Category Archives: government consulting

The RPA Myth


As I watch client after client move toward the promise of Robotic Process Automation (RPA) as a solution to their problems, I am amazed at their disregard for the small print.

For over a hundred years, organizations have been automating processes. Shortly after the first process was automated, it was noted that automation does not improve a process, it simply gives you more consistent errors in less time.  Although this realization seems obvious when you sit back and think about it, many organizations believe that launching into automation without process optimization will solve their problems.

Beyond common sense, a quick web search will  reveal article after article that support process improvement before automation.  From the Harvard Business Review to one of the leading RPA companies, industry thought leaders are documenting issues related to implementation before improvement.

So, how do we change the current dynamic?

  1. Get Serious about Systems Thinking: Both IT experts and process experts claim to be advocates of Systems Thinking, yet both fall into one dimensional thinking as soon as projects start.  RPA is a blending of process and technology.  It is time to truly leverage systems thinking in design, deployment, and operation of technology.
  2. Integrate Existing Capabilities: Integrate Agency Performance Improvement Officer (PIO), Continuous Process Improvement (CPI), and Software Development capabilities into a process automation center of excellence that manages integrated process automation and management work cells.  In doing so, ensure an agile approach is developed that borrows relevant methods from Lean to ensure alignment with value and detection of waste and with Six Sigma to ensure processes are properly measured, controlled, and continuously improved.
  3. Get Leadership to Accept Transparency: Agency leadership must embrace transparency, understanding that everyone is going to show both good and bad numbers.  Leadership must accept that numbers showing poor performance are not an indictment; they are an opportunity to improve.  Numbers that are always in the green mean they are probably not pushing the envelope hard enough.  At the macro level, an enterprise can be connected at the key stroke level creating an opportunity for performance measurement like never before, but that will not happen if Leadership is afraid of the numbers.
  4. Get Real about Risk Management: With great power comes great responsibility.  RPA presents an opportunity for incredible breakthroughs in operational performance and the opportunity to allow humans to focus on innovation and other value adding activities.  The risk is that the robots make errors, very fast, causing serious problems.  Agencies must implement industrial grade risk analysis and management to overcome leadership concerns and to mitigate the risks of serious failure in deployed bots. 

Possibly unlike any technology trend that has come before, RPA presents a critical need for process improvement prior to automation.  As eluded to above, there are numerous risks inherit to having intelligent software conduct transactions in place of humans. Consider that most tasks completed by humans generate some degree of defects, but they generate them at a pace humans can detect and remediate. With RPA, these mistakes will be generated and a pace imperceptible by humans.  Imagine if these mistakes are things like amounts on invoices or late fee calculations.  Massive numbers of these mistakes will accumulate without detection  costing organizations millions in losses and litigation.  Alternatively, RPA projects could and should use proven process engineering methods such as Lean and/or Six Sigma to first improve processes into an effective model the generates desired outcomes with quantifiable external and internal performance metrics.  An improved process defined in this way will ensure alignment with organizational value streams and allow instrumentation and reporting of procedural performance.  Ideally, proven process monitoring techniques and tools will be used to automatically analyze the massive amount of data generated and hence identify either negative trends or defects before they are out of control.

For those familiar with the use of tools such as Lean and Six Sigma in conjunction with process automation, you know that this approach is not only effective, it is actually easy and usually leads to a reduce project time line from idea to full deployment.  Sure, one can get to an initial deployment by avoiding process improvement and diving straight into automating processes as they are defined by stakeholders, but the cost is multiple iterations of poor performing releases extending the achievement of a stable and fully deployed solution.

So, if you are looking at Robotic Process Automation as a solution, or your RPA efforts are not achieving the results that you expected or were promised, ask yourself if you have an integrated solution and if the problem is the processes or your program. Remember, there is never a silver bullet and that stovepiped approaches rarely work.

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Filed under Block Chain, Business, consulting, efficiency, government consulting, Health Care, Lean, Lean Six Sigma, Management, process improvement, Robotic Process Automation (RPA)

A Holistic Approach to Reducing Fraud, Waste, and Abuse


Overview

Under the current administration, there is a renewed emphasis on reducing fraud, waste, and abuse (FWA) within the Federal Government.  While this is nothing new, historical initiatives have focused primarily on external threats and only moderately succeeded at reducing operational waste and have made little to no impact in identifying the fraud and abuse prevalent in certain areas of Government.  Historical approaches are top heavy, punitive, and rely on self or third party reporting with only negative consequences for those involved.

Figure 1Decades of experience show that fraud, waste, and abuse can be attributed to three sources: the external threat; the internal threat; and internal/external collaboration.  First, the external threat has received a lot of attention.  In this case, new laws, policies and systems (Figure 2) have been enacted to proactively identify and reduce fraud perpetrated by outside actors.  The second type of threat is the collaborative threat.  In this case, the threat is an external force working with unethical or willingly naïve officials within the Government.  This type of offense is often the most highly publicized aspect of FWA.  The third type of FWA is the internal threat.  In this case, internal Government personnel manipulate resources and abuse the system for unintended purposes.

As mentioned above, a number of important laws and policies have been implemented since 2002 with growing success in reducing the external threat.

Figure 2As we move forward in reducing FWA one must understand that the methods used for external threats do not apply universally to collaborative and internal threats.  The introduction of an insider as part of the equation creates a very different risk profile for the agency.  There are political and cultural implications when exposing an insider threat that do not exist with purely external threats.

To understand FWA and its threat to the Government and Taxpayers, we must come to terms with a common definition.  This is not as simple as it may seem and even with a definition, it is hard to determine what falls where without more clarification.  For the case of this paper, we will use the definition currently being used by the Department of Veterans Affairs (Figure 3).

Figure 3
With a working definition of FWA and an understanding of the FWA Triple Threat (Figure 1), we can now begin to address the issue that appears to be hiding in plain sight, the Internal Threat.   The internal threat comes in many forms, some examples are:

  • Low-Price Technically Acceptable (LPTA) acquisitions for non-commodities.
  • The various forms of acquisition fraud
  • Duplicative programs and functions within or across agencies refusing to consolidate due to the “Uniqueness” of their program or mission on even the most basic of functions (i.e. badging, billing, human resources, acquisitions)
  • Promotions and bonuses in offices/agencies with declining performance and rising inefficiency
  • Artificial barriers to improvement (e.g., Union Agreements)

A New Approach

While current Government initiatives are focused on identifying fraud from external threats and the IG is investigating issues as they are identified, Management Science & Innovation (MSI) has devised a new approach to addressing fraud, waste, and abuse.  Rather than relying on intra-agency inspection and whistle-blowers to identify the effects of internal threats, we propose using a data driven and statistically sound analysis to reduce fraud, waste, and abuse within our organizations in the same way that we are beginning to defend ourselves from external threats.

The MSI approach requires organizations to proactively identify fraud, waste, and abuse and report it along with remediation strategies in a non-punitive manner.  Each organization is given six months to conduct an internal analysis on FWA using an approach that starts with operational outcomes as the handle for pulling threads that can lead to FWA issues.  This analysis is conducted by a third party, ideally from another agency or with contractor resources that are willing to accept OCI restrictions on future work, using proven risk detection, modeling, and analysis tools.

As part of the self-reporting phase, reporting organizations are immune from punitive action, unless egregious or clearly illegal behavior is detected, so long as they propose sound remediation strategies and where possible demonstrate action already taken. Reporting organizations are also given the opportunity to propose expected operational efficiency and effectiveness gains as well as a rewards and punishments system for staff.  From this foundation, the organization is tasked with two things: 1) executing remediation strategies and conducting any internal rewards/punishments and 2) implementing a system for detection and reporting of FWA that will integrate with the agency and Government programs for the elimination of FWA.  Organizations are also informed at the beginning of the process that should they report no findings in the initial six month study, there will be a complete FWA review of their program by the inspector general.

This new approach addresses the concern of FWA from a more positive perspective that emphasizes and prioritizes operational outcomes and works with organizations to understand the impact of removing FWA within their organization.  Additionally, it reemphasizes the importance of reducing the impact of waste by helping employees truly understand what waste is (Figure 4) and how it impacts Stakeholders.  In the case of the Department of Veterans Affairs we can redirect the conversation to the impact on the Veteran for example (Hypothetical):

  1. $100,000 in unnecessary overtime is equal to 10 Veterans receiving Dialysis Figure 4Treatments.
  2. $500,000 in improper billing is equal to housing as many as 50 homeless Veterans for a year.
  3. $1,000,000 in unnecessary acquisition costs is equal to as many as 10 additional Veterans receiving prosthetic limbs.

By refocusing the conversation on the stakeholders and applying a less punitive approach to detecting and preventing FWA, It gives motivated staff (the non-offenders) the opportunity to act in a positive manner and it gives the offenders an opportunity to change their ways and become part of the solution.  Ultimately, this new approach should transform the culture from one in which FWA is ignored and sometimes even tolerated to the point of being condoned to one where even the hint of FWA is adjudicated swiftly.

While there are a great number of organizations and leaders who will  stand up and praise there efforts to eliminate FWA.  These efforts are focused on the external threat unless an internal or collaborative threat has been exposed to them and the world by an outside source.  Unless a serious effort is taken to address the Internal threat and begin to undergo the serious transformational change effort that our government is crying out for,  we will never begin to scratch the surface on eliminating fraud, waste and abuse within our government.

 

For more information contact:

info@msipros.com

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Filed under Business, common sense, consulting, efficiency, Fraud, Waste, and Abuse, government consulting, Health Care, Lean, Lean Six Sigma, Management