PIMMS anyone?

How an intranet-based common measurement system – designed and built in-house – is driving operational efficiency at the Royal Bank of Scotland.

By Andy Job

The Royal Bank of Scotland (RBS) Group is the eighth largest bank in the world with a market capitalisation of £49bn. The three principal areas of its income generation are the UK, Europe, and the US. The bulk of both the group’s income and assets continues to be generated in Europe. Its mainstream, UK banking operation has a ‘back office’ processing strategy run through the Manufacturing division, which consists of ten separate business areas and around 28,000 manufacturing employees, who work in 92 specialist centres.

When operating at this scale, it is essential that an organisation can measure operational performance, manage its people and control workflow efficiently and effectively.

In the past, component business areas in manufacturing operated in isolation, making comparable performance difficult to ascertain and quantify. This also made it more difficult to calculate and track the impact of continuous-improvement activity, growth, process volumes and flows (particularly where the process crosses business areas) and identify business trends. Historically, this was achieved through a number of bespoke methods and systems that had developed organically in each business area. There was, therefore, an unrecognised demand to develop a common system and supporting business process, which had sufficient flexibility to provide good management information, common measures and a ‘single version of the truth’.

The PIMMS system
The principle objective of the project was to improve the efficiency and effectiveness of people and process management, through the provision of an enhanced productivity and performance-management reporting tool.

About five years ago, the ‘Productivity Improvement Measurement and Management System’ (PIMMS) was introduced in a basic form – using a Microsoft Access database on standalone PCs at seven sites. At that time it was being used by 1,400 staff and proved to be a major success, demonstrating that there were considerable benefits from using such a system. However, further expansion was restricted by its stand-alone nature.

Over the past 18 months, PIMMS has been developed using the Group’s intranet system as a delivery channel and is now available to around 14,000 staff in 80 separate locations. With further expansion planned to cover all relevant Manufacturing units, the total number of people using PIMMS could soon reach 18,000. It is also being considered for use in RBS Group’s UK branch network and other processing environments.

Based on the operational management principle that you can't manage effectively unless you measure what you are doing, PIMMS is designed as a capacity planning and operations-management system, which brings the following disciplines into one user- friendly package:

Employee rosters and absences;
Employee skills;
Employee efficiency;
Work volumes – received, completed and work-in-progress;
Consistent process-measurement times using ‘predetermined administrative-data system’ (PADS) professional standards;
Predictive volume forecasting.

The management information generated by PIMMS from these key components enables managers to make faster, more informed and accurate decisions on the deployment of people to meet work demands. The tool has therefore become a ‘one-stop shop’ for crucial management information. No external system could deliver all the required elements in a single Oracle database-application. For this reason, PIMMS was built from the bottom-up using internal resources. The other major benefit of this development approach is speed of reaction to changing needs or cost, and the ability to link to internal, automatic data-capture systems.

The system is a key driver for improvement activity. The manufacturing division benefits from the rich management information that PIMMS provides about the overall business. It uses common measurement and targeting, enabling RBS to identify and help drive continuous improvement to areas that have processing bottlenecks and waste. The speed of the collation of information is also improving business. With all source data in one place and a common suite of reports, executives can react quickly to the management information provided. One director said that PIMMS was like his car dashboard – he knew where his business was slow, where it was fast and where it needed attention.

Breaking it down: The components
RBS Group has to constantly evolve to meet the changing demands of the marketplace. To ensure that PIMMS has the ability to meet these needs, it has been designed on a modular basis to provide as much flexibility as possible. This also enables it to meet the different demands of the various business areas within the organisation.

The Staff module
The Manufacturing division includes numerous operating units with a broad range of opening hours, from 24 hours to a site that functions within normal office hours. To meet these different operating environments there are a large number of different rosters and working patterns that have to be recorded for staff. This module contains full details of each person’s working hours, holiday record, absence record and skills. It can cope with a wide variety of work patterns and rosters in an accurate and timely fashion. Previously, these records were maintained in spreadsheets of varying design and quality, which required a high level of maintenance.

The work measurement/management module
This module contains the work-volumes data, which is a record of daily work volumes received, completed and work-in-progress for each process that is measured.

The reporting module
This provides a suite of 52 online reports covering the operating unit’s performance, in terms of productivity, work-in-progress and volumes of work received and completed. It also includes staff information, such as rosters, absences, holidays and overtime completed. The module is designed to provide these reports to all levels of management within an operational unit, from team manager to unit manager. The idea is to provide a ‘single version of the truth’ to everyone.

The forecasting module
One of the major innovations introduced within PIMMS is the forecasting module. By using historical data, it forecasts workload demand for the next 13 months. For the immediate three months ahead, this monthly forecast is split into a daily forecast of work volumes and, therefore, the demand on the workforce. This daily forecast can be combined with staff data to assist in identifying any workforce shortages or surplus. It provides managers with the information they need to change staff rosters, arrange appropriate work transfers or recruit and train additional people.

A fundamental building block of any work-measurement system is that there is a consistent and credible ‘standard time’ for the activities undertaken within the operational unit. PIMMS contains a process-timing tool that provides a database for the construction of these standard process times – to international standards – using PADS methodology.

Many of the units within the manufacturing division have a significant telephony operation. PIMMS, therefore, contains a specialist telephony module to accommodate the particular resourcing demands faced by a telephony operation.

These modules are contained within an Oracle database and use Active Server pages with Visual Basic script and HTML.

A unique feature of PIMMS is the ability to combine the data contained within the various modules into one reporting suite. The reporting module provides online reports covering the key performance indicators (KPIs) used within the various operational units. The information is held in a standard format at team level and can be grouped into the hierarchy that applies to the operational unit. The main areas that the reports cover are:

Operational performance – productivity, efficiency and utilisation, which are considered as the KPIs for Manufacturing’s operational units;
Levels of work-in-progress and processing performance against service-level agreement standards;
Volume logs showing historical volumes of work received and completed;
Detailed breakdown of specific categories of work;
Staff rosters – on-screen representation of staff rosters including holidays and other planned absences (for example, training). Plus, a historic representation of unplanned absences (for example, sickness) and overtime worked;
Details of agency staff employed and hours worked;
A skills matrix of individual staff, which can be matched to activities to assist with identifying future skills gaps and, therefore, training needs;
Provision of demand forecasts for call centre and other units, identifying potential shortfall or surplus of staff to meet the anticipated call traffic;
Forecast workload demand on a daily basis for three months, and on a monthly basis for 13 months.

A standard query tool is used to create more detailed and bespoke reports from the common database, which enables better consistency of reporting across manufacturing’s centres.

Implementation strategy
Following 12 months of research and development, the implementation of the intranet-based system commenced in June 2004, with a two-month pilot. The pilot involved three centres, with a total of around 600 employees. The successful completion resulted in the system being aggressively rolled out to around 14,000 employees over the following 16 months. A further 10,000 members of staff are expected to start using the system in the first half of 2006.

The consequence of this rapid level of expansion was that the application quickly outgrew its original host servers. New development, production and web servers have been secured with the capability to hold data relating to 30,000 employees.

By adopting the modular approach described above, the team was able to phase the development and delivery of the various elements that make up PIMMS. Initially, we concentrated on the staff module, the work measurement/management module and the reporting suite. These took priority as they have the biggest impact on the business’ ability to manage day-to-day activities. The process measurement, predictive and telephony modules were developed separately.

A major part of the implementation was the degree of face-to-face training with end users. This went beyond the usual ‘here is a system and these are the buttons you press’ approach and incorporated ‘this is how you use it to support your day-to-day activities’. This was achieved by establishing an implementation team, drawn from the various business areas, which visited the sites. The team ensured that all users knew how to use the tool, interpret the reports and, more importantly, the action required to change and improve the results. This approach to training has improved the operational awareness of staff by embedding the business processes surrounding PIMMS into their working day. It has also driven a cultural change among managers of the operational units by providing them with good operational management information for their KPIs. This has enabled units to be more proactive in their management of resources, as well as helping to identify process hotspots earlier, thereby driving more focussed, continuous-improvement activity. When the team members returned to the business after completing the delivery of the training, they had become experts on PIMMS and continued to promote and reinforce use of the system. To date, the implementation team has trained around 4,000 managers and team leaders.

Project benefits
The culture of the organisation has been changed immeasureably since the introduction of PIMMS. The availability of more detailed management information has improved operational management at all levels. This has helped generate major efficiency savings, which have been re-invested in absorbing increased volumes of work, new products and other initiatives.

The delivery of the system has slashed the duplication of effort in creating and maintaining bespoke tools used in the various business areas, enabling easier and more consistent staff rostering across the business. The removal of the bespoke tools has saved a number of employees from unnecessary, non-value-added activity, which means that the time saved can be used for more useful customer-centric activities.

Within the productivity, work measurement and staff modules, the main benefits that have been identified have resulted from better use of the performance-management reports that are available, which are more accurate and objective than the reports used previously. This detailed performance information has also helped operations managers and process owners identify processing hotspots through analysis of work-in-progress and areas of under or over-performance.

The modules also help in the identification and quantification of non-core and non-value-added tasks.

The provision of a process-timing module helps us meet the group’s strategic objective of adopting a common approach to activity timing. Prior to the introduction of PIMMS, an external system was used to construct standard times and was accessible through stand-alone PCs. As a consequence, analysts had to gather process information from the operational units and then re-key the information into the stand-alone timing tool, in order to construct a standard time. They then had to return to the operational unit to discuss the output and get agreement to the process time. This was cumbersome and time consuming. As PIMMS is accessible through the intranet, the analysts only have to key-in their work once and can discuss the outcome with the operational units on site. This has enabled the analysts to reduce the amount of time taken to construct standard process times. In addition, the timing module enables the analysts to better identify and demonstrate waste within a process.

The provision of a good forecasting module has helped to improve the operational units’ planning process. The forecasts show any gaps in the resources available to meet the demand, outlining the requirement for recruitment, training or overtime. As the forecasts are provided for a period of 13 months in advance, all units receive sufficient notice of these gaps and the appropriate action can be taken. PIMMS has also enabled risks and opportunities to be identified much earlier in the planning process than before, as well as providing an understanding of the impact of marketing campaigns on operational units.

The module provides this information to all levels of management – from team leader to director – by rolling up the forecasts, which are conducted at process level.

Lessons learned.
We realised that it is necessary to gain buy-in from senior management to ensure that there is full engagement at all levels of the organisation. This makes implementation easier and ensures that there is enough focus, within the operational units, to implement the change and to be successful once use of PIMMS has become embedded in their working day.

We also learnt that it was wrong to assume that all managers have the same levels of operational-management knowledge and the skills to interpret the management information provided, correctly. Inappropriate targeting can drive the wrong management behaviours and lead to inaccurate reporting from which incorrect conclusions could be drawn.

PIMMS has replaced a plethora of systems and practices with a comprehensive, accessible tool. Its success is demonstrated by its expanding use across Manufacturing and the interest received from many other divisions in the RBS Group.

Through the visibility provided by PIMMS, the business is now starting to identify and focus on areas of indifferent performance and process structures. It is using this information to drive improved efficiency through more consistent targeting and, ultimately, to improve customer service.

Andy Job is manager, Strategy and Change Capacity Planning, Manufacturing Finance at the Royal Bank of Scotland Group. He can be contacted at: andy.job@RBS.co.uk.

<Box> Productivity Improvement Measurement and Management System (PIMMS)
A management and measurement tool designed and built in-house to report on and review operational performance, while assisting in day to day and strategic planning processes. The system is now being used by 14,000 users across the RBS group's manufacturing division, as a key tool for performance measurement, forecasting and managing workloads and driving continuous improvement.

<Box> PIMMS quick facts

Number of people (originally targeted) in organisation – circa 24,000;
Project team – five system developers and 15 implementation and support staff;
Planning time to implementation – 12 months;
External project partners – none;
Budgets - £20,000 for training of system developers;

On average, the PIMMS site receives 60,000 hits per day.