Is "Straight Through Processing" the Ultimate Goal?

This week, we (led by Tom Deuschle and the CRM team) debuted the new Client Status Dashboard. This is a completely different kind of dashboard to almost everything else that we do or use. As I emphasize a lot, we are all about our data. We talk about SLAs, SLTs, KPIs, metrics and analytics…all of which are really important – don’t get me wrong. There is a big gap, though. Almost all of our Service Level Targets are not pegged at 100% in terms of throughput, velocity, and quality. There are good reasons for that. Very few Clients or Services either need or are willing to pay for Services that deliver perfection. So when we have a Service that carries a target attainment of, say, 95% or 99% or even 99.9%, there remains some number of events or transactions that isn’t delivered within the committed parameters. So, what happened to the other 5% or 1% or 0.1%? That is the real question. When I was leading a commercial service provider organization, every once in a while I would encounter a customer who was pretty sophisticated and would press for SLAs that covered the full 100.0% in some fashion; meaning, we would discuss and agree on Service Level Targets that said something like 98% fixed in this timeframe, 99.5% resolved within this timeframe and the last 0.5% resolved within this last timeframe. These were rare customers, but they reflected a conundrum in the service delivery world: what happens to the X% of stuff that does not go as planned? The volume of work that goes through our organization as planned can be referred to as "percent of Straight Through Processed" (STP) work. As we built our services here, we were realistic about of how often a given service could go through as STP. "Studies have been done that say that it takes almost 28 successful service events to overcome the impact of a single event that didn’t go as planned." Think about it like this: The work that flows through as STP is work for which we get no real credit. It is the base expectation. It is like your electric utility or your phone service provider, or even getting a burger at McDonalds. You expect your electricity to always be on, your calls to go through and to pick up your McDonalds order accurately and within three minutes every single time. Note that not one of these providers actually commits to you that they are perfect. It is only when this doesn’t happen that you begin to form an impression of your provider. In fact, studies done by the Service Management Institute and others indicate that something like 97% of the impression you have of your service provider are formed in the occasional situations when things don’t go as planned. So how do you respond when something goes wrong? Or even: how do you respond when something goes horribly wrong? I’ll use a baseball analogy. We, as an organization, are up to bat, say 100,000 times a day. Most of the time (read: 95%, 99% or 99.99%), we hit the ball as expected and get on base. Some percent of the time we hit a foul tip. And every once in a while we swing and hit the ball just right (or wrong) and the ball goes over the net protecting the stands and hits some unsuspecting fan smack in the face. The question is when, not if, this will happen. The unfortunate, but all too predictable, reality of this is that it is in that moment that impressions are formed. We go largely unnoticed as we hit 99,900 balls on base. Then there are the 98 balls that hit the net. We built that net knowing that sometimes the pitch and our swing wouldn’t line up quite right. The net is there to catch the stuff that we could possibly envision that might happen that would be somewhat unusual. We have escalation processes and cellphones and other SLT breach notifications to tell us when something didn’t go quite right and we have a net in place to manually take over when that happens. What remains really dictates how we are perceived. How we react to those rare instances is when our clients largely build their perceptions of us. It is our brand equity. "Something like 97% of the impression you have of your service provider are formed in the occasional situations when things don’t go as planned." This is a profound principle. Our brand is built not on the preponderance of work we do that goes as planned. It is built on the rare instances when something goes wrong. Studies have been done that say it takes almost 28 successful service events to overcome the impact of a single event that didn’t go as planned. Think about your own experience with your phone company or cable provider. Do you thank them for the 600 days of reliable service? What forms your opinion? It is how they reacted when, on the 601st day, something went wrong. Were they empathetic? Did they understand how big the impact was to you? Did they respond with urgency? Did they truly fix the problem? Did they close the loop when it was all over? Coming back to my opening statement, subjective assessment of satisfaction is what it’s all about when it comes to building a reputation. The worst possible thing for us to have is a big detailed metric scorecard indicating that we are green across the board and to have a client that is red-hot. In that moment, we need to rely solely on what we are hearing from our client. At that moment, they don’t care how many successful events have occurred. They only care about this one event that didn’t. That is our opportunity to shine. All of our queries and performance metrics become irrelevant. How we handle that client at that moment is everything. So we now have a dashboard that is entirely subjective. It is the synthesis of our CRM teams’ collective assessment of how we are handling those service events that fell outside the lines. There isn’t much green there and that is concerning, but the fact that we are paying attention to it and doing something about it is everything. The moment one of our clients feels the sting of being smacked in the face is our opportunity to delight them with great responsiveness and attentiveness. The kind they will remember, and share. [inlinead] NOTE: Lee heads Ascension Health's Ministry Service Center, which is in the third year of a six-year implementation for all healthcare entities in Ascension, the largest not-for-profit health system in the United States. By the end of calendar year 2014, the Ministry Service Center will support 150,000 associates as clients across the US. MSC is also in the early stages of supporting other key initiatives within Ascension, such as the creation of a unified travel services division and physician back-office services. The Ministry Service Center was the winner across two categories in SSON's 2014 Shared Services Excellence Awards: once for "Culture Creation", and a second time for "Improvement and Innovation." About Lee Coulter: Lee Coulter has had an impressive career, and is broadly considered one of the leading Shared Services practitioners in North America today. Now in his 8th industry, Lee was previously Senior Vice President of Global Shared Services at Kraft Foods and a leader of Kraft’s corporate wide "Organize for Growth" transformation initiative. In this role he implemented shared services in nine global functions, delivering support across more than 70 countries and completing major outsourcing transformation "mega-deals" in IT, HR, and facilities management. He created and led the Shared Services Center of Excellence and the Outsourcing Center of Excellence at Kraft. While there, he also received Chairman Roger Deromedi¹s CEO Award for his efforts. Prior to joining Kraft, Lee served as Vice President of Infrastructure Services at AON Corporation, where he implemented ITIL and shared services, reduced costs by more than 35%, and integrated legacy infrastructure from a long acquisition strategy, finally outsourcing IT to CSC. Lee spent 15 years with GE in a multitude of roles culminating in VP of GE’s outsourcing business. He also spearheaded the Company’s global Y2K initiative and served as a technical and operating executive in its Healthcare Services business, including as an expatriate in China. He received the President¹s Award from GE CEO Jeff Immelt. Lee holds a BS in Electronics Engineering from DeVry University and has completed all course work for a BS in Electrical Engineering and a Masters Degree in Biomedical Engineering at California State University at Long Beach. When not leading MSC, Lee can be found in his workshop, making sculptures out of wood and stone. He will be writing a weekly column for SSON's website in which he will share (nearly) everything that comes across his desk these days. More from Lee next week...

Is "Straight Through Processing" the Ultimate Goal?

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