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Business Process Improvement with Agile Methodology for Dynamic Project Management: A Case Study

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Business Process Improvement with Agile Methodology for Dynamic Project Management: A Case Study Theme: Emerging Trends in Project Management Author: Ms. Hemalatha Balasubramanyan Keywords: Process Improvement,
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Business Process Improvement with Agile Methodology for Dynamic Project Management: A Case Study Theme: Emerging Trends in Project Management Author: Ms. Hemalatha Balasubramanyan Keywords: Process Improvement, Agile, Dynamic Project Management, Digital Marketing Abstract We are in an era where dynamic project management plays a pivotal role in a project s success compared to traditional prescriptive approach. With constant changes, uncertain environment and stiff competition, success belongs to those who can adapt quickly to this ecosystem and make an early market entry. With this underlined fact, Business Process Improvement coupled with Agile Project Management approach was adopted to resolve the problems and maximize the value for one of our Digital Retail Media customers. The problems included High incidence of invoice rejection (~50%) by the customer s customer Long cycle time to process rejected invoices (3 days) Inaccurate financial reporting Longer waiting time to recognize revenue The approach also involved use of tools such as SWOT Analysis, Current State Analysis, Process Flow Diagrams, Value Stream Mapping and SIPOC Diagrams to identify bottle necks, improve the Business Processes and overhaul the existing systems. After the implementation of our recommendations, the metrics at the end of first year revealed the reduction in Invoice Rejection Rate to 17% from 50% and the cycle time to 4 hours from 3 days. The users also reported improved productivity due to increased automation and lesser rework. The approach resulted in an overall saving of $ 0.3 Million per year for the customer in addition to the qualitative benefits. With this approach proving a success in invoicing domain, we are in the process of applying the same to improve other areas such as Campaign Management, Ad Management, Social Media Management and Project Management. Table of Contents 1.0 Introduction About the customer Business Case Methodology Goals of Business Process Improvement Objectives of Business Process Improvement Approach Execution Identify Assess Analyze Design Implement Optimize Results Conclusion Acronyms References... 15 Figures & Tables Figure 1 Business Process Improvement Methodology.5 Figure 2 SWOT Analysis.6 Figure 3 Snapshot of Assessment Report...7 Figure 4 Execution approach for BP Focus Group and BPI Program Office..9 Table 1 $ Saving for implemented user stories.10 Table 2 $ Saving for pipeline user stories Introduction All along traditional approach ruled the project management arena with its orthodox methods and techniques. This approach worked for almost all domains ranging from construction and manufacturing to software industry where the project was executed in sequence and the success was gauged by the timely completion of deliverables within budget. In today s complex world, the One Size No Longer Fits All. The need for detailed upfront planning, stable requirements and environment, disciplined control methods make this approach unfit for many project management scenarios today. The environment is highly volatile and success is driven by innovation and the ability to take advantage of opportunities. Decision making has to be fast without compromising on schedule, cost, quality, safety, technology and importantly the impact on human resources. Project risks have become manifold and myriad, the scope keeps changing and suddenly, Dynamic Project Management (DPM) seems to be the buzz word now. Success is marked by how agile we are to adapt to changes. This paper details with a project being executed for one of our customers, a pioneer in Digital Retail Marketing in the United States. In 2014, the company, experienced a high incidence of invoices getting rejected by its customers with a consequent impact on the timeliness and accuracy of Revenue Recognition and Financial Reporting. The Finance Process Consulting project was kicked off to address the above issue and improve their financial processes. Business Process Improvement coupled with Agile Methodology and tools such as SWOT, Process Flow diagram, SIPOC, etc. were adopted in the project. The paper concludes with quantitative results of the Critical Success Factors, the benefits reaped and recommendations for further scope. 2.0 About the customer Ever since its inception, our customer has transformed the e-commerce properties in to channels where brands can inform, inspire and turn shoppers into buyers. They create, manage and operate online media programs or advertisement campaigns for leading retail e-commerce websites, delivering innovative, custom, digital ad campaigns for brands to reach, target and engage shoppers at the right time and place while they research brands and finalize purchase decisions. With an elite partner list, the company gives its customers a reach of more than 154 million shoppers per month. Every media ad campaign executed by our customer involves at least two external parties an Advertiser who wishes to advertise the products by buying online advertising space and a Publisher who rents out the website to run the advertisement campaign. Acting as an agent between the Advertiser and the Publisher, our customer receives a share of the revenue by creating, managing and operating the ad campaigns. 3.0 Business Case In late 2014 our customer noticed a high incidence of their invoices getting rejected, close to 50% by their customers. Once rejected, the cycle time for processing the rejected invoices consumed additional 2-3 days. This in turn had a huge impact on the following: Timeliness and accuracy of Revenue Recognition the revenue recognized in the book of accounts based on the generated invoice had to be adjusted in the subsequent months. This adversely impacted the revenue forecast. Inaccurate Financial Reporting The financial reports based on invoices and projected revenue misled the management in decision making. Good will with customer s customers the frequent invoice rejection by the customer s customer negatively impacted the good will. The objective of the project was to resolve the above issues and improve their business processes. 4.0 Methodology Based on the findings of initial study, the Financial Processes required a revamp along with some modifications to their financial systems. Focusing on providing maximum value to the customer with a short turnaround time by identifying problematic areas and eliminating bottlenecks, Business Process Improvement (BPI) coupled with Agile approach for systematic changes was adopted as the methodology for the project. 4.1 Goals of Business Process Improvement Create enterprise view of processes across customer s financial functions Establish well-defined framework for prioritization of IT investments Implement governance model for management of business processes 4.2 Objectives of Business Process Improvement Assessment of current state o Major challenges and problem areas to be addressed that shall help improve productivity and revenue Identification of Critical Success Factors Implement a Program Office Framework for prioritizing and implementing the improvement plan 4.3 Approach The project execution was divided in to following phases: 1. Identify 2. Assess 3. Analyze 4. Design 5. Implement 6. Optimize Figure 1 depicts the BPI methodology adopted for the project. 5.0 Execution Fig 1 Business Process Improvement Methodology 5.1 Identify An offshore-onshore team was set up as Business Process (BP) Focus group for process improvement. A SWOT analysis and a process audit were performed to identify the current state of affairs, problems, potential risks to the organization and improvement opportunities in addition to the following: Customer s vision and goal statement Business Process Areas (BPA) business entities to be reviewed during the engagement Stakeholder list all roles relevant to each BPA, including primary point of contact/subject matter expert Figure 2 illustrates the SWOT analysis findings. Fig 2 SWOT Analysis The process audit on Finance area based on one year data revealed the following: Financial observations: Invoice rejection rate by customer s customers was as high as 43% 6% of invoices had an aging of more than 90 days Invoice re-approval after rejection had a long cycle time of 2-3 days Others: No processes defined and documented Multiple systems for invoice processing and revenue recognition based on invoice type Duplication of information in multiple systems which resulted in data inconsistency Manual intervention required at multiple points Based on SWOT analysis and audit findings, Campaign Invoicing area was prioritized over Revenue Recognition and Financial Reporting for business process improvement taking in to account the impact on customer s revenue and good will. 5.2 Assess The Campaign Invoicing function was analyzed in detail end to end with stakeholders; the processes mapped and value stream analysis done. The As-Is process for each BPA was modelled using swim-lane diagrams and end-to-end processes documented to get the Big-Picture view of processes, integrations and dependent systems across BPAs. Microsoft Visio was used for Business Process Modelling. These deliverables were signed off by the customer to ensure consensus on the understanding. The problem areas, process gaps and bottlenecks were identified and an assessment report was published which included Process documentation status for each BPA Problem areas / gaps identified for each BPA Current Invoicing landscape Identification of Key Performance Indicators Concerns raised by stakeholders for each BPA Figure 3 illustrates the snapshot of the assessment report. The following questions helped in analyzing the current state. a. Where in the process are the bottlenecks? b. What are the non-value adding tasks? c. Which are the process failure points and time consuming steps? d. What are the reasons for failure and problems? Fig 3 Snapshot of Assessment Report The assessment phase revealed the following facts: Multiple systems and trackers were in use for invoicing which increased the number of interfaces and reduced data consistency and integrity across systems System features were not utilized to the full extent Manual intervention required at many spots which increased the cycle time by 2-3 days after rejection 5.3 Analyze For every identified process gap and bottleneck, process improvement recommendations were arrived at after careful analysis and evaluation of alternatives. The areas or features to be automated were also identified. The desired state was visualized and the To-be process suite including processes, templates and control points was documented. The Critical Success Factors (CSF) for the initiative were defined as Reduce invoice rejection to 5% from 50% Reduce cycle time to 20 minutes from 2-3 days for rejected invoices On time and accurate revenue recognition Reliable and accurate information as a single source in the Enterprise Campaign Management system 5.4 Design A Business Process Improvement Program Office team was set up for the design, implementation and optimization of the customer s systems based on the BP Focus group recommendations. This team arrived at the system level improvements to address the corresponding process improvement recommendations and system level gaps. The BP Focus group and the BPI Program Office team developed a Process Improvement Plan for the implementation of recommendations in an iterative and incremental manner following Agile methodology. The required system level changes were converted in to user stories and estimated. The Product Owner prioritized the user stories in to sprints of four weeks based on the value-add to customer, priority of features and time-to-market. For each sprint, the Program Office team designed the system architecture for the various system level changes. The changes were implemented and tested at unit, system and integration levels. A final acceptance test was performed by business users. Based on the Critical Success Factors defined in the previous phase, the metrics to measure the process and system performance along with the Return on Investment (ROI) were defined. A set of campaigns were selected by the Product Owner for piloting the changes and a Roll-out plan was devised for each sprint comprising of training plan, adoption plan and measurement plan. 5.5 Implement The system level changes were implemented as incremental releases every month. The training courseware was prepared for the revised processes and systemic changes, and training imparted to the pilot users. The system and the process performances were monitored quantitatively. The following metrics were captured, analyzed every month during pilot phase to gauge the effectiveness of the implemented changes and the findings reported to the Executive Leadership team. Invoice rejection % trend Cycle time for rejected invoices Invoice revision amount & count Reduction in invoice revision due to personnel and systemic factors 5.6 Optimize The implemented changes on pilot campaigns were periodically reviewed by closely monitoring the metrics and gathering the pilot results and feedback from users. The processes and systemic changes were fine tuned to improve the performance based on feedback and pilot results. The pilot results indicated a downward trend in invoice rejection and subsequently an enterprise wide roll-out plan was prepared and training provided to all the end users of Campaign Invoicing. The recommendations continue to be implemented and monitored and when complete, subsequent areas shall be evaluated for business process improvement. Figure 4 illustrates the execution approach followed for BP Focus Group and BPI Program Office for each BPA in an iterative manner. Fig 4 Execution approach for BP Focus Group and BPI Program Office 6.0 Results An interim analysis of metrics as of December 2015 revealed the following results: Invoice rejection rate melted off to 17% from 43% by implementing 34 out of 78 recommendations Cycle time for rejected invoices shortened to 4hrs 1day/invoice from 2-3 days/invoice The implementation of process improvements and system level changes resulted in an effort saving of $50,521 per month which sums to 3 million on a pro rata basis for 2016 taking in to account the implemented and pipeline recommendations. The Return on Investment for the customer for 2015 indicated 2.3% which is a positive sign of the benefits starting to reap in. Considering the magnitude of impact the pipeline user stories shall create when implemented coupled with the benefits of already implemented features, the ROI is sure to be a whooping figure in the long run. Table 1 & 2 indicate the $ saving through implementation of Done and Pipeline user stories. Table 1 $ Saving for implemented user stories Table 2 $ Saving for pipeline user stories The qualitative gains attained include Less time to revise rejected invoices Decreased manual effort in processing invoices and individual opportunities Crisp content in invoice Data consistency across systems Improved accuracy in revenue recognition Reduction in interfacing systems Improved financial reporting and decision making 7.0 Conclusion The interim results as of December 2015 indicated that the process improvements and system changes for Campaign Invoicing have been effective in reducing the invoice rejection by 26% and the invoice processing cycle time to less than a day. The users also reported improved productivity at work due to increased automation and reduced rework. These metrics can further be improved to reach the target by 2017 when all the processes and system level recommendations are implemented, analyzed for effectiveness and continuously improved. One of the reasons for this initiative to be a success is the modification to the existing systems to make them in synch with the improved processes. This also helped in fully exploiting the features of the existing systems without investing on new technology and infrastructure. The Agile approach for the system changes helped in adding value to the customer at a very early stage and proportionately increase them in an incremental manner. As the business process improvement for campaign invoicing area is a success, the same approach shall be implemented for other business areas such as Account Management, Sales Management, Social Media Management, Business Intelligence, Project management and so on. As the processes and the systems were redesigned with value to customer in mind, the agility is guaranteed if the recommendations are implemented in true spirit. 8.0 Acronyms BP BPA BPI CSF DPM ROI SWOT SIPOC Business Process Business Process Area Business Process Improvement Critical Success Factor Dynamic Project Management Return On Investment Strength, Weakness, Opportunity, Threat Supplier, Input, Process, Output, Customer 9.0 References 1. Customer s intranet portal 2. Customer supplied documents Project Charter, Project Plan 3. My organization s Quality Management System for processes, templates and control points
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