Friday, December 12, 2008

Six Business Improvements in Search of a Methodology

I have six contrasting examples of business improvement here. Some of them may have something to do with service-oriented architecture; some of them may have something to do with business process management or complex event processing, or asymmetric design, or some other approach. My question is: is there an overarching methodology that we can apply before we jump to conclusions about the solution?

1. Joined-Up Service

Last year on this blog [Joined-Up Healthcare] I discussed the sad case of Penny Campbell, who died of blood poisoning after calling the health service eight times in four days. Apparently each of the calls was treated as a separate event, with no linkage made between them.

Joined-up services doesn't just mean joining up disparate events and processes. Sometimes it's hard enough to join up multiple instances of the same event/process.

So how should we classify this kind of business improvement? Is this about business processes, or about the semantics of events, or about the mapping between the "real world" and the "system world", or what?

2. Deconflicted Capability

In the military, deconfliction means keeping operations apart in order to avoid so-called friendly fire. Sometimes business improvement can be based on the same principle – introducing looser coupling between capabilities in order to reduce the cost of coordination and governance, and the risk of interference.

If joined-up services leads to tighter coupling, then this is the opposite.

3. The Problem of Product Differentiation (Too Many Codes?)

In the Lean Manufacturing world, complexity is often seen as a liability. Business improvements therefore may involve either radical reductions in complexity, or strict controls to prevent complexity-creep. Here are two recent examples, taken from a Lean Manufacturing blog.

3a. Government regulators are expected soon to overhaul the aging coding system that doctors and hospitals use to bill insurers. The new system, known as ICD-10, would sharply increase the number of codes used to define various ailments and procedures to 155,000, nearly 10 times as many codes as are currently in use. [Source: Kevin Meyer, Lean Medical Coding]

4b. According to new product safety regulations in the USA (coming into force in February 2009), all products aimed at children have to be tested for lead. If you have a lot of different product variations in your catalog, then each one must be sent off to the lab, at up to $6000 per sample. Oh, and each batch has to be tested. So a lot of manufacturers and retailers are urgently looking at reducing product differentiation by an order of magnitude, and increasing batch sizes substantially, in order to manage the cost of compliance with this regulation. [Source: Kevin Meyer, Yet Another Regulatory Nightmare]

4. The Problem of Failure Demand

In a lot of public sector services, the process is organized to respond to the demands of the citizens, and is measured in terms of its response to these demands. Unfortunately, most of these demands are caused by some failure elsewhere in the process.

For example, one government agency responsible for housing homeless people decided to build a database in order to manage the waiting list. Most of the work of the agency was then devoted to maintaining the database, rather than actually getting people into appropriate housing, and most of the interactions with the homeless people were about positions on the waiting list and data quality issues.

[Source: Systems Thinking in the Public Sector]

5 The Problem of Indirect Optimization

In the UK, the Royal Mail uses software to calculate the delivery routes for postmen. (The Independent describes this as "a fancy new piece of Canadian software" while The Telegraph quotes a Royal Mail spokesperson who claims that "The systems we use to help us plan the most effective delivery walks have been successfully used nationwide in many hundreds of delivery offices since 1996.")

Now here's the complication: who is providing a service to whom? Is it the postmen providing a delivery service to the customers, and the software providing a routing service to the postmen? In which case, why are the postmen required to walk double speed in order to satisfy the demands of the software? [Source: BBC News]

What is the nature of the supposed business improvement here? Can the software only produce a business improvement by changing the behaviour of the postmen?

6 The Problem of Through-Life Optimization

Through-life capability management is an important topic in the defence procurement world, but it also relates to heathcare, where optimization for a single heathcare episode can produce unsatisfactory and inefficient outcomes for producer and consumer alike. Here's an example from my article (with Philip Boxer) in the Microsoft Architecture Journal 6.

A clinic had been located within the Acute Trust to provide it with its own orthotics service (comparison), enabling the demand to be standardized to just those forms of demand that came from the consultants. Over time, the service itself and its budgets were standardized to align them to these forms of demand (cost). As a result, GPs had to refer patients through consultants, even when there was no real necessity to see the consultant, just to get access to the service. As a consequence, limited numbers of referrals were allowed directly to the service where the patient was known to the trust because of previous appointments (custom). The Primary Care Trust was responsible for all the patients in the catchment of the Acute Trust, however, and many of them were not receiving the service they needed. The challenge, therefore, was to enable the service to support these needs directly (destination). The Acute Trust resisted this support because of the need to fund such a service differently; and it was difficult for the Primary Care Trust to initiate because they didn't have the appropriate means for managing the balancing of the costs and risks of such a service. [Source: Taking Governance to the Edge]

This can be regarded as another type of Joined-Up Services.

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