadership Owners
10.0
New Quality Management System Instituted for ITCORPORATIONRequirements:
Documentation and education of Quality Management System (QMS)to the Senior Leadership Team for approval.
10.0
New Quality Management System Instituted for ITCORPORATIONRequirements:Create training plan to establish Quality Management Systemknowledge and basic Quality tools and approaches
9.5
New Quality Management System Instituted for ITCORPORATIONRequirements:Train senior managers and employees
8.5
12.
8/3/2019 Toronto Susan Blouin Operations_management_paper - Copy
13/34
Operations Management
ANALYSIS
This analysis will review the issues related to Business Process Management, Customer Service
and Quality.
Analysis of Business Process Management and Process Design Related Issues
One of the issues identified internally at IT CORPORATION is the lack of process management.
This is seen more evidently in the deployment of major service rollouts of customized non-
standard solutions. The organization has not been equipped with the proper structure internally to
be able to manage the deployment of non-standard solutions effectively.
This is initially evident in the absences of a core system being in place to ensure end to end
management of key processes exist. There is very little cross-functional collaboration of
organizational design and effective process to manage day to day customer interactions.
There is also the lack of ownership and accountability with no stable defined set of performance
metrics to aid in assessing how the organization is really doing from a process and performance
perspective. Links between pricing business economics, billing and provisioning are not evident.
This largely becomes ownerous especially for the required need of tracking of multiple non-
standard services.
All of IT Corporation core processes required have not been defined to detail its end-to-end
Processes. This has shown an effect on the companys ability to deliver to customers and to meet
its business requirements.
13.
8/3/2019 Toronto Susan Blouin Operations_management_paper - Copy
14/34
Operations Management
The overall Business Process Management issues have three areas of concentration relative to
the companys requirements for product and process design. The outline below details IT
Corporation production/delivery process, business process and supporting process and the in-
debt issues/requirements related to each that represents the current gaps.
Production/Delivery Processes
Improvement is required within the five core service delivery processes Sales Order,
Provisioning, Maintenance, Care and Billing
Quality Improvement Teams are sanctioned to improve process capabilities
A problem Solving approach is required for the companys core improvement methodology
The Introduction of process management and control is needed
Introducing value add time line to reduce waste is required
Defining better the Selling, Order Entry and Sales Management processes is required
Defined, documented and improved Provisioning, Customer Billing and Collections, customer
care and fault management processes
Defining all Customer support processes is required
Business Processes
This is key in depicting how the IT CORPORATION organization will manage its key business
processes.
Deploying a process focused approach to managing work is needed
Operating performance metrics and improvement initiatives need to be defined for all core
processes and their sub processes.
Support Processes
This is key in depicting how IT CORPORATION will manage their key support processes
14.
8/3/2019 Toronto Susan Blouin Operations_management_paper - Copy
15/34
Operations Management
Applying a process approach to infrastructure, Management and support processes. Core
processes include - Network Development and Operations Processes, Systems Development
and Operations Processes. These are all processes that require strengthening.
Through the companys measurement and identification of the overall outcomes
related to its organizations state, a quarterly survey is conducted to report on the
core areas of management operations. This is measured through a Moment of
Truth (MOT) research program that is conducted by a consulting firm6.
Gap Analysis Assessment
One example demonstrated in a gap analysis in the Moment of Truth Survey identified the overall
customer care as a measure of result based on the current state of IT Corporation business
process management. This shows the impact that the lack of process and process design has on
the companys overall customer care results. The data results above are a reflection of our
6Acnielsen 2002
15.
Maintain
Quality
Some Work
Required
Work
Aggressively
Gap Analysis 50% or higher 49% to 30% 29% or lower
Overall Customer Care
ExtremelySatisfied
Dissatisfied Gap
Understanding the unique needs of a business customer 54% 13% 41%
Being responsive to customerbusiness needs
54% 16% 38%
Follow up on actions promised 48% 21% 27%
Resolving new request decisions 44% 30% 14%
8/3/2019 Toronto Susan Blouin Operations_management_paper - Copy
16/34
Operations Management
business process management system and the use and ability that our systems portrays in being
able to service customers. The data tells us that only 54% of the customers feel that IT
CORPORATION is responsive to customers and understanding their needs. 16% of the
customers are dissatisfied with IT Corporation ability to show they are responsive to customers,
and the gap analysis of 38% shows that some work is required within IT CORPORATION to show
some improvements7. Taking a look at the data that truly effects IT Corporation internal process
design, is the results shown on the length of time to resolve business matters. This measurement
is a directly related to IT Corporation internal process. Resolving issues internally is a cross-
functional requirement that involves the management and use of end-to-end processes once new
policy or decision making has been made.
Only 44% of customers feel extremely satisfied with IT Corporation ability to resolve new requests
and follow through on final decisions. The dissatisfaction of 30% is high showing the results of
customers that feel discontented with the service outcomes. The gap analysis is relatively low,
showing at 14%, which requires the company to work aggressively in this area in order to improve
customer care results.
This analysis shows the companys need for internal improvements. Based on the results from
the Moment of Truth Survey, Gap Analysis.
A full process-reengineered development and design is needed within IT CORPORATION to
show how the organization manages processes, including customer-focused design, product and
service delivery, support, and supplier and partnering processes involving all work units.
Showing how IT CORPORATION will continue to manage and improve managing key product
and service design and delivery processes is critical for operational success towards
improvement the companys overall MOT scores.
7Acnielsen 2002
16.
8/3/2019 Toronto Susan Blouin Operations_management_paper - Copy
17/34
Operations Management
Analysis of Customer Service Related Issues
The Customer Driven Enterprise Management Model and the Ties Between IT Corporation
Current Strategic Issues
IT CORPORATION currently supports a model known as the Customer Driven Enterprise
Management Model shown in Appendix A8. This detailed model shows the relationship between
the customer interface and support in the network, from sales through to billing and the process
interactions between the customer interface and the organization. All of the required touch points
in customer service that are driven by the customer are represented in this model.
The issues relate to the difficulties represented in the customer enterprise process model of
which customer service supports.
The issues identified within IT CORPORATION is the effect of the customer service
organizations responsibilities for managing non-standard custom solutions present ongoing
issues for Customer Service in being able to manage customized solutions through Customer
Services operating structure. The four areas that make up these related issues are experienced
in9:
Service Fulfillment, Service Assurance and Billing.
Timely and correct provisioning of what the customer ordered; maintaining
the service--timely response and resolution of customer or network
triggered problems, tracking, reporting, managing and taking action to
improve performance for all aspects of a service; timely and accurate bills.
8IT Corporation Proprietary, 2002
9Information Warehouse, 2002.
17.
8/3/2019 Toronto Susan Blouin Operations_management_paper - Copy
18/34
Operations Management
Struggling with Technology Deployment. IT CORPORATION
Canada faces the task of rapidly and efficiently deploying new types of enhanced
services over a variety of infrastructures. When this is combined with the problems
associated with supporting a wide range of different network elements and access
technologies, the challenges begin to multiply.
Growing Operational Complexity.With the addition of each
new network layer, the complexity of managing the infrastructure increases. This
complexity extends throughout operations and support infrastructure and from the
network components and devices to the business support and back-office systems.
Staffing the Organizations. Retaining skilled personnel who
can effectively support the complex network infrastructure remains a problem. It
seems that the provisioning, management, and support procedures are becoming
more complex than the network infrastructure itself.
The Customer Service Organization needs to continue to monitor and evaluate business needs
on an ongoing basis. There are many processes that require improvement and requires
continued adjustment of the skills and knowledge where necessary until the company is in a
position of providing phenomenal customer service.
The issues have been further identified through the Customer Value Added Survey (CVA) 10.
Results that show the customer requirements that are critical to IT Corporation processes. The
issues are addressed based on the following CVA measures:
- Repairing on schedule;
- Repair correctly the first time;
- Resolving maintenance issues in a reasonable time frame;
- Reduce the number of faults
18.
8/3/2019 Toronto Susan Blouin Operations_management_paper - Copy
19/34
Operations Management
The issues relate to all commercial and wholesale users of IT Corporation local, LD, data and
resale services including global, large and small businesses.
The primary operational indicators of the main issues are seen in IT Corporation need to improve
network reliability and reduce chronic faults on the network11.
The average Mean Time to Repair (MTTR) for most of IT Corporation services exceed the
companys standard interval, and the overall MTTR needs to be reduced in order to maintain
good customer satisfaction results. This is having an effect on IT Corporation repair costs from a
contractual perspective, which are becoming high due to the number of MTTR repairs that are
required to managed outside of the companys standard interval times. In this case, IT
CORPORATION is paying out for SLA penalties higher than what the expected contractual
expectations were at the beginning of the service agreement arrangement12.
From a high-level the following issue statement reflects the overall issues within IT Corporation
customer service operations
13
.
Issue Statement 1: Related to Manual and Usage Billing of Products14
- 100% of all usage based accounts are not billed their final month of usage.
- 75% of accounts that are e-billed for a minimum and burstable usage contains errors
- 40% of IDCS accounts that are billed for minimum usage contained errors.
11Information Warehouse, 2002.
12Ibid.
13Ibid.
14 IT Corporation Proprietary, 2002
19.
8/3/2019 Toronto Susan Blouin Operations_management_paper - Copy
20/34
Operations Management
Issue Statement 2: SLA and Performance Results between Systems and Support Organizations
- 49 % of all tickets exchanged between CS Support and Systems require multiple hand-offs.
- 63 % of the Priority 3 Tickets
- 35 % of the Priority 4 Tickets
The following diagram outlines the issue related to SLA and Performance, in the issues on tickethand-off volumes.
Information Systems and Tools are needed to support the organization due to fact that the
% of the critical data required for troubleshooting dedicated access services (IP, Customer,
Circuit) is not reliable and is corrupt, impacting efficient trouble resolution.
Analysis of the Quality Related Issues
The issues below have been indicated through internal metrics that has been developed to
identify the core quality related concerns15.
15IT Corporation Proprietary, 2002
20.
Ticket Hand-Off Volume
0
10
20
30
40
1 - 2 Handoffs 3 - 4 Handoffs 5 - 6 Handoffs 7 - 8 handoffs
# of Hand Offs Pr 3 Pr 4
8/3/2019 Toronto Susan Blouin Operations_management_paper - Copy
21/34
Operations Management
All quality attributes rated below parity.
A number of attributes have experienced significant declines including invoice design, sales
support, and reputation.
Invoice design dropped from world class to below parity.
Sales support and reputation moved from above parity to below parity.
Of all of the quality attributes, customer service is showing the weakest performance.
Customer Service has significantly deteriorated to below parity.
Network reliability/quality has significantly dropped from parity to below parity.
Repair & maintenance, billing process, and provisioning & installation remain below parity.
Dramatically lower scores than SBM and GBM.
- Significant deterioration price, and quality, in absolute and relative performance.
Quality has fallen from parity to below parity.
Price has dropped from world class to above parity.
The most important customer quality attributes continue to be network reliability/quality and
provisioning & installation. Invoice Design has increased in importance since 2000.
Emphasis should be placed on these important and poorly performing areas.
Performance has significantly decreased on all three areas since 2000.
Summary of Key Findings:
The following key findings are based on the diagram metric results for 2002 of IT
CORPORATION Canadas quality assessment16.
16IT Corporation Proprietary, 2002
21.
8/3/2019 Toronto Susan Blouin Operations_management_paper - Copy
22/34
Operations Management
The overall Customer value-added Survey score (CVA ) for quality score has dropped
significantly since 2000 from parity to below parity.
Invoice design has declined significantly from world class to below parity.
Sales support and reputation have dropped to below parity from above parity.
Customer service, network reliability/quality, and service design have slipped to below parity
from parity.
Since 2000, Quality and Price have generally not changed; however, weaker competitor
ratings have lead to some CVA improvements (i.e. Small Business Market, SBM)
2001 CVA improvements gained as a result of competitors weaknesses - loses as a result of
competitors gains
In relationship to competitors, Price is the one attribute that performs well across all segments
22.
Emphasis (impact weight) on Invoice Design hasincreased,while emphasison Service Design hasdecreased.
Emphasis (impact weight) on Invoice Design hasincreased,while emphasison Service Design hasdecreased.
AboveAbove
ParityParity
WORLDWORLD
CLASSCLASS
BelowBelow
ParityParity
ParityParity
All Quality areasperforming belowparity.
All Quality areasperforming belowparity.
96
103
97 97 97 96 9695
9492
8785
ImpactImpact
WeightWeight10%16% 10% 14% 10%49% 91%
90%
12% 10%51%
OVERALLQUALITY
PRICE
InvoiceDesign
SalesSupport
Reputation
CustomerSe
rvice
ServiceDesign
Provision
ing
&Installatio
n
BillingProcess
Repai
r&
Mainten
ance
Network
Reliabilit
y/Quality
8/3/2019 Toronto Susan Blouin Operations_management_paper - Copy
23/34
Operations Management
Despite IT Corporation efforts, CVA scores have not seen anticipated improvements
Areas of concern include Sales Support, Customer Service, and Provisioning & Installation
Measures need to be taken to address areas of weakness to promote a shift in customersperceptions of IT CORPORATION Canada
IT CORPORATION needs a defined quality management system. This will establish major
attributes and guidelines towards our continuous improvement approach and policy, including
ownership, customer focus and the Baldrige framework.
Cost Analysis and the Overall Cost of Quality Summary
One of the overall issues that IT CORPORATION faces as an organization is that its business
operations and internal organizational structure does not operate with internal cost center
allocations. This removes accountability from the organizations, with having an overall lack of
metrics and reports, which has presented a huge operational issue for the company. This places
great impact on process development and design, the customer services organizations ability to
track their internal costs and benefits to understand operationally where they are at financially,
and from a quality perspective, it is difficult for the organization to truly measure the cost of quality
as they cannot prove true cost allocations. The quality office can only look at head count to
determine the amount of resource effort and time is being used to drive and spearhead major
planning initiatives that the company is placing a great deal of financial risk on.
IT CORPORATION does not have cost of quality in place to use to drive the process, which
means that the data is not currently present to draw from as the system is not in place and there
is no collection methods or process.
Taking into consideration the tasks that is required in order for IT CORPORATION to be able to
make improvements and resolve the current issues, if viewed on a per mandate basis (the
complex solutions initiatives), what the current cost that the company is incurring due to the
23.
8/3/2019 Toronto Susan Blouin Operations_management_paper - Copy
24/34
Operations Management
current state of their organizational and operational issues. This would be an analysis of what it
would cost the company if it were to not effectively modify the organization, change its process
gap issues, improve customer service and develop a defined quality management system for the
company.
The impact of not addressing the current issues results in no future additional gross margin
benefits and IT CORPORATION will not be able to achieve operational and business growth in
order to sustain its operations, manage its issues effectively without incurring additional costs.
New systems and process improvements would add tremendous growth to the companys overall
operating issues while providing the organization with the ability to generate more revenue
growth. The above financials shows the cost benefits of applying new systems and processes
through the use of an ERP system enhancement, and what the overall margin will do to the
24.
Revenue 2002 2003
New lead management revenue1 300$ 1,200$Data churn reduction2 -$ 472$Rebate reduction3 -$ 100$
Hosting revenue ($3 K/month) 36$
Total Revenue 300$ 1,808$
Telco Cost
Telco cost on incremental revenue4 225$ 1,253$Reduction due to improved coordination5 -$ (50)$
Total Te lco Cost 225$ 1,203$
Direct Gross Margin 75$ 605$
25% 33%
Operating Expenses (Benefits)
Headcount Reductions6
1 - AISS/ORC consolidation - Jan-03 -$ (70)$
1 - NSR (per Cathy Lewis) - Oct-02 (18)$ (70)$
6 - I per Sales VP (per Ted Rabicki) Jan-03 -$ (420)$
6 - Customer Service (per D. Milligan) Jan-03 -$ (420)$
1 - Lead Management (per J. McLeod) Oct-02 (18)$ (70)$
1 - Rebate reduction (Invoicing) Jan-03 -$ (70)$
Avoid Salesforce.com licensing fees 7 - Jun-02 (29)$ (100)$
(65)$ (1,220)$
8/3/2019 Toronto Susan Blouin Operations_management_paper - Copy
25/34
Operations Management
company between 2002 to 2003. Note that by 2003, the company will have increased its margins
on its services from 20% to 33%17.
RECOMMENDATION
IT CORPORATION must apply a customer-oriented and service management approach, using
business process management methodologies, to cost effectively manage their businesses and
deliver the service and quality customers require. To manage within a service providers value
chain, a common process framework is required. The company required more effective
communications
in common process frameworks for understanding the relationships among
organizational operational process flows.
My recommendation for identifying the business process management and process design issues
is the use of an ERP related management system for telecommunication companies, such as
Blue Springs Software, that effectively ties all of the organizational processes together and effects
a positive value add for customer service operations. Blue Springs is an integrated order
management platform supporting customer management. It Optimizes business processes with
robust workflow and task management capabilities. This is a software advancement that provides
a very customer centric view in management tools and processes.
IT CORPORATION needs to become more customer focused in order to develop and effectively
sell a series of value propositions that are relevant for varying customer needs within many
different markets. This will begin by understanding their customer needs and by building a
corporate culture that's focused on meeting those needs effectively.
17IT Corporation Proprietary, 2002
25.
8/3/2019 Toronto Susan Blouin Operations_management_paper - Copy
26/34
Operations Management
Secondly, I would recommend building a new customer focused enterprise in alignment with the
customer enterprise management model to facilitate the customer service related issues more
closely.
My third recommendation for identifying and addressing the companys quality issues, is to
institute a quality management system for the whole company, that will impact the gaps in the
business process management issues, customer service issues and provide the quality
management system that is needed for the company.
There are some specific requirements that are needed in order for these new tools within the
recommendation to work well. This will require IT CORPORATIONto initially address these
recommendations in a three-phased approach.
Part A Recommendations New PlatformBlue Springs ERP System
Looking at the challenges IT CORPORATIONCanada faces in the future
suggests the need for a powerful and comprehensive service creation,
management, and business support platform. Ideally this platform sits
between the network layer and the management and applications layer. This
platform should provide a comprehensive integration across platforms and
equipment and provide an easy-to-use service delivery system for whatever
applications and transport mechanisms a customer may require. Key
requirements for this platform include:
The ability to integrate and interoperate with the
network elements and multiple protocols at the lower levels of the
network model.
26.
8/3/2019 Toronto Susan Blouin Operations_management_paper - Copy
27/34
Operations Management
The intelligence to create mappings between users and
groups, security settings and specific applications or applications
bundleswhile also mapping these management elements to the
lower-level protocols.
The need to support business goals through an efficient
tool. This tool needs to allow users, while creating a new service, to
clearly determine the infrastructure resources available and the
cost, as well as the quality of service they can obtain from these
resources.
A service layer implementing this approach constitutes itself as a business
tool for IT CORPORATIONand would interoperate with such as configuring,
provisioning, SLA metrics/enforcement and fault management.
Part B Recommendations Building a New Customer FocusedEnterprise
IT CORPORATIONCanada needs to establish a business unit with its own P&L,
marketing, sales etc. to sell solution services.
Key success factors necessary to compete in the integrated business solutions
market are:
1. Recognize it is a new business, not just amodest
line extension
2. Establish a vision and mission for theorganization
3. Create a customer-focused, quality andprocess-
driven enterprise
27.
Enterprise OrganizationEnterprise Organization
Build a fresh, customer-focused enterprise
Build a fresh, customer-focused enterprise
8/3/2019 Toronto Susan Blouin Operations_management_paper - Copy
28/34
Operations Management
4. Track P&L vigorously by projects
5. Develop effective tools to monitorperformance
and guide pricing of total solutions
6. Establish incentives which reinforceinternal and
external collaboration
7. Expect to need to re-engineer existing salesand marketing processes
8. Critically review skill sets of selected salesand marketing resources: invest asnecessary
9. Align compensation with solution selling
10. Achieve excellence in vertical industrymarketing and consultative selling
11. Extend team approach beyond traditionalsales team boundary
12. Communicate neutrality of vendor choiceto target segment
13. Offer risk sharing and innovative financingto engender trust and communicate long-term partnership
14. Recruit and develop systems integrationexpertise
15. Recruit and develop program/projectmanagement expertise
16. Recruit and develop industry expertise ontarget segments
17. Establish ongoing skills assessment anddevelopment
18. Build internal knowledge and awareness ofIntegrated Solution mission, targetaccounts, projects
19. Develop processes to allow for quick andflexible staffing ( i.e., create andconsistently update skills inventory)
20. Assess and manage the client relationship:
establish formal procedures to clarifycustomer requirements
21. Create infrastructure to achieve seamlessoperations from the customer viewpoint
22. Master third party alliances to enablecomprehensive and objective solutiondelivery
23. Leverage past experience (i.e., developglobally visible knowledge base)
28.
Marketing & SalesMarketing & Sales
Achieve world-classintegrated solutionmarketing & sales
Achieve world-classintegrated solutionmarketing & sales
Human ResourcesDevelopment
Human ResourcesDevelopment
Maximize HumanResource Utilization
Maximize HumanResource Utilization
Solution DeliverySolution Delivery
Develop client partnershipby achieving optimalsolutions to customersbusiness problems
Develop client partnershipby achieving optimalsolutions to customersbusiness problems
8/3/2019 Toronto Susan Blouin Operations_management_paper - Copy
29/34
Operations Management
24. Develop replicable project methodologiesper target segment and project size toenable quick and cost-effective delivery
25. Include post-implementation supportincluding customer training, in solutiondelivery process
Part C Recommendations Institute a Quality Management Systemfor The Whole CompanyBaldrige Framework Initiative
The Baldrige system is a customer and processed focussed mechanism that will help to
improve IT Corporation current business management process/process design, customer
service and requirement for quality issues.
The seven categories of the Baldrige Quality Criteria will provide the structure for IT
CORPORATIONto build a quality system. The categories represented in the diagram below
are18:
1 Leadership
2 Strategic Planning
3 Customer and Market Focus
4 Information and Analysis
5 Human Resource Focus
6 Process Management
7 Business Results
18Chase, Richard. B.,Nicholas J. Aguilano, F. Robert Jacobs. Operation Management for
competitive Advantage. Ninth Edition. New York : McGraw-Hill Irwin, 2001. Page 263.
29.
4Information and Analysis
2Strate
gicPlanni
ng
3Customerand
MarketFocus
1Leadersh
ip
5HR
Focus
6Proces
sManagement
7Busines
sResults
Organizational Profile:Environment, Relationships, and
Challenges
8/3/2019 Toronto Susan Blouin Operations_management_paper - Copy
30/34
Operations Management
To deploy a quality management system, a quality system architecture and infrastructure is
needed. The Quality Policy Manual would serves as the blueprint of QMS and describes the
approach used to deploy quality across the company.
This Quality Policy Manual is used to:
Communicate quality polices approaches and expected outcomes to all employees
Align all employees to quality policies and goals
Provide a road map for internal and external assessment of the Quality Management System
Demonstrate to all stakeholders our commitment to quality principles
Provide means to realize our quality policy and objectives
Systematize the Quality Management System
A commitment to continuous learning and improvement is at the heart of the quality approach.
The Plan-Do-Check-Act cycle, originated by IT CORPORATIONquality pioneer Walter
Shewhart, contains the four ongoing steps that ensure this improvement and learning19.
19Chase, Richard. B.,Nicholas J. Aguilano, F. Robert Jacobs. Operation Management for
competitive Advantage. Ninth Edition. New York : McGraw-Hill Irwin, 2001. Page 267.
30.
8/3/2019 Toronto Susan Blouin Operations_management_paper - Copy
31/34
Operations Management
The PDCA cycle is the disciplined, closed-loop approach for deploying and implementing plans
that will help IT CORPORATION to keep their goals in sight, align their people and operations,
and systematically check their progress and close the gaps. By using the cycle repeatedly
through these four phases, will help to accelerate IT Corporation progress to higher levels of
performance.
Quality Deployment Strategy
The deployment strategy for quality is shown in the PDCA cycle below. Aggressive objectives are
required to provide direction for the organization. Achieving these objectives requires IT
CORPORATION to focus on what is important and ensures that all of their resources are directly
contributing to the execution of its plan. This will require IT CORPORATION to:
- Align their operations with corporate strategic goals and objectives
- Design and manage key processes to achieve objectives
- Rigorously analyze performance capabilities and results
- Act rapidly and decisively on improvement opportunities
31.
8/3/2019 Toronto Susan Blouin Operations_management_paper - Copy
32/34
Operations Management
Performing Quality Assessments
The quality assessment process is a check on the health of the business overall and provides
feedback for high-level, systemic gap analysis and action planning.
I would recommend the need for more structured discipline processes within the move towards a
more complete Baldridge framework.
CONCLUSION
32.
Strategy, Goals &Objectives
Quality ManagementSystem
AT&T PDCA
Cycle/Methods
PLANDevelop objectives
Deploy plans
Policy Deployment
CHECKK
Evaluate execution capability
Check results
Management System
Assessment
ACT
Analyze gaps
Develop action plans
Problem-Solving Method
DOExecute plans
Business Process
Management
8/3/2019 Toronto Susan Blouin Operations_management_paper - Copy
33/34
Operations Management
This new marketplace for highly customizable service is beginning to take shape. Broadband
access providers, Web portal sites, e-commerce companies, application service providers, and
even online financial service providers are all examples of business models that emphasize the
delivery of value-added services. To better serve this new customer base, IT CORPORATION
Canada will need to start to looking at their internal management system and processes and
develop more structured processes to manage them.
The pressure to reduce time to market for new services, to react to market forces, and to move
rapidly, cost-effectively, and provide service reliably has become critical. IT
CORPORATIONCanada in dealing with these challenges face a wide range of issues and
concerns that can limit their operational ability to succeed.
The operating model can only be accomplished with a balanced approach, which means enforcing
process improvements to manage the business processes and process design, ensuring that the
enterprise customer model is a model that will be managed with attention to improved customer
care by building a fresh customer focused enterprise and through instituting a quality management
system.
33.
8/3/2019 Toronto Susan Blouin Operations_management_paper - Copy
34/34
Operations Management