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September 3, 2008
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The Robert E. Nolan Company is an operations and technology consulting firm specializing in the insurance industry. For 35 years, we have helped insurance companies redesign processes and apply technology to improve service, quality,
productivity, and costs.

Our staff members are all senior industry experts with 15+ years in the industry. Visit www.renolan.com to download our insurance industry studies, white papers, and client success stories.


Don't Ignore the Small Projects
By Jim Strebler
Senior Consultant
jim_strebler@renolan.com

I'm amazed by how many requests for small system fixes I find in companies. I'm talking about things like requests for repairs to make something work the way it is supposed to, and installations of processing capabilities that were meant to be included in Phase I of a major project but were postponed to Phase II… and Phase II was never completed. The reality is that these small-project requests seldom get appropriate attention.

The reason they don't get much attention or priority is simple: they are "nit" problems. Things like a system that incorrectly translates data or codes it and spews unusable documents. Or, a system that doesn't produce data in a format that's needed within the organization, necessitating a manual build of an Excel or Access table. In one client organization where the PCs had not been networked, workers printed out the faxes they wanted to send and then gave the paper versions to another department to fax. These types of problems are varied but have two things in common: they are small in scope, and workers have found ways to handle them ("workarounds").

Why should you care about these projects when there are so many big IT projects linked to corporate strategic initiatives? The answer is that when the small projects are added up, the cumulative costs of not doing them can be significant. What are the costs? To name a few, they are unnecessary work hours related to extra processing or accommodating workarounds; preventable processing errors that translate into rework and potentially dissatisfied or lost customers; the extra time it takes to deliver timely outputs; and, last but not least, workers' frustration at having to perform extra processing steps or to redo transactions.

Every company has these small projects. What's amazing is that they don't get fixed quickly. If the problems were with our own home, they would not wait long for repair—even if a major remodel of another part of the home was underway. We would not, for example, try to get by with a TV remote that didn't work, wouldn't go long without changing a broken light switch, and wouldn't wait months to have a water heater repaired. But at the office, the workarounds are somehow acceptable.

Considering all this, what does a company do about it? There are easy steps to take to see if this issue plagues your operations:

  1. Find out if you have a problem. Assign someone to compile a list of the small projects that have been requested. Review the log, then ask the workers to add any requests for projects that are not on the list.

  2. Evaluate the costs for each workaround by getting two pieces of information: the time that each transaction or occurrence of the problem adds (you might ask, "How long would it take if you didn't have to do that?") and the total number of transactions or occurrences of the problem. Next, calculate the cost by multiplying the transactions (per year) by the time per occurrence. Multiply that by the cost of a worker and you have your cost for that workaround processing. Be sure to include the cost of benefits in the worker costs (typically, 22-35 percent of the worker's salary per year).

After these two steps, you will see how much those workarounds are costing you. If the cost seems significant, it's time to look for fixes. Pick the workarounds that carry the highest cost and have IT do a quick estimate of what it will take to fix each. Compare the cost of your workers to the IT hours and decide if it's worth it. The higher the payback, the more priority should be given to eliminating that workaround. Continue until all significant problem areas have been evaluated.

By paying attention to these smaller projects and problem fixes, you can get multiple benefits in worker productivity, service levels, and customer satisfaction. It is well worth the time to decide which problems should be fixed and to get them done. You'll thank yourself for taking the time.