Copyright © 2007 Six Sigma Academy International, LLC All rights reserved; for use only in compliance with SSA license. Strategic Process Management Overview June, 2007

Pg 1 Process matters! Resources/ Cost Inventory/ WIP Capital People Capability/ Capacity Speed Quality Understanding of customer needs Culture How we work (teamwork, openness) Continuous learning/ improvement Alignment with strategy/empowerment Typically, 20-40% of a company’s resources are tied up in the costs of poor quality and non-value added activities The average company can reduce processing time 20-30%, while improving quality and alignment with customer needs Process management can fundamentally change how a company operates (break-down silo activity; drive data driven decisions) Process drives……with substantial impact

Pg 2 Business Process Management today New challenges: Existing operations are leaner More dispersed operations and partnerships Need results faster Less top-down command and control from the c-suite Old methods have unearthed low- hanging fruit New opportunities: Availability of more information (financial and operating data) More empowerment/ autonomy at lower levels in the organization Well developed frameworks and tools The traditional approach to deploying process improvement within an organization doesn’t meet the new challenges of today’s companies

Pg 3 Strategic Process Management (SPM) A Simple, Results Focused Solution Approach 1.Understanding your business & how processes add value 2.Improving core processes in a systematic, predictable way- then repeat 3.Develop the requisite skills, experience & knowledge in your team to support the change (Just-in-time training) 4.Create and hand-off the appropriate infrastructure to control past efforts and drive continuous, self-directed improvement Key SPM Steps Align Strategy and Process Ongoing Improvement Improvement Efforts (Rapid Improvement Projects – RIPs)

Pg 4 Strategic Process Management - SPM A new approach to drive strategy New Model: Faster results - Quick hits in 2-3 months, Sustained results in 12 – 18 months Low Investment % less client resources Structured to drive strategy and key operating metrics Flexible in approach - adapts to different situations and investment scenarios High quality of results % improvements in margin Scalable – 90 day cycle efforts

Pg 5 SSA’s Unique Approach Quickly delivering sustainable results Scope the opportunity – Business Relationship Map Execute – Rapid Improvement Projects (RIP) and Replicate across a number of Vital Few Value Streams Roll-Out and Sustain - Penetrate an increasing number of business units, locations and other entities 123 Understand how processes add business value; align strategy & processes Improve core processes in systematic, predictable way – then repeat Continuous, self-sustained improvement across the organization 1 Week60 – 90 days9 – 12 months $$$

Pg 6 1) Scoping and Opportunity Identification  Maps business by function and by value stream -By function to understand how resources are being allocated (the cost equation) -By value stream to understand how resources are used to create value (the value equation)  Results in a comprehensive view of business operations, an understanding of how value is created through cross- functional processes, and clearly identified opportunities for improvement -Spotlights imbalances between costs and value – i.e., where costs don’t result in appropriate value for customers -Shows interdependencies between functional activities -Provides a roadmap for prioritizing improvement initiatives by “peeling back the onion” -Identifies “Just do it” actions and initial RIP opportunities What makes it unique? By adding business metrics we align process to strategy Engages a cross functional team It is highly actionable Can be accomplished in days, not weeks

Pg 7 Business Relationship Map - BRM Aligning Strategy to Process to Execution Enterprise-wide BRM Framework Time Quality Cost Time Quality Cost Time Quality Cost Time Quality Cost TimeQualityCostTimeQualityCostTimeQualityCostTimeQualityCost Operating Function (Sales) Operating Function (Marketing) Operating Function (IT) Operating Function (Finance) Key Value Stream: i.e. Customer Acquisition Key Value Stream: i.e. Order Fulfillment Key Value Stream: i.e. Cash Management Key Value Stream: i.e. Manufacturing The Value Equation The Cost Equation

Pg 8 2) Execute the RIP opportunities  A Rapid Improvement Project (RIP) is…. -Well defined and chartered process improvement opportunities -Clear improvement goals with detailed project plans -Established success metrics -Team based approach  Implement RIP improvements with SSA lead, and train employees through “apprenticeship” methods -Identify company lead(s) who manage the process for 3-5 months (generally 2-3 internal resources per RIP) -Each RIP involves process participants (during the event) resulting in multiple employees being touched -Average benefit per RIP is 20-30% cost/capacity free-up What makes it unique? Very fast results Engages all core constituencies Structured approach leveraging both Lean and Six Sigma methodologies Low risk to the client Engages critical breadth of organization with least amount of disruption

Pg 9 Strategic Process Management Deployment Options  Using the SPM approach you can improve the business performance of a: -Value Stream -Mega value stream -Functional area -Business Unit -Business – full deployment  In large deployments the BRM and RIP activities are focused on the high priority areas of the business, resulting in fast improvements  As RIP events are implemented and Six Sigma projects are identified, on demand BB and GB training classes will be conducted, resulting in the optimal # of Belts to support the business  The Leaders, Project Champions, and Functional Champions are trained as we move through the organization, which results in the optimal infrastructure to support the deployment

Pg 10 Update BRM’s Benchmark new ideas Develop new approaches Train-the- Trainer Digital Platform Body of Knowledge Project chartering Project tracking Financial validation The transition to self-sufficiency is based on 3 pillars geared towards transferring ownership ASAP Key deployment & business processes infrastructure 3) Sustain the gains for your projects and continuous improvement efforts Resources and training to sustain results Continuous Evolution

Pg 11  Create “pull” in an organization, as opposed to being driven solely by top-down effort -Success demonstrated up-front -Easy to understand methods and clear tie to “what matters”  Less full time resources necessary -RIPs are executed with part-time support -Corporate staff to manage ongoing operations is minimal  Practical investments in training and infrastructure -Just in time training, as opposed to “train first, do later” -Simple project and financial tracking processes and systems Delivering results that matter  Investment characteristics in-line with current investor demands -Deliver short-term results (quick payback)… -Real benefits within 2-3 months % capacity freed-up for targeted processes -…with a plan for long-term significant impact -Goal of 5-10 points of margin over time  While generating significant cultural change -Significant number of employees participating in the process and learning new ideas, methods for working as a team Structured to fit the realities of today’s corporation Delivering real results

Pg 12 Case Study Company Profile: Multi-billion dollar financial services company Leader in their industry Problem: Need to increase capacity while maintaining current cost structure Increase customer value without increasing costs Broadly dispersed and inconsistent process Our Solution – Strategic Process Management: Conducted Business Relationship Map of the business Identified, prioritized and executed RIP’s across 5 key value streams Apprenticed client key staff Provided on-demand leadership and Black Belt training Results: Faster through-put: 50% reduction in processing time (breakdown of contract package, completion of discounting checklist, identifying booking code, and DMS sheets) Less waste: Reduction in held orders (quality defects), reduction in concurrence volume and tasks, reduction in NVA credit investigation (FICO minimums) Reduced cost: All of the above with 20-30% lower cost or increased capacity for growth “It empowers you to be able and solve these problems and gives you the tools and the ability to do that. Which is great!” Area Sales Manager, Client Company

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