operational excellence services
DESCRIPTION
TRANSCRIPT
1Fidelity OES Confidential Information
Operational Excellence ServicesOperational Excellence Services
2006 – WCBF Conference2006 – WCBF Conference
Mike CookMike Cook
Tom AngeloneTom Angelone
OperationalOperationalExcellenceExcellenceServicesServices
2Fidelity OES Confidential Information
Overview
Fidelity Investments is one of the world’s largest providers of financial services.
Largest provider of retirement savings plans (401(k), 403(b)
Institutional Retirement
2nd largest discount
brokerage firm
Provides human resources and
benefits outsourcing services
Retail / Brokerage
About Fidelity InvestmentsFidelity Investments is headquartered in Boston, MA with 37,000 employees worldwide and is one of the world's largest providers of financial services, with custodied assets of more than $2.5 trillion, including managed assets of over $1.2 trillion as of February 28, 2006. Fidelity offers investment management, retirement planning, brokerage, and human resources and benefits outsourcing services to more than 21 million individuals and institutions as well as through 5,500 financial intermediary firms. The firm is the largest mutual fund company in the United States, the No. 1 provider of workplace retirement savings plans, one of the largest mutual fund supermarkets and a leading online brokerage firm.
3Fidelity OES Confidential Information
Operational Excellence Services is an internal consulting organization that resolves challenging global business problems with custom solutions.
Serves as partners for business transformation.
Provides a full line of consulting service offerings with the primary focus on improving operational and organizational effectiveness.
Delivers value by enabling fact based, data driven business solutions.
Provides an objective perspective, enabling aggressive improvement by breaking down institutional paradigms.
Enables richer solutions, organizational ownership, and transfer of knowledge to business partner teams.
Operational Excellence Services - OES
Data-drivenData-driven Team-basedTeam-based ResultsResults
Chartered in 2002, OES ….
4Fidelity OES Confidential Information
OES provides a full line of consulting service offerings with the primary focus on improving operational effectiveness and……
• Performance assessment
• Process analysis / benchmarking
• Process design & reengineering
• Benchmarking• Opportunity
identification• Prioritization• Business case
development• Benefits
realization plan
Service Offerings
OperatingModel DevOperatingModel Dev
Off-shoringOff-shoringQuality SystemsQuality Systems
OperationsImprovement
OperationsImprovement
PerformanceMgmt
PerformanceMgmt
• Business strategy alignment
• Operating strategy dev
• Operating model definition
• Operating model development
• Strategy alignment
• Business drivers
• Balance scorecard / metric definition
• Measurement framework development
• Demand flow• Capacity mgmt• Performance
standards• Operations
mgmt training• Short interval
management• Operations
performance coaching
• Quality assessment
• Quality strategy• Assurance -
defect prevention
• Control – statistical prediction
• Quality metrics• Education
• Organizational assessment
• Org design / alignment
• Skills assessment
• Core competency analysis
• Change management
• Outsourcing / shared service analysis
• Functional decomposition
• Opportunity identification
• Solution design• Business case
development• Migration prep
OrganizationDesign &Alignment
OrganizationDesign &Alignment
……delivering value by enabling fact based, data driven business solutions with an objective perspective.
OperationsConsulting OperationsConsulting
OES – Service Offerings
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Enabling Operational Excellence within Fidelity--- OES Service Offerings ---
OES – Vision
Value Chain Change – Driving transformational change in terms of the role and function a business unit plays within a broader value chain or company context.
Operating Model Change – Driving strategic change and significant performance improvements across an entire business unit encompassing multiple capabilities and processes.
End to End Process Change – Driving performance improvements around an end-to-end process contained within a business unit and possibly extending to suppliers and customers.
Departmental Change – Tactical change focused within a department or area.
Magnitude of Change / Risk
Val
ue
End to EndProcess
OperatingModel
Departmental
Value ChainBusinessTransformation
“OES provides measurable value to Fidelity and it’s customers in a partnering relationship by enabling fact based, data driven business solutions with an objective perspective.”
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Level ofSupport OES
BusinessUnit
FacilitatedOES Led BU Led
Progression over time to develop new capabilities & skills
An OES objective is to collaborate with and enable Business Units to develop new capabilities and skills over time through complete knowledge transfer.
OES – Collaboration and Engagement Model
OES and Business Unit CompleteBusiness Diagnostic and Determine
Highest Impact Projects
OES and Business Unit CompleteBusiness Diagnostic and Determine
Highest Impact Projects
OES and Business Unit Jointly Complete High Impact Delivery Projects
OES and Business Unit Jointly Complete High Impact Delivery Projects
Business Unit Begins to Own and LeadContinuous Improvement Efforts
Business Unit Begins to Own and LeadContinuous Improvement Efforts
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Small teams focused on well defined deliverables
Project team workouts
Information sharing
Issue Identification / Resolution
Direction setting
Small TeamsCross-Functional
Project Workouts
OES - How Work Gets Done
The Team-Based model results in relevant solutions, organizational ownership and institutionalized change.
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Why do Organizations Transform Themselves?
Strategic Opportunities and Threats
Evolving customer and business partner needs – increasing customer sophistication, focus on cost competitiveness
Opportunities to expand / grow business
Leveraging core competencies to develop new service offerings
Opportunities to take existing service offerings to new markets (e.g., internal to external)
Increasing regulatory requirements
Competitive threats from higher quality, lower cost providers
Off-shoring opportunities
Operational Challenges
Customer service issues – speed, responsiveness, flexibility and quality
Degrading cost effectiveness -- as compared to competitive service providers
Lack of focus on core processes
Functional silos – lack of end-to-end process integration
Process inefficiencies -- proliferation of redundant, non-value added activities
Misalignment of roles & responsibilities based on skill levels
Building a performance based / continuous improvement culture
World class organizations constantly challenge their business models to maintain competitive advantage and deliver additional value to their customers.
Operational Excellence and Business Transformation
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Process &OperationalExcellence
ProcessDefinition
Ownership& Organization
Alignment
Simplification &Standardization
Visibility &Transparency
Measurement &Control
ContinuousImprovement
Customer Focused Common Understanding of Processes & Relationships Reduced Reliance on Institutional Knowledge
Improved Process Accountability Streamlined Organization
Reduced Complexity Reduced Risk Improved Consistency
Aligned & Integrated Performance Metrics and Scorecards Visibility into Current Performance Focuses Improvement Efforts
End-to-End Process Visibility via Technology Integration
Proactive Process Mgmt Real-time Responsiveness
Process Optimization Improved Business Performance
Operational excellence is enabled through six key principles….
Keys to Operational Excellence and Business Transformation
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Business Transformation
6 to 10 weeks Timing Varies
Develop Implementation
Roadmap
DevelopOperating
Model
RefineVision &Strategy
ConductBusiness
Diagnostic
Where are we?
What are the key issues and opportunities from a customer, internal and external perspective?
Where are we going?
What is our vision & strategy for
addressing key imperatives?
What will our business look like?
How should we structure our business to achieve our vision
and deliver on our strategy?
How do we get there?
What is the most effective approach for
implementing the strategy and operating
model?
Initiate Quick Wins and Pilots (Value Acceleration)
Large, integrated, complex business process issues require a more holistic approach than simply applying D-M-A-I-C or Lean Methodologies.
Business Transformation Approach
Phase 2Strategy & Operating Model Development
Phase 1Assessment
Phase 3Implementation
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Key Outputs
• Scenario analysis• Strategic intent / vision –
mission, vision, principles, positioning, value prop
• Service offering definition & Go-to-market strategy
• Operating strategy – definition of service delivery model & core capabilities
• Business / financial model (as required)
• Refined Service Delivery Model
• Core process architecture (end-to-end)
• Organization architecture• Performance management
architecture• Technology architecture• Structural / location
analysis• Voice of the Customer
• Current state to future state transition strategy
• SOW definitions & estimates
• Prioritized initiatives rationalized against current initiatives
• Multi-generational roadmap
• Refined business case
Develop Implementation
Roadmap
DevelopOperating
Model
RefineVision &Strategy
ConductBusiness
Diagnostic
Initiate Quick Wins and Pilots (Value Acceleration)
Each phase of the approach builds on the previous phase to develop a cohesive and customer focused strategy and operating model.
Business Transformation Approach
• Current state documentation• Business driver analysis• Customer input / feedback• Internal ops assessment by
capability area – SWOT • External benchmarking (as
required)• Summary of key business
imperatives & opportunities• Initial business case
Phase 2Strategy & Operating Model Development
Phase 1Assessment
Business Transformation
Phase 3Implementation
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A Closer Look -- Business Diagnostic
The business diagnostic provides a thorough analysis of organizational strengths, weaknesses and opportunities from multiple perspectives.
Internal Capabilities
Competition
TechnologyTrends
Regulatory Changes
Industry Trends
Vision & Strategy
Operating Model
GrowthOpportunities
CompetitiveAdvantage
EffectiveOperations
Vo
ice
of
the
Cu
sto
mer
Customer / Business PartnerValue Delivery
BusinessDiagnostic
Business Diagnostic
Customer(s) Perspective Overall satisfaction Service levels Views on cost competitiveness Customer business direction Key requirements / needs – current vs. future Opportunities to provide additional value
added services
Internal Perspective - Capability Assessment Definition of core capabilities / competencies Capability assessment – strengths &
weaknesses around process, technology, organization structure, use of metrics, etc.
High level breakdown and analysis of end-to-end processes
Performance assessment
Other External Perspectives Competition Technology trends Regulatory changes / influences Industry trends (e.g., emerging products)
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A Closer Look -- Vision & Strategy Refinement
The strategy phase articulates the organization’s strategic intent, service offering strategy, and operating strategy based on the imperatives and findings identified in the diagnostic.
StrategicIntent / Vision
ServiceOffering &
Go-to-MarketStrategy
OperatingStrategy
Mission and vision Organization role within
larger company context and industry
Positioning Types of products and
services provided Value proposition Measures of success
Market / customer definition Services strategy –- short-term vs. long-term Customer segmentation strategy Growth strategy for existing vs. new services Pricing strategy
Operating principles Service delivery model Core competencies / core capabilities Sourcing strategy by capability / by service
offering (insource vs. outsource) Shared service approach
Business Diagnostic
Results
Vision and Strategy Refinement
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Core Capabilities Process Definition Capability Blueprints Best Practices
Value Analysis Alignment Limitations Best Practices
Technology
A Closer Look -- Operating Model
Process Organization
Performance Management
Culture and
Behavior
Strategyand
Structure
Process
OrganizationDesign
HumanCapital
Aligns
Enables Drives
Inspires
Drives Enables and Limits
Supports Facilitates
Inspires Inspires
Shapes
Technology
Operating Model
Framework Metric Definition Scorecard Control Plans Mgmt Process
Assessment Culture Alignment Skills Sizing
Operating Model
Provides a shared vision for the organization and serves as a critical
foundation for the transition and future improvements
The operating model provides the framework to ensure improvement efforts are aligned, integrated and balanced to enable optimal business performance.
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The Process blueprint defines the core end-to-end processes required to deliver an organization’s services.
A Closer Look – Process Blueprint
Indicates ‘how work gets done’ and ‘how services get delivered’ from an end to end perspective.
Represents the critical business documentation that clarifies what activities must be completed and by whom.
Is an essential training and communication tool that supports the transition and change management process.
Builds upon the operating strategy and service delivery model defined in strategy phase.
Description
Core Process Definition
Process ‘SIPOC’ Diagrams Process Objective Frequency/Timing Overall Process
Owner/Accountability Suppliers Inputs Steps Outputs/Outcomes Customers
Process Flowcharts Sequence and relative timing of
steps Who completes each step
Key Outputs
Process
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The Technology blueprint identifies gaps in current technology solutions and provide a roadmap for future technology needs and investment.
Identifies high level technical and functional requirements across capability areas and core processes.
Define overall technology architecture to support new service delivery model – infrastructure, data, applications, integration, etc.
Identify and define core applications required to meet key functional requirements.
Identifies gaps in current technology solutions.
Provides roadmap for future technology investment.
Description Key Outputs
Technology Needs Analysis Functional requirements Technical requirements Integration requirements
Technology Architecture Infrastructure Data Application Networking / integration
Application Definitions
Technology
A Closer Look – Technology Blueprint
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Defines how resources should be organized to accomplish organization goals and objectives.
Identifies required teams along with the charters and missions of each team.
Defines organizational reporting relationships and appropriate spans of control for key leadership positions.
Defines key position along with roles, responsibilities, and skill requirements of each position.
Provides approximate estimate as to how many resources should comprise the organization.
Description Key Outputs
Organization Charts Organization framework Leadership structure Spans of control Reporting responsibility
Team Charters Mission Objectives Value Key Positions
Position Descriptions Description Reporting relationship / grade Scope Roles & responsibilities Key competency requirements Measures of success
Rough Sizing Analysis
The Organizational blueprint defines the proposed team structure and required competencies to effectively deliver service.
Organization
A Closer Look – Organization Blueprint
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Provides a method for aligning and accelerating organizational activity towards the accomplishment of specific strategic imperatives & objectives.
Establishes a set of measurements that provides an organization with a comprehensive picture of organizational performance.
Enables cultural change to allow all levels of an organization to know what is important and how their contribution helps the organization meet its strategic objectives.
Is a key driver of continuous improvement.
Description Key Outputs
Measurement Framework Key business drivers Measures of Success Balanced scorecard framework
Scorecard Hierarchy
Balanced Scorecards Scorecard Definition Ownership Key Stakeholders Measure Identification
Metric Definitions Description Calculation Measurement Frequency Etc.
The Performance Management blueprint provides a framework for aligning organizational activity towards strategic imperatives and key success factors.
Performance Management
Measures are the “Vital Signs” of an organization.
What gets measured, gets done !!
A Closer Look -- Performance Management Blueprint
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Implementation road mapping can be segmented into four primary steps.
Capability Description
Risk Assessment
Key Worksteps
High Level Work
Estimate
Sourcing to Contract
Capability Description
Risk Assessment
Key Worksteps
High Level Work
Estimate
Req to Check Capability
High Level Description of the Work and Required Activities
Defines logical releases needed to progressively build the capability
Multi-generational Roadmap
Capability 5
Q4 Q1 Q3 Q12003 2004
Short Term Projects
Capability 1
Capability 2
Capability 3
Capability 4
Q2 Q3 Q4 Q1 Q2 Q4 Q2 Q4Q32005 2006
Program Management & Monitoring
Program Level Change Management & Monitoring
Req to Check, Etc.
Sourcing to Contract
Commodity Mgmt & Planning
Detailed Project, Architecture, and Change Planning
Process Analysis, Design & Pilot
Competency/ Organization/ Culture Development and Implementation
Work Segment FY04,Q4 FY05,Q1 FY05,Q2 FY05,Q3 FY05,Q4 FY06,Q1 FY06,Q2
1. Statements of Work – Capability Initiatives
2. Prioritization 3. Transformation Plan 4. Detailed Planning
Assessment of relative business value and implementation cost/risk for each capability release
Prioritize initiatives by relative value and cost
Identify top priorities
Cost/Complexity
Bu
sin
ess
Va
lue
Short Term Opportunities
Evaluate Later
Choose Selectively and
Pace Appropriately
Choose Selectively if
possible Quick Win
Commodity Management & Plng.
Detailed Work Plans Resource Estimates Cost Estimates Refinement of
Business Case
8FSM Confidential Information
FSM Implementation Planning
Objectives/Purpose: The overall objective of the Commodity Management and Planning initiative is to implement Commodity Business Planning, sourcing strategy development, and commodity governance activities that align with the delivery framework for the commodity. This includes the preparation of a sourcing, spend, and savings plan for the commodity that considers business unit requirements and planned purchases/projects/needs. Working with the Commodity Oversight Committee, the Commodity Leader leads this initiative and works to determine business unit purchasing plans and needs for the coming year, to aggregate purchases as appropriate, and to standardize requirements across business units as appropriate.
Owner: VP of Service Delivery
High Level Work Steps Develop Commodity Business Plan
template Develop category lifecycle cost
templates Develop commodity spend and usage
analysis templates Review and refine Commodity Business
Planning process blueprint Educate Commodity Leaders on the
Commodity Business Planning process and rationale
Initiate the Fidelity Supply Management Council
Implement commodity governance refinements in priority commodities (Professional Services, HR/Benefits)
Planning Considerations Lifecycle cost templates will vary by
commodity/category Initially, Supply Management Council
meetings may only be required quarterly
Release 1
Capability: Commodity Management and Planning
Release 2
High Level Work Steps Prepare spend and usage analyses for
priority commodities leveraging general office tools
Initiate Commodity Business Planning on priority commodities, leveraging templates developed in Release 1
Implement commodity governance refinements in ‘priority two’ commodities (Mar/Comm Services, Market Data, Technology, Communications)
Planning Considerations Integrate plans with Supply Market
Research and Analysis spend analytics pilot
Release 3
High Level Work Steps Utilize spend and usage analysis tools
(piloted by Supply Market Research and Analysis) to support the planning process in priority commodities
Roll out the Commodity Business Planning process to all commodities
Implement commodity governance refinements in remaining commodities (Travel Services, Real Estate, Admin. Services)
Leverage Commodity Oversight Committee governance structure to review and approve all Commodity Business Plans
Planning Considerations All commodity leaders should be in
place and driving the planning process
Overall implementation roadmap reflecting:
Priorities Dependencies Organizational
bandwidth
OperatingModel
A Closer Look -- Implementation Roadmap
Implementation
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Process &OperationalExcellence
ProcessDefinition
Ownership& Organization
Alignment
Simplification &Standardization
Visibility &Transparency
Measurement &Control
ContinuousImprovement
Customer Focused Common Understanding of Processes & Relationships Reduced Reliance on Institutional Knowledge
Improved Process Accountability Streamlined Organization
Reduced Complexity Reduced Risk Improved Consistency
Aligned & Integrated Performance Metrics and Scorecards Visibility into Current Performance Focuses Improvement Efforts
End-to-End Process Visibility via Technology Integration
Proactive Process Mgmt Real-time Responsiveness
Process Optimization Improved Business Performance
Remember operational excellence is enabled through six key principles…
Keys to Operational Excellence and Business Transformation
21Fidelity OES Confidential Information
Establish strong executive sponsorship and accountability.
Start with and maintain focus on the customer.
Think strategically and challenge the status quo.
Fully leverage the knowledge capital resident within your organization.
Ensure recommendations are supported by a robust business case.
Ensure model addresses human and organizational considerations.
Develop a pragmatic, rationalized and prioritized change agenda focused on value delivery.
Assign “benefit owners” to implement the transformation plan and drive accountability of results.
Key Success Factors
Successful transformation efforts are contingent upon several key success factors.
Business Transformation Success Factors
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Questions ?
Mike Cook – Vice President – OES
Tom Angelone – Lead Consultant – OES