About This Blog
A QualitEvolution is intended to capture positions and experiences as a participant in the evolution of the Quality profession into the 21st century. From its origins as the brainchild of Corporate Industrial Statisticians, our profession has transformed and evolved to incorporate and adapt to the demands and expectations of our modern existence.
The scope of the subject matter within A QualitEvolution extends to the furthest ranges of quality, business transformation, management science, and quality issues especially pertinent to the members of ASQ in Canada.
Monday, April 29, 2013
Bank Offshoring Article.
I personally take the position that, as with any enterprise, a quality approach to planning and performance will support the success of any endeavor. The article below reveals several "red flags" associated with the assumptions and expectations of outsourcing, which would lead to disappointment and failure.
- Vague purposes for engaging in outsourcing, with non-specific expectations for cost savings ("Offshoring was going to save the banking industry millions. We just had to do it").
- Inadequate integrity of governance, status and tracking ("pretended everything was going to plan")
- Inadequate training and knowledge transfer ("Offshore staff was not as efficient and rework was common")
- Incompatible processes, tools, and approaches ("Offshoring was adding overhead to projects and processes")
The article below advocates the benefits of face to face interaction for product design and deployment, particularly if Agile design methodologies are used. One term that is increasingly used is "Near-shoring" where lower-cost resources within the same geographical proximity are used. This may be a more palatable approach to provide some of the cost and time advantages of offshoring, along with the closer connection of onshoring.
I will express that outsourcing includes controversial elements which can only be overcome with a deliberate quality management approach.
Time to Bring Bank Staff Back Onshore
APR 24, 2013 12:00pm ET
When I first started working in banking, the industry was at the peak of its obsession with offshoring. All I ever heard about for the first three years of my career was offshoring this and offshoring that. If I wasn't working with a team offshore, I was working with a team that was about to be.
Offshoring had become something of an El Dorado for the industry – the myth had become so tantalising that any semblance of realism was lost. And much like the hundreds of explorers who succumbed to the temptation of looking for the lost city of gold, banking executives bought into the hype. Offshoring was going to save the banking industry millions. We just had to do it. Every other industry was. It made perfect sense. How could the talent locally compete with India or China? These countries had more students graduating with MBAs every day than we had students – period. Banks invested millions in setting up offshore campuses all over Asia. There were assimilation programs, training courses and cross-pollination of resources. Special two-way video screens were even purchased – it was Skype before Skype.
Banks tried ever so hard to make it work. In some cases they even pretended everything was going according to plan. But firms were taking one step back for every two steps forward. From a set-up perspective, the regulatory and cultural challenges were underestimated. On paper, employees were cheaper, but more were required. Offshore staff was not as efficient and rework was common. Frustration at home was further exasperated by having to deal with poor communication lines. The media was quick to jump on any negative customer experiences.
Besides not delivering the benefits expected, offshoring was actually adding overhead to projects and processes. There were challenges with communication as teams worked at different hours around the world. Local and offshore teams were suspicious of each other – both felt as if the other was slacking off. It also necessitated an overreliance on email messages and lengthy documentation. Offshoring also made it practically impossible to adopt more innovative delivery models such as Agile that rely on face-to-face interaction. The final nail in the coffin was the genuine appreciation that teams developed better products collaborating in the same environment.
Finally, it dawned on the industry: El Dorado didn't exist. Now, after many years of searching and coming up empty-handed, offshoring has lost its appeal and banks are starting to bring the work back home.
So why does onshoring make so much sense in banking? With both China and India growing year on year, the cost savings are less appealing. Wage growth in these regions means that the difference in salaries, compared to local talent, has become increasingly marginal. Banks are also more focused on the cost reduction opportunities offered by an increase in digital channel usage and a decline in branch activity. Regional branch closures are expected to grow again this year. There is also an acceptance that delivering quality technology now, more than ever, relies on face-to-face interaction. Having a team full of people co-located and empowered means not only an improvement in product quality, but a significant increase in time-to-market.
Whereas offshoring was once considered a competitive advantage, it is now considered the opposite. More and more banks are looking to bring jobs back home, and even analysts and investors are starting to ask questions. The key to the transition is to do it smartly. No more inflated business cases. No more forced changes. By onshoring too rapidly you run the risk of making the same mistake most banks did with offshoring. Have clear objectives so you can easily decide what roles or departments are going to grow locally.
With wage costs on the rise offshore, talent available in abundance locally, and new delivery models required to create exciting new products, the world has moved on. The sad irony is that for banks that are willing to pack up and abort the mission, the real gold is waiting for them right at home.
Michael Nuciforo is a mobile and digital banking consultant and the founder of Keatan who previously worked at Australia and New Zealand Banking Group Ltd. on the ANZ goMoney application and more recently was head of mobile banking at Royal Bank of Scotland managing the U.K. retail portfolio. You can follow him on Twitter at @TheBoldWar.
Thursday, April 18, 2013
As a member of the Quality Management Division's Technical Committee for Finance and Governance, I reviewed several of these existing ASQ Bodies of Knowledge to derive those individual subject areas pertinent to the advancement of Finance and Governance, the results of which are shown below. I believe that if a similar approach is taken to synthesize elements from existing Bodies of Knowledge into the Service Quality framework (Customer Market Focus, Employee Focus, Communication, Service Delivery, etc.), the outcome will be more effective, more aligned with the format and style of existing ASQ Bodies of Knowledge, and more readily accepted. I am a member of the Service Quality Division, and willing to volunteer for this initiative if the leadership is inclined to avail themselves of my services.
|BOK Source||Body of Knowledge Area||Body of Knowledge Details|
|CQE||Cost of Quality (COQ)||Identify and apply COQ concepts, including cost categories, data collection methods and classification, and reporting and interpreting results. (Analyze)|
|CMQOE||Cost of quality (COQ)||Define and distinguish between prevention, appraisal, internal, and external failure cost categories and the impact that changes in one category will have on the others. (Evaluate)|
|CSSBB||Business processes and systems||Describe the relationship among various business processes (design, production, purchasing, accounting, sales, etc.) and the impact these relationships can have on business systems. (Understand)|
|CSSBB||Six sigma and Lean applications||Describe how these tools are applied to processes in all types of enterprises: manufacturing, service, transactional, product and process design, innovation, etc. (Understand)|
|MBB||Strategic plan development||Describe strategic planning tools and methods (hoshin kanri, SWOT, PEST, etc.) and their utilization in developing enterprise planning. (Apply)|
|MBB||Deployment of six sigma systems||Describe the following key deployment elements: Governance, Assessment, Resource planning, Resource development, Execution, Measure and improve the system. (Apply)|
|CMQOE||Stakeholder analysis||Identify and differentiate the needs of various stakeholders to ensure alignment with the organization's strategic objectives. (Analyze)|
|MBB||Stakeholder engagement||Describe to how to engage stakeholders. (Apply)|
|CMQOE||Internal capability analysis||Describe the effects an organization's internal capabilities (e.g., human resources, capacity, operational capabilities, etc.) can have on strategy formation. (Understand)|
|CMQOE||Legal and regulatory factors||Define and describe legal and regulatory factors that can influence strategy formation. (Understand)|
|CSSBB||Organizational roadblocks||Describe the impact an organization’s culture and inherent structure can have on the success of Six Sigma, and how deployment failure can result from the lack of resources, management support, etc.; identify and apply various techniques to overcome these barriers. (Apply)|
|CMQOE||SWOT analysis||Analyze an organization's strengths, weaknesses, opportunities, and threats, and develop and prioritize actions to take as a result. (Analyze)|
|CMQOE||Resource allocation and deployment||Evaluate current resources to ensure they are available and deployed in support of strategic initiatives. Identify and eliminate administrative barriers to new initiatives. Ensure that all stakeholders understand the plan and have the skills necessary to carry out their responsibilities. Identify advocates/cheerleaders for the plan and assign them initial activities and leadership roles. (Evaluate)|
|CMQOE||Organizational performance measurement||Design and use performance measures to drive and monitor organizational performance, and evaluate the results in relation to the plan. (Create)|
|CMQOE||Interdependence of functional areas||Describe the interdependence of an organization's departments or functional areas such as human resources (HR), engineering, sales, marketing, finance, research and development (R&D), purchasing, information technology (IT), logistics, production, service, etc. (Understand)|
|CMQOE||Risk management||Describe and use basic techniques for risk identification, control, and mitigation. (Apply)|
|CMQOE||Project management tools||Use benefit-cost analysis, potential return on investment (ROI), estimated return on assets (ROA), net present value (NPV), internal rate of return (IRR), portfolio analysis, risk assessment, etc., to analyze project risk, feasibility, and priority. (Analyze)|
|CMQOE||Measure and monitor project activity||Use tools such as cost variance analysis, milestones, actual vs. planned budgets, etc., to monitor project activity against project plan. (Evaluate)|
|CMQOE||Lean tools||Identify and apply lean tools and processes such as cycle-time reduction, 5 Ss, just-in-time (JIT), kanban, value streams, etc. (Understand)|
|CMQOE||Theory of constraints (TOC)||Define key concepts of TOC including local vs. system optimization, physical vs. policy constraints, throughput, etc., and classify various types of constraints such as finite resources, increased expectations, etc. (Understand)|
|CMQOE||Financial management||Read, interpret, and use various finance tools including income statements, balance sheets, product/service cost structures, etc. Manage budgets, calculate return on investments (ROI) or assets (ROA), and use the language of cost/profitability to communicate with senior management. (Analyze)|
|MBB||Project cash flow||Develop a project cash flow stream. Describe the relation of time to cash flow and difficulties in forecasting cash flow. (Analyze)|
|MBB||Sarbanes-Oxley (SOX) Act||Understand the requirements for financial controls dictated by SOX. (Understand)|
|MBB||Executive leadership roles||Describe the roles and responsibilities of executive leaders in the deployment of six sigma in terms of providing resources, managing change, communicating ideas, etc. (Analyze)|
|MBB||Governance methods and tools||Develop governance documents, tracking tools, and other methodologies that will support project success. (Create)|
|MBB||Performance measurement||Design a system for measuring project and portfolio performance. (Create)|
|MBB||Budgets and forecasts||Assess and explain budget implications, forecasting, measurement, monitoring, risk analysis, and prioritization for portfolio level projects. (Evaluate)|
|MBB||Costing concepts||Define the concepts of hard and soft dollars and use cost of poor quality tools, activity-based costing, and other methods to assess and prioritize portfolios. (Apply)|
|MBB||Project identification||Facilitate working sessions to identify new project opportunities that can be prioritized. (Apply)|
|MBB||Project qualification||Determine the elements of a well-defined project (i.e., business case), the process for approving these projects, and tools used in project definition (QFD, process maps, value stream maps, FMEA, CTx (critical to … customer, … design, … quality), etc. (Apply)|
|MBB||Financial measures||Define and use financial measures, including revenue growth, market share, margin, cost of quality (COQ), net present value (NPV), return on investment (ROI), cost-benefit analysis, activity-based cost analysis and breakeven time performance etc. (Analyze)|
|CSSBB||Financial measures||Define and use financial measures, including revenue growth, market share, margin, cost of quality (COQ), net present value (NPV), return on investment (ROI), cost-benefit analysis, etc. (Apply)|
|MBB||Business performance measures||Describe various business performance measures, including balanced scorecard, key performance indicators (KPIs), and the financial impact of customer loyalty; and describe how they used for project selection, deployment, and management. (Analyze)|
|CSSBB||Business performance measures||Define and describe various business performance measures, including balanced scorecard, key performance indicators (KPIs), the financial impact of customer loyalty, etc. (Understand)|
|MBB||Topics for Performance-based Section of Certified Master Black Belt (MBB) Essay Responses in Two Phases — 2 Hours (40% of Total Score)||Apply project selection criteria to select and prioritize potential six sigma projects using strategic planning tools, immediate- and long-term business goals, executive-level directives, risk analysis results, etc. Develop and deliver formal presentations that support the project selection process, identify progress, explain its status at conclusion, etc.|
|MBB||Topics for Performance-based Section of Certified Master Black Belt (MBB) Essay Responses in Two Phases — 2 Hours (40% of Total Score)||Develop and manage the scope, schedule, cost, and risk of six sigma projects using various project management tools to ensure proper monitoring, milestone achievement, and project success. Recognize when intervention steps must be taken to bring a project back on track or terminate it based on analysis of internal or external events.|
|CMQOE||Topics for the Constructed-Response (Essay) Portion of the Manager of Quality/Organizational Excellence Exam||Demonstrate management abilities in human resources, financial, risk, and knowledge management applications. Use effective communication methods in various situations to support continuous improvement efforts. Select and use appropriate tools and methodologies to plan, implement, and evaluate projects. Develop, deploy, and evaluate quality plans that can be used throughout the organization. Evaluate and recommend appropriate quality models or systems to implement in various situations.|
Wednesday, April 10, 2013
I wore the fedora to distinguish myself from so many others among the thousands attending the World Conference. It was part of my look at the booth, when delivering presentations, visiting receptions and hospitality suites, and enjoying myself at the gala. It worked, as I would not have noticed myself in the picture except for my distinctive hat.
When speaking to a crowd, wearing a hat can go beyond aesthetic benefits to serve practical purposes. In the heat of the conference rooms when addressing significant numbers (approximately 90-100 people attended my presentations), it is important to not let others see you sweat. I have compared WCQI presentations to a job interview conducted by a panel of 50+ quality practitioners, who come armed with pointed questions and do not let a detail pass without scrutiny.
As an incentive to attend (and remain until presentations were complete), I offered an ASQ Press book that I co-authored. Having a hat created an immediate container to collect business cards from which to draw a lucky recipient. This was particularly useful for the ISE presentation, where the ASQ Software Division had additional books and prizes to present to attendees.
If you are attending, I recommend that you have an affectation to ensure that others can find you. Conferences are fun and meeting many people within a short time is a great experience.
To those who may have objected or critiqued my choice of attire, this inclusion on the ASQ website validates that a dapper and debonair hat gets noticed and draws attention.
Wednesday, April 3, 2013
This site describes a program that was initiated by the Federal Government to support Organizational Excellence within Canadian organizations.
Admirable as this may be, it is somewhat irrelevant for a global organization. A "day-in-the-life" from my Canadian location can start with a conference call from colleagues in Europe, addressing concerns of my current client based in the southern United States, which will require me to follow up with resources from our delivery centers in Asia.
Nationalism in Canada is also a potentially controversial subject, because within the sovereign state of Canada there exists a "distinct society" of francophones known as Quebecois, and the movement to partition Canada to permit the establishment of a Quebec nation is significant enough that the provincial leader represents the separatist "Parti Quebecois" political organization.
Canada is not unique, as there are several examples of nations which have segmented into smaller states to represent the nations of their population. The former Yugoslavia has since been partitioned into multiple nations including Serbia, Croatia, Bosnia, and Slovenia. Czechoslovakia went through its "Velvet Divorce" to permit the nations of Slovakia and the Czech Republic to emerge. The risk is that in establishing a national program, breakaway territories will end up having to initiate their own programs.
The "nationalism" of Quality Awards and Programs can be misinterpreted to the point where it loses the spirit of its original intentions and becomes a vehicle for nationalist exhortations. This risk is best addressed with Deming's tenth point shown below.
Rather than get caught up in the complexities of national interests and sovereign states, I advocate that organizations adopt and follow a generic standard that was developed for international use. The ISO 9004:2009 is readily available and contains many of the same principles and practices which are advocated within national programs, without the pomp and public relations ceremony of those endeavors. The ISO 9004 supports and augments an existing ISO 9001 management system, and the international recognition of ISO, along with the stringent standards of registrars, will convey international acceptance.