by Lee Fried, on 26 Jun 2007 02:38 pm
The Journey
Production System Alignment and Measurement
Since my last post seemed to be popular I thought I would write more on the subject of measurement. In the Model Line area we have been working very diligently to improve the processes by which we adjudicate our member’s benefits. The largest and most complex system we are working on is our claims production system. Basically, our production system is made up two components: the Information Systems that runs a series of checks in order to process our members benefits and the processor teams that manually work the exceptions. Both components are necessary in order to get the job done and if either has limitations or problems it impacts the other.
As we break down the silos and reorganize around product lines we are making a lot of problems visible. One of the largest problems we need to solve is to figure out how to keep our information systems groups and our processing teams in alignment. Both teams are very dedicated, hard working and focused on improving their processes. The challenge is that often the priorities of the two teams don’t match which results in a production system that is not running at it’s optimal performance.
So why don’t the priorities match? By asking five whys the root cause is mostly because we don’t have shared measures and accountabilities. Our processing teams are focused on getting today’s work done today and that is how they are measured and held accountable. Our systems teams are focused on adding new features, increasing automation, etc. and that is how they are measured and held accountable. So when problems arise with bad data coming in, system related production issues, etc. there is not the same level of urgency to get them fixed across both teams. On the other hand, when new features and enhancements are requested by processing teams there is no formal accountability for the opportunity costs of the resources required.
The fact is our teams are operating exactly as any rationale team would and they are responding to the system that management has designed for them to work in. Moving forward we need change the system and the first step needs to be a focus on gaining agreement around the same set of metrics that both teams will be held accountable against. If both teams are accountable for reducing cycle time, improvement in FTQ, and reduction in cost we can really begin to make large improvements to our Production System.
on 10 Jul 2007 at 8:06 am 1.Anand said …
There is a slight disconnect with what is mentioned here and reality.
I work in Claims Information Sytems (IS) group and we are following the Agile development methodology. In this new process, the business sets the priorities and not the IS group. The prioritization happens every month based on the need. So the discussion of aligning priorities between the processing group and the IS group does not make sense.
But, to a certain extent, what is mentioned is true. This is regarding the urgency to get something done by both groups. Claims IS group does not support just HPA Claims. They support the Web team, Finance, Contracts, eWatson, etc. This is just one reason why priorities are a little different.
The problem here goes back to an older post on managing change. Not all groups are changing at the same time and this is the disconnect. Though we cannot use a big-bang approach, this is something we have to live with during the transition phase and we are all still learning.
on 10 Jul 2007 at 10:31 am 2.Lee Fried said …
Hi Anand,
You are far more connected to the work then I am so I thank you for your comments.
I do believe that we still have alignment problems across the production system. We still struggle on a daily basis in keeping operational teams aligned, let alone supporting teams.
I believe Agile provides a lot of value in helping bridge this gap, but I would argue that just because the business teams make decisions on what the priorities are of IT projects moving forward does not mean that teams will be in alignment. Alignment will result only when the management and measurement systems come together in support of the Value Stream. Toyota has mastered this alignment and when the Andon cord gets pulled everyone knows what needs to be done to get the production line up and moving and the root cause of the problem fixed.
Please don’t take my post as being critical, I believe the work being done on both sides of the house is impressive and encouraging. And I agree 100% with your comment about change, it will take time and a lot of hard work. The important part will be that we keep learning and working together to solve the hard problems!
Thanks for the post,
Lee
on 11 Jul 2007 at 6:40 am 3.Anand said …
Hi Lee,
I do agree with you on the fact that the teams are not aligned and ‘Agile’ is not the solution. My comment was oriented more towards prioritization.
About metrics, you are right. ‘HPA claims’ and ‘ISD claims’ are not measured on the same metrics though the value stream encompasses both groups. I’m excited about the new PAs (I still have not seen it yet) where the metrics is more oriented towards behaviour.
Anand