1. Copyright © 2009 Accenture All Rights Reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture. Developing offshored incident management process Paavo Punkari, 26.4.2009

2. Copyright © 2009 Accenture All Rights Reserved. Agenda Background –Incident management –Objectives –Study framework Six sigma Lean ITIL Case study –Customer requirements –Metrics –Analysis –Identified solutions –Results

3. Copyright © 2009 Accenture All Rights Reserved. Incident management Today’s business processes rely on IT systems Errors or faults in IT systems may cause costly mistakes or even stop the business process Purpose of incident management is to provide quick workaround or fix to system to keep the business process running Offshoring is widely utilized to cut costs

4. Copyright © 2009 Accenture All Rights Reserved. Objectives Improve incident management process in the case organization –Define current process –Measure the process –Improve the process

5. Copyright © 2009 Accenture All Rights Reserved. Study framework

6. Copyright © 2009 Accenture All Rights Reserved. Six sigma Process improvement methodology Developed by Motorola on 80’s Combines TQM, BPR and SPC DMAIC (Define-Measure-Analyze-Improve-Control) DMADV (Define-Measure-Analyze-Design-Verify) Provides improvement roadmap with numerous tools Customer centric model Focus on removing variation

7. Copyright © 2009 Accenture All Rights Reserved. Lean Origins in JIT and Toyota Production System Only actions that add value to customer are important Continuous process flow Remove sources of waste –Batch processing –Setup times –Unnecessary movement of people/goods –Waiting times –Inventories Origins in industry, but have been successfully applied in service business

8. Copyright © 2009 Accenture All Rights Reserved. ITIL Collection of software maintenance best practices Incident management –Quick solution emphasized –Classification –Knowledge base –Solution reviewed with incident reporter

9. Copyright © 2009 Accenture All Rights Reserved. Case Telco client Captured a billing system maintenance deal from competitor New maintenance organization –No established process –No metrics –Need to improve performance Incident management identified as a primary improvement target

10. Copyright © 2009 Accenture All Rights Reserved. Customer expectations Interviewed customers to identify customer expectations Customer ExpectationCustomer Timely resolution of incidentsExternal Correct fixesExternal Sufficient service capacityExternal High offshore utilizationInternal

11. Copyright © 2009 Accenture All Rights Reserved. Key metrics Derived key metrics from customer expectations Reviewed metrics and defined target levels with customers MetricDescriptionTarget level Backlog efficiency Resolved/New incidents 0.90 Resolution time performance % of incidents resolved on time 80% Offshore performance % of incidents resolved by offshore team 70%

12. Copyright © 2009 Accenture All Rights Reserved. Measurement system

13. Copyright © 2009 Accenture All Rights Reserved. Analysis Basic analysis –Involved parties and tools: SIPOC diagram –Process flow: Cross-functional flowchart Cause-and-effect analysis –Sources of delay –Low offshore performance Pareto diagram –Sources of delay –Incident types Non-value added analysis Benchmarking Resolution time variance –Histogram of resolution times –Box plots of resolution time variance by incident category

14. Copyright © 2009 Accenture All Rights Reserved. Resolution time variance

15. Copyright © 2009 Accenture All Rights Reserved. Causes of delay – Fishbone diagram

16. Copyright © 2009 Accenture All Rights Reserved. Causes of delay – Pareto diagram

17. Copyright © 2009 Accenture All Rights Reserved. Benchmarking Identified experienced and successful maintenance organization inside the company Interviewed management Learned offshoring best practices Identified incident management best practices

18. Copyright © 2009 Accenture All Rights Reserved. Analysis results Too many different inputs –Too many types (Change requests, Problem requests) –Too many formats (IR tool, mail, phone call) –Language issues (Finnish, English) Insufficient tools –Offshore team had no access to IR tool –No real-time communication tools (except phone) Unnecessary tasks –Request information forwarded by mail to offshore –Status tracked separately in excel and IR tool Need for ad-hoc communication tools Coordination barrier between onsite and offshore Slow cooperation with CRM support team in order error cases is a major cause of delay Known errors and solutions should be stored to reduce rework Reduction in work-in-progress could shorten resolution times

19. Copyright © 2009 Accenture All Rights Reserved. Identified solutions Standardize inputs –Only IR tool requests –Only incident requests –Only in English Provide tools –Access to IR tool for offshore team –Own IRC channel for the team to enable real-time communication Eliminate unnecessary tasks –Stop sending separate mails –Stop maintaining separate status excels Make offshore team lead responsible for work queue mgmt –Reduced coordination and communication problems Established knowledge base and integrated that to the process Enhance collaboration with the CRM system maintenance team Pull system to reduce work-in-progress

20. Copyright © 2009 Accenture All Rights Reserved. Task elimination Identified and eliminated unnecessary tasks

21. Copyright © 2009 Accenture All Rights Reserved. Pull system

22. Copyright © 2009 Accenture All Rights Reserved. Results Backlog efficiency was 0.90 in May  Work piling up Backlog efficiency was 1.10 in November  Work queue reduced

23. Copyright © 2009 Accenture All Rights Reserved. Results 40% of incidents were resolved on time in June 88 % of incidents were resolved on time in October

24. Copyright © 2009 Accenture All Rights Reserved. Results Offshore team resolved 25 % of incidents in June Offshore team resolved 48 % of incidents in October

25. Copyright © 2009 Accenture All Rights Reserved. Results Enhanced incident management process Implemented measurement system Decreased process lead times Increased process capacity Improved offshore utilization Met client expectations Increased customer satisfaction