Students

Classroom to cubicle: Applying coursework to office work

2010-05-04

Take a final exam or take on a real-world project: That's the option each of Raghu Santanam's students get in his class on business process and workflow analysis. An associate professor of information systems for the W. P. Carey School of Business, Santanam offered this choice last year to his Day MBA students. Only one set of students took him up on the opportunity to complete a real-world project rather than study for a final exam. Erin Noone, Veronica Rosell and Travis Thomas were the stalwart three who took on a project. Their task: Analyze the process for accepting credit- and debit-card payments to see if this was something that should be implemented by Arizona Public Service (APS), an electric utility serving more than 1.1 million customers. Currently, APS outsources its credit card processing function. Working with employees from the APS Center for Process Excellence (CPE), Santanam's students spent two months researching the credit-card industry, modeling business processes in place and drafting recommendations for changes, some of which are still under consideration. The team gained so much insight from the project, they were able to publish an article in Business Process Trends, a trade publication that covers process improvement. In the end, one of the team's most valuable lessons was about the process of learning itself. It's tougher to implement knowledge than it is to acquire it, but payoff from putting scholarship into practice is more profound than any A+ exam grade. Scoping it out From start to finish, the biggest challenge the students and their corporate customer faced was piecing together a project charter. "It took quite a bit of work to go from people's ideas of what they wanted to what actually could happen," says grad-student Thomas. His fellow MBA candidate, Erin Noone agrees: "APS had a lot of different opportunities we could have tackled. Only having two months, we wanted to make sure we took on something we could successfully complete." Christine Dicken, a member of the utility's CPE, was one of the sponsors guiding the students and helping them connect with the APS staffers they needed to reach. Even she admits nailing down the project charter took some doing.

In the end, one of the team's most valuable lessons was about the process of learning itself.

"I'm a certified project manager and, in this case, I was just like any other customer," she says with a laugh. "When the students came to us and asked what the APS team wanted them to do, we all thought, 'Oh! Resources! Let's use them!' We wanted them to do everything from soup to nuts." Dicken quickly recognized the reality facing her would-be resources. "They were carrying full course loads at school and working on this project part-time. They only had two months to get the job done," she says. "They had to manage customer expectations." Finding "as is" and "to be" The purpose of Santanam's project-versus-test option is to give students a chance to test themselves in a workplace. "I look at all the different process enablers in class," Santanam explains. "The students are armed with skills and methodologies for creating a process model, interviewing stakeholders, understanding where the problems are and so on. They are required to come back with a report on what changes they recommend, why they recommend those changes and what impact the changes could have on the business. That's exactly what this team did." Specifically, the students used interviews and research to document an "as-is" condition for credit- and debit-card processing at APS. Then, it offered up a "to-be" recommendation. Ultimately, the students concluded that APS should move processing, an outsourced function, in-house and offer customers the option to pay with credit or debit cards in person at the utility's payment center. Getting to the "as is" picture took plenty of footwork. Among other things, the students visited an APS payment office, researched merchant services to discover what was involved in credit-card processing and how much it cost, examined computer regulations surrounding security issues in card processing and even explored what payment processes were like from a customer standpoint. It was their outsider's role that allowed the team to identify with the customer's standpoint, Noone says. "We saw inefficiencies and processes that could confuse a customer," she adds. For example, the team spoke to one APS staffer who was nonplussed when customers would pay the utility's third-party credit-card-processing vendor with a check. After all, going through the vendor meant the customer had to pay a transaction fee along with the bill. Customers who pay their bills with a check can avoid that fee by paying APS directly. "The problem was in the process," Noone notes. "If you want to pay with a credit card, you call a number that puts you in touch with the third-party card processor. But, the customer doesn't know that number goes to a third party." She explains that the interactive voice-response system has customers push buttons corresponding to payment methods: credit, debit, check. If a customer changes her mind while in the middle of this process and chooses to pay with a check instead of her credit card, the fee still applies, and all the money goes to the vendor before it reaches APS. That process delays receipt of revenues to the utility. Speedier receipts was one of the benefits the team identified would come from bringing card processing in-house. The team also found that credit card processing was less expensive than APS workers expected. In fact, the savings on processing fees was not, in the team's view, significant enough to continue outsourcing the card-processing function. By the book To justify their final recommendation, the students pulled lessons from Michael Hammer and James Champy, authors of Reengineering the Corporation: A Manifesto for Business Revolution. For instance, Hammer and Champy say that steps in a process should be performed in a natural order. According to Noone, this wasn't happening when card-holding customers got passed off to a third party for payment processing. Likewise, the vendor arrangement violated Hammer and Champy's rules that reconciliations should be minimized. With the outsourced process, revenue is reconciled against posted payments by both APS and its vendor. Bringing the payment processing in-house eliminates one reconciliation. Experience matters Noone and her cohorts are not the only students who applied Santanam's coursework to real-world applications. While this trio is the only group that did the project-versus-exam switch, Santanam also expects each student to bring a business problem to class for review.

One student brought in issues with helpdesk processes. Each time a problem went through an "escalation," it was handed off from one worker to the next. "With each hand-off, you may lose information or drop the caller altogether," Santanam explains. His student worked on refining operations to get helpdesk callers the assistance they seek. In another exercise, a student looked at how one division of a global organization managed to outperform others in budget planning. "My student looked into what that one division was doing to see if it could translate into a process for others to use," Santanam adds. Bringing it home Travis Thomas, one of the students who took on the APS project, sums up how Santanam's process-oriented lessons now permeate his life. "They've transformed the way I think," he says. "I don't want to just get things done. I want them to be done as efficiently as possible." Thomas already has a job lined up to start as soon as he completes his MBA studies in May. It's not in a process-improvement group like the CPE, but he'll be doing process work, all the same. "Right now, supply-chain management is where a lot of process-improvement methods are being applied," Thomas says. That's what he'll be doing soon for his new employer. But, he's already applied his new-found process skills at home. "I have six girls," he says. "My wife and I are constantly working on ways to make things run smoother." For instance, Thomas and his wife recently charted out the as-is chaos of the family's morning routine, planned a to-be vision of what they wanted to see happen, and now have a process for getting six young daughters up, dressed, fed and in church by 8 a.m. "Everything is a process," Thomas says with a smile. "I even have my process for making it to the bus on time down pat. I usually get to the bus stop within one minute of the bus's arrival." Bottom line:

Students who took the challenge of doing a corporate project instead of taking a final exam gained extra lessons from their course.
First, they discovered that the toughest part of a project is getting its scope nailed down.
Next, the found that being outsiders to the corporation offers perspective similar to the customers and, therefore, delivers insights.
Additionally, they discovered workarounds to the limitations of being an outsider.
In the end, applying knowledge intensified learning.

KnowIT

Classroom to cubicle: Applying coursework to office work

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