Improvement of Order Management Throughput by 75% Leads to $1.7M Annual Savings
Information Technology is the backbone of today’s businesses. From enabling supporting Financial Management to innovative marketing initiatives, IT knits these functions together to allow a business to bring valuable products and services to customers. But what about the business of IT? What about the services an IT department requires to deliver its own products and services to its internal customers?
The IT delivery process can be broken down as follows:
- Demand Planning – The time spent working with business partners and internal customers discussing their needs, upcoming initiatives, and potential opportunities. Ideally performed during a window with enough time to allow IT to adequately plan resourcing, project timelines, and leverage technology already in use.
- Order Management – An internal customer order. Understanding the needs of the customer by scoping the effort is essential to coming to an agreement on the terms of the project and services needed.
- Project Delivery – Delivery of the work agreed upon by IT and its customer.
- Support & Maintenance – Upon delivery of the project, maintenance occurs throughout the life cycle of the system or application
Below is an example of how the services at Renaissance Data Solutions improved Order Management for a client. By employing Lean methodologies, our company strives to standardize, simplify, and automate, while improve cost, quality, and speed. To achieve these goals, process must be the main focus. To that end, DMAIC (Define, Measure, Analyze, Improve, Control) methodology was employed when looking to make improvements to this critical IT process.
The Opportunity
The IT Operations team of a Fortune 40 company requires internal Work Orders due to their large, complex global footprint. Their current Order Management process had a lengthy cycle time with a median of 20 days to complete. The customer expectation is 10 days.
The Goal
Establish a standard Order Management process that produces an internal Work Order within 7-10 days.
Issues
- Too many Hand-offs, Approvals, Non-Value-Added Steps & Wait Time
- Too much Rework due to lack of Stage Gates that would check for quality
- Requirements & Design
- Highly Manual
- No Estimation Path
- Lack of Metrics & Reporting for Continuous Improvement
Improvements
- Removed Non-Value Added Activities (e.g. Hand-offs, Approvals)
- Leveraged a Business Process Management software product to automate workflow
- Added Estimation Path and Stage Gates to reduce Rework
- Defined and Created Operational Metrics & Reporting
Results
By the numbers, the effort:
- Reduction of Process Steps: 50%
- Reduction of Rework Loops: 40%
- Reduction of Approvals: 60%
- Median Cycle Time: 5 Days (75% Improvement)
- Total Annual Cost Savings: $1,739,034
Conclusion
Renaissance Data Solutions was able to provide a re-engineered process that was enabled by technology to surpass the goal of a 7-10 Day median to process a Work Order by yielding a median of only 5 Days. In addition to the throughput being improved, the improvements also are saving the organization $1.7M and allows for higher quality data for reporting and data integration.