Presentation on the KBC SSO lean transformation set-up and first results. Includes mapping to ITIL.

1. Lean as a driver for change and cost
reduction at KBC ICT
Jan Mennens

2. Agenda
• Company intro
• Using Lean as a tool for a large scale transformational
change
– How did the programme get started?
– What are the key lean tools used, how are they deployed?
• Combining top down and bottom up approach to ensure
sustainability
• How does this affect ICT process, is ITIL, PMBOK, CMM,
… obsolete then?
• Tracking the results of the programme
• First results and lessons learned
• Wrap-up

3. COMPANY INTRO

4. KBC
• KBC at a glance
KBC Group has a successful track record in bancassurance in its
domestic market of Belgium and has been expanding to Central &
Eastern Europe over the last 10 years
• Key data on KBC Group
– Total market cap (mid-Nov 2011): 5bn EUR
– Total assets: 305bn EUR at the end of 9M11
– Total equity: 17bn EUR
– Tier-1 ratio: 13.6% (11.7% core)
• Key data on KBC Bank
– Total assets: 262bn EUR at the end of 9M11
– Total equity: 14bn EUR
– Tier-1 ratio: 12.5% (10.4% core)

5. KBC’s core markets

6. Company size
• Customers (estimate) 12 million
• Number of staff (in FTEs)
Belgium 17 537
Central and Eastern Europe 30 760
Rest of the world 2 197
Total 50 494
• Bank branches
– Belgium 845
– Central and Eastern Europe 1 181
• Insurance network
– Belgium 506 tied agencies
– Central and Eastern Europe sales via various distribution
channels

7. 8000 people
Shared Services and Operations

8. Using Lean as a tool for a large scale transformational change
HOW DID THE PROGRAMME GET
STARTED?

9. First a clear purpose
needs to be defined
• The Lean programme wants to change the
behaviour of people and the culture of the
company, to a lean way of working, by
coaching them and introducing a set of
supporting tools and techniques in order to
increase efficiency
and lower cost Transfor
mational
change

10. With lean we want to increase flow
and add value to the customer
• Customer involvement in
process improvement is
fundamental
• Introduce KPI’s to measure the
improvement and go to a
performance driven
organisation
• People get responsibility to
improve time and again
– Empowerment of people

11. A lean transformation team
should be built
• Get knowledge from external consultant: Celerant
• Gather (to be) Lean coaches from the entities
involved
– Mix of senior and junior profiles, internal and newly hired
– Assessment to get a clear view on baseline of capability
and avoid wrong choices from both sides
• Start building the team
– Fundamental investment
– Seed for later success!

12. Roles have to be defined to spread
the knowledge in the organisation
sponsor
methodologist
navigator
consultant
practitioner
promotor
“lean coaches”

13. Our goal is sustainable
transformation

14. Consultancy support
reduces in every wave
Wave 1 2 3
Role “I do” “We do” “You do”
Celerant Lead Co-Lead Support
Coaches Learn Co-Lead Lead
Entity Engage Manage Own
PMO Build Support Anchor
Support: Celerant KBC
Approach:
• Emphasis on learning-by-doing through practical experience and co-creation of solutions
• Coaches assume greater accountability as they gain confidence and experience
• Celerant support reduces as business become more capable and assumes greater ownership

15. A lean competence center
supports the transformation
• Provide support to drive Lean transformation
– Documentation (project approach, lean tools, …)
– Training
– Communication
– Reporting
• Grow Lean know-how and provide one
lean communication platform
• Share best practices and experience
among countries and entities
– Lean coach forums
– Lean Wiki
– Community calls
• Give support in leadership coaching
– How to deal with new “lean leaders”

16. Using Lean as a tool for a large scale transformational change
WHAT ARE THE KEY LEAN TOOLS
USED, HOW ARE THEY DEPLOYED?

17. A lean pyramid contains building
blocks to build to a lean culture
Lean
culture
Continuous Learning
Lean
improve- organiza-
leadership
ment tion
Collabora- Organiza- Work
Coaching & Results
tion & tional standardi-
facilitation focus
teamwork flexibility zation
Work flow Problem
Integrated Fact-based Visual
Lean Empowered and layout Root cause solving
reporting decision manage-
KPIs ownership optimiza- analysis sessions
system making ment
tion (Kaizen)
Clear roles Open Waste
Pro-active Value Workplace
Lean vision & account- communi- Effective Voice of Voice of quantifi-
manage- stream organiza-
& strategy abilities cation & meetings Customer Business cation &
ment mapping tion
(RACI) feedback elimination

18. Basic lean tools are provided to
support these building blocks
But some tools
are more
important than
others

19. Using lean to drive efficiency: key areas to focus on
APPROACH

20. The KBC lean approach…
…is a holistic approach
Steps to Process
add value
People Behaviour Results
Capability &
Accountability
Customer centricity Operational
Results focus Financial
P Accountability Cultural
Teamwork
A
C
D
System
Measurement
& Improvement

21. Combining top down and bottom up approach to ensure sustainability
START ON THE FLOOR AND WITH
MANAGEMENT AT THE SAME TIME

22. A three phase implementation
approach proves to give good results
Create Build
Awareness
understanding capability

23. Implementation example
What do we
Senior want to
management achieve!
Management Optional Implement performance
Set the flag workshop
interviews management system (LDMS)
Awareness
•Value
Top down analysis proposition •VOC
Focus areas •Strategy •KPI, RACI, Meetings Coaching
Target setting workshop •Gemba
•Lean behaviour
Middle Make resources
available
management
Set-up core team Train core team Coach core team
End-to-end process projects
Departement Lean Yourself Continuous improvement
Awareness
/ Teams •WS 1 Visual management, •Problem solving
white board, daily meeting •Kaizen
•WS 2 Cont inuous •Organisation projects
improvement and problem
solving
Train Methodologists

24. How does this affect ICT processes?
IS ITIL, PMBOK, CMM, … OBSOLETE
THEN?

25. ITIL as an example:
evolution in 23 years
• Throughout its history, ITIL makes service delivery more and
more explicit
– 1989: Service level management
– 1990: Problem, Configuration, Cost management…
– 1997: Customer focussed SLM
– 2006: ITIL V2 did not differ a lot from V1 although books were
called Service support and Service delivery
• Content restructured
• Introduction of a first function: Helpdesk
– 2007: ITIL V3 pivots the standard ICT operations processes to a
more service oriented view
• Content restructured again
• More focus on service management through the whole cycle
• Emphasis on creating business value
• Focus on “Continual Service Improvement”
– 2011: ITIL V3.1
• Business relationship management and demand management are explicit
processes

26. Lean helps to improve Service
and Customer oriented thinking
Put the customer in the centre
Look at end to end value chain
Performance driven organisation
People get responsibility to
improve time and again
Outside in focus
Introduce service thinking
Inside out focus
Introduce process
(ICT Operations) Process oriented thinking

27. Lean puts process responsibilities
back in the organisation
• Introducing lean techniques
on the work floor
– White boards
– Daily huddle / Short interval
control
– Issue / problem detection
– Problem solving
– Performance driven
culture Give the responsibility of the
– Move to continuous process back to the people on
improvement the floor

28. Some examples
• Catalogue Request Management in ICT HU
– Improvement of SLA fulfilment with 12-50 % for 7 most frequent used catalogue
items
– Reduce the implementation time below the target chosen catalogue items (e.g.
from 8 to 0,8 days for fileserver directory generation)
• “We are particularly satisfied about the ‘lean testing’: testing
together, and using small sprints, have led to on time in full
completion of tests”
• “I realise now I have to help my customer in understanding the
design – I will follow up more closely, give them intermediate steps,
and ask more questions about my assumptions.”
• After a thorough examination of the issues from 1 ICT development
department, it showed that 80% of the improvement actions were
internal, department related

29. Tracking the results of the programme
HOW DO YOU KNOW YOU ARE ON
TRACK?

30. Measure your results
by focussing on capability…
• Capability looks at 7 must haves
1. Voice Of the Customer feedback and analysis integrated
into process
2. KPIs aligned with value drivers in all departments
3. Top-down performance management system (LDMS) in
place
4. RACI defining accountabilities in all departments
5. White board and regular stand-up meetings in all teams
6. Regular Kaizen events to generate improvement ideas
(opportunities)
7. Regular 'gemba' walking tours by leaders on the floor
• This is tracked in all teams of the entities
– Monthly reporting on all performance meetings up till
management committee of SSO

31. Example of
capability tracking
MWB - Maximize Staff Engagement and Talent Development
KPI Lean Score
evaluate the Lean maturity of the organisation based on the 7 Lean Must haves
in combination with the capability of the methodologists
Scoring Level
actual
0 20 40 60 80 100
score
VOC team
LEAN must have 1. VOC feedback and analysis integrated
x 20
into process
team
PERFORMANCE MANAGEMENT
LEAN must have
2. KPIs aligned with value drivers in all departments x 20
3. Top-down performance management system (LDMS) in
place
4. RACI defining accountabilities in all departments
team
SHORT INTERVAL CONTROL
LEAN must have 5. White board and daily stand-upo
x 20
meetings in all departments
team
OPPORTUNITIES
LEAN must have 6. Regular Kaizen events to generate
x 40
improvement ideas (opportunities)
GEMBA team
x 20
LEAN must have 7. Regular 'gemba' walking tours by leaders
on the floor meth 1
x 0
meth 2
LEAN CAPABILITY OF THE METHODOLOGISTS x 0
meth 3
x 0
120
Lean capability of a team Reported on entity level Part of the
overall dashboard

32. …and benefits: example of
overview of benefits 2011
• Evolution of generated benefits in 2011
– December 2011 shows the final result:
• Realised benefits: 28,4 M € (vs a target of 30,6 M €)
• Available: 25,8 M €
• Identified: 41,7 M€

33. What do our customers
think about lean?
"By meeting every day at a fixed time
round the whiteboard, we are now
becoming involved with each other's
issues and successes much more quickly, "Each echelon in the hierarchy
it is easier to consult each other and to must be committed. That is
Our relationship with business was already good and
organise matters.” certainly half of the success“
has even improved while using some VOC-techniques.
Tine Procureur Middle Office KBC Asset Yves Lippens KBC Asset
More frequent but shorter meetings with our customer
Management Management
keep a finger on the pulse
Maarten Casteleyn, ICT project leader Investment
Services

34. LESSONS LEA(R)NED

35. Even a lean programme can
continuously improve
• Lean is a way-of-working, not a program
Reinforce that lean is a commitment to different way-of-working, not a project with an end-
date; minimize bureaucracy and use simple tools to plan and manage implementation,
e.g. maturity assessment, white-boards, and A3s
• Emphasize lean-thinking, not lean-tools
Focus on the creation of customer value though improved work-flow and the elimination of
waste, not the implementation of tools, e.g. VSM or 5S
• Conduct awareness training before implementation
Invest in up-front training to create understanding and awareness of lean principles including
continuous improvement, performance management, and adaptive change to minimize
resistance to change
• Top-down, bottom-up, and end-to-end
Implement top-down performance management to create “pull” for improvement; Build
capability bottom-up within teams; Optimize work-flow across end-to-end processes to
improve performance
• Implement KPIs before introducing lean techniques
Define value and performance measures first to identify focus areas and select the relevant
approach and tools, i.e. end-to-end vs. bottom-up
• Think big, start small, scale fast
Start with a limited scope proof-of-concept project to demonstrate benefits; Use self-
implementation for rapid deployment of foundation practices, e.g. white-boards; Use coaches
to build-capability and quickly replicate best-practices - not to manage and control
• Management is a key lever in the transformation
Management support, exemplary behaviour is very important for the success of the program

36. WRAP-UP

37. Summarizing
the high level timeline
• Programme preparation, analysis, set focus
1H2010
September
• Train first wave coaches
2010
Oktober
• Start proof of concept projects
2010
• Start second wave
April 2011
• Start “Lean Yourself” approach
2H2011
• 20 certified lean coaches, 20 certified methodologists, 5%
1Q2012 savings, first steps outside SSO
• 40 certified lean coaches, 150 certified methodologists, 20%
End 2012 savings, expand to the rest of KBC…

38. Thank You!
Questions?