Analyzing a BPO's Operations Management Using DMAIC Methodology

This business report presents a case study of a Business Process Outsourcing (BPO) company, managed by AJ Lauren, focusing on its Employee Benefits Outsourcing (EBO) division. The report analyzes the current situation, highlighting operational challenges impacting customer satisfaction and profitability. It then applies the DMAIC (Define, Measure, Analyze, Improve, Control) methodology to identify process gaps, analyze performance metrics, and propose improvement strategies. The report emphasizes the importance of staff training, resource allocation, and the potential of a new case manager position to enhance service delivery and efficiency. The report concludes with recommendations for implementing these improvements and maintaining control over the optimized processes, ensuring sustained customer satisfaction and profitability for the BPO.

Operations Management
[DATE]
HP
[Company address]

Running Head: Operations Management
Contents
Introduction...........................................................................................................................................2
Situation Analysis..................................................................................................................................3
DMAIC methodology............................................................................................................................4
Conclusion...........................................................................................................................................11
References...........................................................................................................................................12
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Running Head: Operations Management
Introduction
This business report is compiled to study the case of a BPO, managed by AJ Lauren, who is
the executive vice president, and handled the (EBO) Employee Benefits Outsourcing business
of the BPO. The study of the case will further lead to analysing the situation and developing
the improvement methods. Not to forget, post improvement to sustain the improved standard
control measures are equally important. The case will illustrate application of six sigma
process improvement method to improve productivity and efficiency in the outsourcing
business (Adizes, 2015).
The EBO division was one of the fastest growing business of the BPO Inc. Multitude skills
like leadership, managerial, negotiating, patience, and to be able to work under high pressure,
are a few skills that are required to manage an outsourcing business. The steady growth of the
outsourcing business over the past years has resulted into creation of new job positions and
hence developed requirement for new managerial skills. Many businesses come across a
major issue of rising staff cost, when they try to generate the profit. A proper balance needs
to be maintained between improving the sales and service of the business and controlling the
costs, to struck effective management of the outsourcing business (Khatri, 2009).
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Running Head: Operations Management
Situation Analysis
The company is facing difficulty in clearly understanding the issues and what could be the
right method to solve the issues without further creating new problems. The initial problem of
replying to HA’s CEO is already there and connecting with the same is to identify the best
possible method of getting a control over the operational issues so as to improve the
productivity of CSRs and BA’s (Srinivasan, 2017). There does exist gaps in the process
which causes delays and problems in reverting to the customers which in turn affects
customer satisfaction level. These process gaps need to be streamlined to a level where there
exists optimum utilization of resources and further increases the profitability level achieving
customer satisfaction.
AJ Lauren, already working with Ethan and Jerry on the six sigma black belt project which
he is sure will help him improve the operational issues. He is clear in his mind about the
objective, however needs further clarity on each and every step involved in improvement
process as needs to update the status to top management (Wipro, 2010). Post his meeting with
Ethan and Jerry, he is aware of the six sigma project status and also how he will revert to the
email of HA’s CEO. With the clear status in his mind, he also has some more questions
which he wants to solve within next 2 weeks so that immediate actions can be taken to bring
improvements (Ray & John, 2011).
Six sigma is a quality improvement methodology used to improve the processes by analysing
process steps, identifying the elements which need improvement, developing element
alternatives, and then implementing the improvement elements (Kannan, 2006). The five
phases of this improvement methodology is called DMAIC (Define, Measure, Analyse,
Improve, and Control)
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Running Head: Operations Management
DMAIC methodology
The DMAIC methodology for process improvement is shown below in the form of the
diagram.
(Bisk, 2017)
The next part in the report will show all the five phases of the DMAIC methodology for
process improvement which will include – Define, measure, analyse, improve and ends with
control (Erdem, 2007).
Define: - Ethan defined the project as Health and Welfare Service Delivery Process to
develop its simulation model so as to understand the operational problems, impact of
resources on performance metrics, identify solutions and improve profitability and customer
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Define
Measure
Analyse
Improve
Control
Identifying an opportunity and defining a project for improvement
Analysing the current process and specify the required outcome
Identification of root causes and proposing possible solutions
Prioritization of solutions to accordingly select, plan, validate and implement
Developing a plan to measure the progress and maintain the effectiveness

Running Head: Operations Management
satisfaction levels. He could well identify that the problem was somewhere in the operational
level of the Health and Welfare Service Delivery Process, that was negatively impacting the
customer satisfaction level and profitability of the organization. The performance metrics
need to be rigorously analysed to further deep down on the problem area and resolve the
issues (Ogdoc, 2015).
Measure: - AJ Lauren, the Vice President of the BPO, has an objective in his mind and also
has a positive attitude to solve the operational problem at the earliest. He, therefore works
with Ethan and Jerry on the six sigma project to resolve the issues positively, leaving no
scope for process gaps. The main motive of every company is to achieve customer
satisfaction. So as to achieve their goal, they want to train the staff in a professional manner
to give quality service to the customers. They want to make a robust operational plan for the
company and hence needs to analyse each and every step of all the processes to identify the
gaps, resources, issue areas and better monitor the performance metrics (Berg, 2008).
The black belt project undertaken is the opportunity to improve all operational problems. A
thorough study and analysis of each process is to be done to understand where the resources
are getting stuck to revert to the clients with a solution to their queries. The end objective is
to empower the resources with all required data on time and to increase their efficiency by
multi folds to achieve high client satisfaction level (Barjis & Pergl, 2014).
Jerry analyses various processes and shows details of it through various exhibits. The first
option in their mind was to improve the efficiency utilizing the existing process and system.
The various processes have certain gaps and lapses which leads to a wastage of a lot of time
from the end of CSRs and hence affects the customer satisfaction level. The time taken by
each CSR to resolve a client query at their level if still fine, but the time taken by the CSRs to
get the report and data from BA’s and then revert to the client is much higher than the
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Running Head: Operations Management
standard performance metrics. A huge differentiation is there in the minimum and maximum
time taken at various steps of the process. This time differentiation needs to be monitored
better to achieve better performance metrics and better tracking of the efficiency and
effectiveness (Meyer & Scrima, 2006).
Analyse: - On analysing the Exhibit 4, team of 7 CSRs are handling the same client, with 2 -
3 CSR at a particular time. The same exhibit also shows that few CSRs are overloaded and
few are handling only a single client.
Exhibit 7 shows that only 37% of CSR utilization is happening, which leaves a lot of time of
CSRs being wasted, which also leads to increased costs (Li & Meissener, 2013).
Lauren’s meeting with Ethan and Jerry to get a status of six sigma black belt project gives the
details of the process improvement project undertaken by them and the measures identified
and studied to do the analysis. Jerry found that there were certain gaps or issues while
integrating of database update process, which is done in batches, with the participant care sub
process, which is done in real time. While he could develop the process map, he faced some
challenges in getting the processing time data for the CSRs and the BA’s. He could resolve
this there itself by giving form to the BA’s wherein they were required to record the
processing time themselves (Sharma, Pandla, & Gupta, 2014). However, for the CSRs, the
system records the call durations, but the system does not record the duration for which the
client is kept on hold. This was an area where the specific improvement plan needs to be
made so as to eliminate the requirement of putting the client on hold, despite giving training
to the CSRs for not doing so.
They also identified that many of the resources were underutilized, leading to gaps and
unnecessary increase in cost. The focus is to develop a plan to identify how many resources
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Running Head: Operations Management
are required in the CSR team and how many in the BA team. The plan needs to further also
focus on the optimum utilization of existing resources, if the resources are more than required
number then how and where to utilize the excessive resources. While improving the process,
a very important step is tp determine the number of BA’s, CSRs and Managers required, and
how to allocate the clients to each CSR to increase efficiency and also increase the
satisfaction level of the clients.
While understanding all the gaps and issues in the process to bring improvements, there also
is a very important point to find an effective way to revert to the HA’s CEO, which also leads
to improving the health and welfare service delivery process of the BPO (Breyfogle, Cupello,
& Meadows, 2000).
Ethan explained the suggestion to create a new Case manager position between the CSRs and
the BA’s. A lot of the discussion happened on how to get new case managers, he also did
discussion with the BA’s on this point. This plan was created to develop a service delivery
solution which would increase the customer service level. He planned to train and develop
one of the CSR to be moved to the new case manager position, so as to facilitate career
development and optimize operational expenses. This step could develop a direct contact
with the service provider, as only few calls will get escalated, but will not eliminate the
problem area completely. The responsibilities are still not clearly defined to each CSR and
the CSR’s could still not take customer issues seriously and with the core responsibility to
resolve at the earliest (Team, 2004).
The new case manager should be hired from outside the organization, so that the existing
teams could accept him as their manager. Making an internal person the leader of both the
teams could create internal issues within the teams and could further hamper the performance
of the entire process. Also, the qualification of the CSRs and BA’s is not sufficient to make
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Running Head: Operations Management
them lead such a position. A person who has handled a team of 40 - 50 people and holds a
management degree should be hired externally. This new case manager could take some time
to settle in the organization and understand the processes, but will also bring innovation and
new ideas for improvements. His acceptance level will be on the higher side.
The High Touch Low Cost Approach simulation model suggested by Ethan can be a solution
in part, but needs to be further refined so as to achieve the desired objective of customer
satisfaction level and increased profitability.
Improve and recommendations:
1. Staff Training
Agreeing with Jerry’s opinion about Black Belt training in the March first week, which
addresses the define phase and the measure phase. The Sam Regan’s email read that the
benefits and services provided did not meet his expectations, hence a well trained staff
reduces the chances of getting unsatisfied customers.
The CSRs need a more complex training to enable them to resolve maximum cases at their
level. Employee performance is the criteria to select who should undergo the black belt
certification and who should undergo the training process, so as to eliminate all process
lapses and continuously improve the service levels to achieve customer satisfaction. The
selected employees need to be self-motivated to undergo the training process, and should
have completely understood the mission of their company, only then can they achieve
effective results post completion of training. Through the training process, they will be
required to do the regular day-to-day tasks as well as undergo the training and project as a
part of the training curriculum, extra efforts will be required for a few months, hence these
employees need to be kept motivated in some or the other ways by the human resource
department (Chakravorty, 2010).
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Running Head: Operations Management
2. Hire a Manager
Ethan gave a good idea about creating a new position for a new Case Manager between the
CSRs and BA’s. The Case Manager would be a connecting link between the CSRs and BA’s,
who would handle the issues that CSRs would not be able to clarify. Instead of this case
manager being an add-on to the existing headcount, this person can be the managing leader of
the CSRs and BA’s. He will be continuously monitoring the time taken to resolve each case
and would closely monitor the excess time taking cases. He will be the escalation point for
any issues or problems. The case related issues should also be escalated to this person. He
should work in a manner to resolve the issues and enable both the teams to work and perform
better.
3. Clearly define responsibilities and control manpower
Three extra CSRs appointed for HA can be utilized at some other place as their timings
overlap and also causes overlap of responsibilities. Multiple people handling the same client
at the same time are leaving the CSR assume that the work is done or will be done by the
other team member. There should be equal division of responsibilities with each CSR with
clear description of what needs to be done and how it needs to be done so that the
performance of each CSR can be measured accurately (Saxena, 2009).
The resources of CSR team are unevenly distributed. There needs to be a proper mechanism
to divide the clients with each CSR and number of CSR for each client. This will lead to
effective utilization of each resource and also will reduce the cost. However, the manpower
cut can lead to insecurity among the existing resources. To have that sorted, there can be new
benefit plans and incentive plans implemented, to keep the staff motivated as well as improve
their performance. Attractive incentive plans have a positive impact on the team performance.
4. Process improvement
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Running Head: Operations Management
The problem of keeping the customer on hold can be resolved completely. This is possible at
the CSR level through maintaining a proper communication via email to the customer about
the time they need to check and revert on the issue, then the CSR can forward the request to
BA’s and get the database update. This will keep the customer satisfied about the status that
the team has noted the issue and is working on it, also will prepare the customer about the
lead time they need to resolve the problem. This particular process by having no waiting time
and the customers will no longer be kept on hold for any reason. The CSR and BA’s will
have sufficient time to check their database and according revert to the customer query.
5. Process Automation
Automating the process would further simplify the reporting and performance metrics and
assessments to take better decisions. This process could take around a year to get completely
implemented, and then two to three months to check the effectiveness and build a control
mechanism on it. The automated system should be able to give proper performance reports to
be analysed from time to time and accordingly performance metrics can be defined. The
automated processes ease out much of the efforts and give effective and efficient results
(Erdem, 2007).
Control: - The process map developed by Jerry should be continually reviewed and updated
from time to time to reflect any modifications. All documents prepared while the
improvement process should be standardized and updated with versions.
Despite of such practices and improvements it is also beneficial to do rigorous follow-ups and
keep implementing corrective actions with simple documentation so as to increase the
sustainability of the improvements brought into the process (Bonacorsi, 2012).
A very critical factor in the control phase is to set up a plan to monitor the new process so as
to maintain the project outputs. This step clarifies the way that how the performance of new
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Running Head: Operations Management
process would be continuously monitored, who is the related person to be contacted in case of
issues or problems, how to do that and how to respond (Emmett, 2007).
Conclusion
Customer contact department of a BPO is not just ubiquitous, but also a high mode of
customer dissatisfaction. The performance of its CSR’s can lead to making or breaking the
service provider’s indexes of customer service levels and loyalty. Just by focusing on the key
factor of customer requirements or in simple words by what customer needs, and by building
the processes around those needs and collecting further quantitative measurements on the key
factors, the EBO group of the BPO Inc, can be an asset to the organization as a whole. At this
particular time, the other data factors of client queries, resource utilization, client being kept
on hold, etc. becomes critical.
The Customer Service Representatives need to be competent enough to be able to answer the
client queries at their level, in case of need of more details, they should be well trained on
how to handle such clients and keep them warm about the issue and data clarification. These
are certain important performance metrics to be taken care of as these are client-affecting
service level indicators, which can lead to the loss of a client.
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