10% 20% 30% What’s a “Good” Process Improvement?

 

By Craig Reid @ The Process Ninja | November 28, 2013

 

6a00e554fa70848834019b00f6150d970c-800wiI’m often asked by clientswhat levels of improvement they can expect from mI’m often asked by clients what levels of improvement they can expect from my work. Clients are fascinated by pinning a percentage on each process so that they can show this to senior managers and say “We’ve saved 30% of the total cost of the process!”

But let’s clarify a few things here…

But let’s clarify a few things here…

Firstly – what time are we measuring? Is it elapsed time or actual effort time:

  • Elapsed time refers to the total time from start to finish of the process from the customers point of view.
  • Effort time means the actual amount of time your staff take to do work in the process

A classic example is that it may take 2 minutes for your staff to write an email (effort time), but if the email sits in an inbox for 2 hours that is adding to the time of the overall process (elapsed time).

Both types of timings are important depending on the goal – elapsedtime has a greater customer impact (“OMG! Why is it taking so long!”) whereas effort time is a more telling diagnostic for efficiency. Of course a reduction in effort time also decreases elapsed time – and it is still possible to have a process which is efficient in terms of effort time but a laggard in elapsed time (watch out for those sneaky ones).My tip is to measure both for whatever process you look at.

So what is a “good” level of improvement? Well it’s not quite that simple. A 0.5% elimination of effort time can be a fantastic improvement – it all depends upon one very crucial ingredient:volume.

A small improvement upon high volume can result in huge savings – take the example of a company that receives millions of calls to it’s contact centre – shaving even seconds off a call can be a huge cost saver. Converesly, if you can save 75% of effort time off a process that is only conducted 200 times a year, the costs of implementing the process change may outweigh the benefits.

So to answer the question, there’s no such thing as ”good” percentage improvement in terms of effort time – it has to be measured along with volume. But to quash the fires of curiosity I’ve achieved effort time reductions on processes up to 75%, but commonly from 30-70%. If we look at elapsed time, a percentage reduction on its own can be a useful measure – but again transaction volume should be taken into account as part of the cost / benefit analysis.

Courtesy to Craig Reid. This blog is also available on The Process Ninja.