Perspective on Value Creation

Accurate Transference Modeling for Global Organizations

A key component used by CVS Solutions to creating value is understanding how to quantify the short and long term transference effects between solution management planning and global systems efficiency. With the advent of globalization our research and empirical studies suggest customers often do not see the expected benefits from efficiency solutions based on initial expectations over the long term at a macro level. Usually this is because they find unexpected repercussions based on changes in one system that have a negative effect on other systems within the larger series of global processes which at first would be not be considered related. A simple example of this might be improvements of technology related to claim's processing in North America but that creates an overload on the outsourced calling centers in Bangladesh. Or additional flight paths increased by an airline from one part of the world to another without quantifying the effects on immigration or taxi queues. If it is planned for accordingly, a suitable solution could be changing or making more efficient the queue models being used by the effected processes. But the more common effect is usually the 'knee jerk' reaction (such as scrambling to hire more employees) which can create additional cost inefficiencies and affect profit maximization models. By moving contention unexpectedly it is easy to create a zero sum improvement that dilutes expected return and compromises value creation in terms of the larger organization or customer experience. We tend to see operational efficiency processes being implemented in focused areas but without enterprise governance that measures long term effects across a series of global process chains. The use of strenuous sensitivity analysis needs to be elevated to an enterprise perspective in order to get a clear understanding of the potential value being created by queue improvements. If improvements are implemented that cause other contention points those needed to be measured appropriately and the value realization adjusted as part of the larger objective.

Closed Loop Analysis

Another key area for value creation is having a closed loop business centric analysis process that accurately measures gains in value creation over time. Managers are often coming up with new ideas that are designed in theory to enhance the customer experience or streamline queue processes, but as most managers know many good ideas don't always work in practice or create unanticipated results that compromise the intended value. For example perhaps an airline puts a process in place that lets a caller press a digit if they are first class and be moved to the front of the wait time for phone processing. This seems reasonable since the first class customer has paid more for their ticket, but is this really creating value? Most frequent travels and/or business travelers do not fly first class. There is a possibility we are agitating our most routine customers (who spend the most money on a regular basis) by making them wait longer while rewarding a first class customer who only flies once a year. It is doubtful a priority phone queue process encourages routine travelers to spend extra for first class, so it would be interesting to know if not having a priority phone queuing process for first class passengers would encourage them not to fly first class. If both of these are accurate customer behaviors then the process isn't creating measurable value and could be hurting value over the life of a customer if our routine travelers decide not to wait and can easily switch to a different airline. These types of cause and effect measurements often are not tracked long term for a complete understanding of how value is being assessed and decisions being quantified.