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Success Story: Reducing Payment Processing Errors at LA County With Alex Ogunji - GoLeanSixSigma.com

LA County Registrar Recorder County Clerk continues to pave the way for process improvement. Watch this 30 minute success story to learn how Alex Ogunji is helping government reduce waste, build capacity to deliver more value and minimize costs by reducing payment processing errors.

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Success Story Transcript

Tracy: Hello and welcome to a project presentation sponsored by GoLeanSixSigma.com. Today, we’re going to be highlighting LA County and a specific project called Reducing Payment Processing Errors at LA County. And we have our presenter from LA County, Alex Ogunji, and he is a Lean Six Sigma Program Coordinator.

Hi, Alex.

Alex: Hey, Tracy.

Tracy: How are you?

Alex: I’m doing great.

Tracy: Great. Well, I have a slide up that talks about you and what you do there. So just tell us a little bit about yourself.

About Our Presenter

Alex: Sure. So I’m Alex Ogunji. I’m a Master Black Belt. At the Registrar Recorder, my role is basically to coordinate all of the Lean Six Sigma work within our structural program. We operate about 42 idea boards. We have comprehensive training program at the Yellow Belt and the Green Belt level and our goal is to ultimately reduce errors, reduce cost, and to ultimately empower employees by having their ideas become reality.

Tracy: So tell us a little bit about yourself. What do you enjoy when you’re not working?

Alex: Well, when I’m not working, I’m actually a musician. I love to play music. I play the saxophone. I love spending time with my family. And I really enjoy Netflix.

Tracy: Well, that’s good. That’s a very relaxing hobby I think especially when you have small children, right?

Alex: It is.

Institution of Lean Six Sigma Program in LA County

Tracy: So tell us a little bit about the institution of the Lean Six Sigma program here at LA County and the Registrar Recorder County Clerk.

Alex: Right. So the Registrar Recorder County Clerk has the first and only comprehensive Lean Six Sigma program in LA County and is a leader in the methodology. And we train folks from all around the county. We also train all of our own employees. And beyond the training, we use the idea of work to bring the training forth and give people the opportunity to use Lean Six Sigma methods in their day-to-day work.

So these idea boards hold meetings. Folks present ideas. They discuss them. And sometimes, ideas relate to other sections or other parts of the process that are outside of any given idea board and they will collaborate, kind of like they did on this project.

Ultimately, our goal is to build an infrastructure where we have folks who function as consultants, who oversee multiple projects only have Green Belts that are working on projects in their specific area of influence to bring transformation to the work that they do there.

Ultimately, our goal is to build an infrastructure where we have folks who function as consultants, who oversee multiple projects only have Green Belts that are working on projects in their specific area of influence to bring transformation to the work that they do there.

Tracy: Wonderful. So tell us a little bit about other people that you have trained beside your employees.

Alex: So besides our employees, we recently trained our LA County Board of Supervisors and sharing the Yellow Belt methods with them. We also provide training for our Management Fellow Program which is a program for folks who have Master’s degrees and it’s basically a management training program within the LA County.

And so, we coordinated with Department of Human Resources downtown to actually train those folks from the Management Fellow’s program. And we also train folks from the Administrative Intern Program which is a program for those folks with Bachelor’s degrees to a 2-year program where they get trained in central county departments learning about budgets and all those kinds of cool things. And then they will come and work in the line department. So we offer it to them as part of their training requirement and they love it and they ask us every year all the time when we’re having another training.

Variance Project

Tracy: Wonderful. Well, why don’t we go ahead and talk about this exciting project that you guys did because one of the purposes of these presentation webinars is to spread the good word on good projects happening in government? So I have here your – a Lean Six Sigma Green Belt project called the Variance Project. So why don’t we go ahead and talk a little bit about what you guys did over there?

Alex: Sure. So the Variance Project was – we also called it – another word for it is – a term for it was the tribunal presentation, the tribunal collaboration. We have four bureaus in our department so it was pretty big to have three bureaus working on the same problem as it shows up in the individual areas. This project was actually generated through the idea boards and two specific areas. And it was through our consulting and coordination program that we identified that boards were basically complaining about the same issues that affected them differently.

So we brought these teams together, included our third party, which was the Recorded Bureau who ultimately is at the frontline of this problem. And together, these bureaus collaborated to make a transformation and improvement on how we relate to discrepancies within our VitalChek or credit processing systems.

Background

Tracy: Wonderful. Let’s hear a little bit of background on what this Variance is and what is it that was the issue.

Alex: Right. So Variance is basically, let’s say there’s a discrepancy in credit card totals between JEDI which is our internal processing system that we use in our Recorder County Clerk side of our house which is folks that come in for birth certificates, death, marriage certificates or also real estate records or document recordings from title companies and real estate companies and things like that. So our JEDI system was developed in-house and it is our main hub where we keep all of the data for our customers.

VitalChek is the system, the credit card processing system we use to process payments for items processed through our JEDI system. So there sometimes at the end of the day when we’re balancing the books between the transactions that went through JEDI system and the amount of payments that we’re getting through our VitalChek system, there would be a discrepancy. It can either be plus or minus, meaning we either didn’t collect as much money as we should have or we collected more than we needed to.

And these discrepancies were caused by transactions being saved in one system and not the other. On some level, it was a system error initially. But ultimately, we discovered that there was a lot of human element that was contributing to the process through our discovery.

Team Work

Tracy: OK. So was it challenging getting these three bureaus to work together?

Alex: I think with all collaboration, there’s always an element of challenge, and it was. And the challenge was being able to have the same definitions to turn to establish an operational definition related to even the Variance that took us time to even say, what is the variance for each party? And it’s different for Administrative Bureau who reconciles payments with our banks than it was for our Information Technology Bureau who primarily runs the JEDI system.

And so coming together on the definitions of what was happening and identifying the problem, was an exercise that we had to do collaboratively and then they all worked individually to make sure that they held at their end of the participatory project.

Swimlane Map

Tracy: So I have here your swimlane map, the current state. So tell us what were some of the discoveries when you guys map the current state?

Alex: Perfect. So initially, the problem was brought up in our Administrative Bureau and the initial transaction happens in our Recorder Bureau. So all three teams got together and created this swim lane map. And essentially, the process starts when someone comes in to either purchase a document or make a transaction with our company, with the organization. And it goes into our Recorder County Clerk Bureau. There could be a user error or a system error between JEDI and VitalChek. So those are the two entry points of the problem.

Tracy: OK.

Alex: And it causes customer delay for the customers so they wait while it gets reconciled. And ultimately, once that error occurred, the Administrative Bureau will be the ones to find it. The Recorder Bureau doesn’t actually have the ability to locate the variance. So the Administrative Bureau would then get – will receive the hand-off, search for the variance. And during this, they had a manual process for searching it where they would basically get two reports and reconcile them side by side. And we’ll talk a little bit more about that later.

Ultimately, they would let the Recorder know once they resolved it and figured out where it was, what happened. If they couldn’t figure it out, the Recorder Bureau would also help in researching the variance to find the source of it to reconcile and ameliorate the problem.

Once Recorder got a hold of it, they also didn’t have the capacity to research like we said before, so they would notify the IT Bureau who would also help them research the problem. All in all, just researching the problem took quite a lot of time for all areas.

Problem (Defect)

Tracy: I was just going to say, you have here the Recorder County Clerk Bureau and then the problem and I wasn’t sure if this was the problem from their perspective or in general, they get agreement on the problem.

Alex: Right. So yeah, this is the problem specifically for the Recorder County Clerk Bureau. Like we said before, it showed up differently in each area. So for the Recorder County Clerk, there were the errors which means that when a transaction changed on one end, meaning that say, we were recording a document and realized how it there’s another one here, we would have to void the initial transaction. If it wasn’t voided correctly, it would create a discrepancy in the system.

Tracy: OK.

Alex: And there’s basically some business process. For instance, like the supervisor clicking a button and if it wasn’t clicked, it would cause a duplicate transaction which will give us an over reach.

There was also the issue of knowledge gap, meaning that supervisors wanting to have a standardized way for fixing the problem and communicating to the cashiers on how to avoid the problems primarily.

And so, there were some training gaps. Some people have been trained on it. Other people haven’t. And when surveying the folks on how to get it done, there was a varying weight of the process and approach of actually handling the issue. So it wasn’t standardized.

Tracy: OK. So what was the impact of all of this to customers?

Alex: Well ultimately, the customer would have to wait. If we underpaid, meaning that we were underpaid, we would have to wait until we received our money and once we figured out where the variance was sourced. But if a customer had to wait – they did have to wait until we located the source of the variance.

And sometimes they would attempt to resolve it in person the customer would have to wait off to the side while we try to reconcile this in real time. And if not, they would just have to wait until we finally reconcile and we can issue them a check for an overpayment if that was the case.

So it would interrupt the workflow for them and stop the line. We have lines. We are highly public and we have a high traffic public counter and so the lines would get longer. And this section has also – didn’t have the ability to properly balance their collections at the end of the day, which would cause them to have to stay late and to try and find the variance if they could before it got sometimes to Administrative Bureau.

Tracy: OK. Great. So what did you guys end up doing?

Alex: So the Birth, Death and Marriage, BDM, their subject matter experts, they actually work with IT to come up with the common cause variations. They interview them. They are providing information on what happened on the line because quite often, IT wasn’t there on the line so they couldn’t see exactly what was causing this variance. And so, they work together to come up with a list of problems that cashiers and supervisors all receive the standardized training that IT generated.

And the cashiers and supervisors also got like a cheat sheet. And this cheat sheet allowed them to – it’s kind of like a visual management for them to have and post inside their work area so they can avoid causing some of the user-generated errors.

Tracy: OK. Well, it sounds like you had a pretty big impact.

Alex: It did actually for them. Once they were able to standardize the way that they operated, they were able to reduce the variations. And we’ll get more into the details of it when we talk about the other bureaus.

Once they were able to standardize the way that they operated, they were able to reduce the variations. And we’ll get more into the details of it when we talk about the other bureaus.

But the ultimate thing was that it was a positive impact. The supervisors were able to balance their cash balance at the end of the day with the reduction in errors.

Tracy: Wonderful. I think what’s really interesting here you’ve got the problem and the impact and the solution and the benefit identified by each bureau which I think is pretty interesting. So it really does show the collaboration and the impact for each of the different bureaus.

Alex: Exactly. And really, it shows how a problem can really go over three major areas. I mean that takes up over 75% of our department’s manpower within those three bureaus and it’s amazing how a problem can really show up differently for each person.

So in our Administrative Bureau, they were the ones who have to find the variance and it was not an easy task. So like we said, they had to manually compare a paper doc and to actually figure out what happened. And it usually takes about three hours to locate a variance. So if there was a discrepancy either a plus or a minus and our cash balance at the end of the day, it would take about three hours to look for it.

So to quantify, it’s about 23 variances in 9-month period. And so during that time period, there were about 69 hours spent searching for the variances alone.

Impact

Tracy: Geez! That’s a lot of time.

Alex: It was. It was a lot of time.

Tracy: You must be very unhappy with the process.

Alex: I know. And ultimately, the way that – and when we get to the solution, it was actually discovered by an employee who was searching for three hours. And it’s such a great example of those folks that are doing the work and that are part of reconciling process. They are going to be your best guy for fixing. I mean this solution was actually generated by somebody who just didn’t want to take that time to do it anymore and they came up with a better way to do it.

So this process, the reconciling process and identifying this is it’s based off a fiscal policy that would need two folks to reconcile. So it would have – it would cause delay.

Tracy: OK.

Solution

Alex: It’s time-sensitive. It took a lot of time and there are a lot of delays in terms of processing. So ultimately, they developed a streamlined method to locate the variances using Excel and it was basically a progressive form of automation. It’s not fully automated but by using the tools and power of Excel, they’re able to discover faster ways of doing it a lot faster than comparing paper side by side.

They also came up with the step-by-step guide on the new process that was designed by the subject matter expert. They held a training with actual mock situation so they could practice and they trained everyone in the unit on how to search for variances using the new method in Excel.

Benefits

The benefits were amazing. Time reduction was amazing. It was three hours before. With the improvement, it became 10 minutes to search for on variance, 10 minutes.

The benefits were amazing. Time reduction was amazing. It was three hours before. With the improvement, it became 10 minutes to search for on variance, 10 minutes.

Tracy: Wow!

Alex: And what used to take – exactly, right? And what used to take three folks to look for the variances in terms of – and we’re talking about productivity here, we’re talking about the number of staff members that it would take to search for any given variance. So two people would look for one but if there are more than one, it would usually be around three people who are doing it and it was reduced to one. And those staff were freed up to be able to take care of essential business inside of their section, the Cash Management Unit, that wasn’t being done.

So just so you know, this section has to reconcile every day. A lot of money comes into the building on a given day and this isn’t the kind of thing where if they don’t have time they can finish it the next day because every single day, the bank comes to collect the cash and we have to have a reconciliation by the end of the day. So it would be really pressure, a lot of pressure for these folks to be able to find these variances and get it done in a timely fashion.

Tracy: Yes. And I really like what you said because I think the important thing is this frees up staff to do other more important things. I mean if the variance research takes three hours and now it’s only 10 minutes, that’s just wasted time for people. Precious assets being wasted on a 3-hour process and now it’s only a 10-minute process and they can do other things that are more important that may deliver value to the customers or those people coming in to the building. So that’s great. Great.

Information Technology Bureau

So tell us a little bit more about the IT Bureau.

Problem (Defect)

Alex: So in the IT Bureau, the problem was that there wasn’t a standard way to solve these problems when they would come. Just how there was a big interruption in the Admin Bureau for searching for the variances, IT’s work flow would have to completely stop and they would have to go and try to resolve issues and work for it when a variance occur in real time.

So, the source of the problem was that the web orders were archived incompletely and so, they wouldn’t appear on the report. Now, that’s a little jargony but ultimately, IT’s job was to solve the problem as soon as possible so they could resume normal business services on our line that are keeping our lines down.

So for them, because there was no standard method for doing it, it was kind of just get it done however you can and it’s very frustrating for them and it also took a lot of time. We’ll talk about that impact later.

Tracy: OK.

Impact

Alex: So the primary job of these folks are business analysts. When someone has a problem, they write system requirements, they interview subject matter experts to provide specifications for the development team to build. So it’s really important that they do that. And as a matter of fact, there’s a lot of request all the time after technical services in this regard. So they would have to stop doing that which is their primary function to go and handle these problems when they occur. And it would take three analysts to figure out one variance.

Tracy: Geez.

Alex: Now ultimately, there was about 18 hours per week that they were doing this over a course of a year which accumulated to 936 hours with researching and resolving variances for this team.

Tracy: Geez. That’s a lot.

Solution

Alex: It was a lot, really a lot. And so, they figured out a way to first purge the incomplete web orders after 90 days. Now, it was as simple just contacting the company that held the web orders, VitalChek, and ask them to create a process where every 90 days it would purge the web orders so that it wouldn’t cause discrepancies on our system. And that was something that we don’t have to monitor when this agreement was rendered to do.

Then they created a list with various variances encountered by the staff. So they would do kind of a historical analysis. They did historical analysis of all the variances that occur inside of the area so that they could say, “Here are the common causes and here’s why it happens.”

Out of that, they developed 8 resolution cheat sheets of all those common causes that they interviewed and discerned and were able to provide training for the users. And this is the training that was much needed and really appreciated by the Recorder Bureau. And this is the training we did mention earlier. So they did one for the cashiers. They did one for the supervisors. And ultimately, they trained 94% of the staff in our headquarters and about 30% of them are field offices.

Benefit

The benefit was amazing. So the reduction of the variances once they started training, we tested after the training and went from 8 variances to 1 variance per month. So were able to reduce those areas on the line.

And with the standardized process that they created internally, it took three analysts – what used to take three analysts only became to take one analyst. And the time reduction was reduced based off reducing the variances from 936 hours to 60 hours per year, which is a major, major reduction.

Tracy: That is very impressive. That really is. So you know what I love about this is I think one of the biggest excuses we always hear about process improvement is people don’t have time to do it. And when you do apply it, this is the kind of impact you can have. You can actually save yourself 936 hours of the year or minus 60 hours I guess because that’s still being applied to the process.

But I think that’s what I think is the biggest misnomer is people say they don’t have time, they’re too busy, but if they actually spend time to work on their processes, they will find time because they’ll have made their processes more efficient. And so, this is a true testament, these kinds of project is a true testament to that, to why people should actually spend time implementing process improvement.

But I think that’s what I think is the biggest misnomer is people say they don’t have time, they’re too busy, but if they actually spend time to work on their processes, they will find time because they’ll have made their processes more efficient.

Total Benefit

Alex: Definitely. Definitely. It’s really important, I just want to add too that the folks especially in our IT Bureau, there is a real pressure for them to do the analytical work and this was a huge interruption. And there were times where it was difficult for us to meet on the project because they had such a high workload. But the fact that they made the time to make their lives easier is what allowed them to actually experience the benefit. So they did have to take the time and step back to do it. And the project took a few months to actually get done but as you can see, it was worth it.

Overall, the total benefit was 8 variances reduced to about 1 per month across the department. So ultimately, the reduction from 6 staff to 2 staff has freed space for some folks to not even have to worry about the problems when they do occur. But the greatest win was when we were able to reduce from the thousand hours to 66 hours. Those staff would be able to respond to the high pressure situations that already exist and actually still exist today, there are still quite a few requests that are coming through but they are able to help manage it.

And also, there has been a great impact for customer service and being able to help our customers and instead of having to solve problems in front of them actually, just being able to fix and solve their problems or the reason why they actually came into our office.

Tracy: That is really exciting to hear about, Alex. I love this example because it really is a testament to productivity improvements and government just doing great work. Now, they can even – they have more capability to do more good work for residents and LA County residents and citizens. So that’s really exciting.

Questions

I do have a couple of questions for you. One of them was how long did the project take? But I think you did say that it took a few months?

Alex: Yeah. I think the total time that it took was about four months, which is actually relatively not that long especially when you’re talking about, essentially it was three projects. So it was actually done in a really good amount of time.

And I think the reason why it didn’t take longer is because the group dedicated a weekly meeting to it and they did have their big meeting with all the three bureaus in but each bureau would meet individually and come back to the bigger group and just updates and be able to collaborate with each other effectively. And I think it’s because their weekly meetings, they are able to do it in about four months.

Tracy: That’s really exciting because I was going to say, four months does not sound like a very long time to have three bureaus involved in a process and make some significant improvements like you have.

Alex: Definitely.

Tracy: So what would you – I guess what were some of your challenges? What were the bigger challenges that you guys experienced to get this project done?

Alex: Well, some of the challenges, for instances, the system errors. They weren’t generated inside of our department necessarily. As a matter of fact, it was difficult to understand if it was from our JEDI system or from VitalChek. And when it’s outside of your scope of influence, we wanted to eliminate the variances. But as you can see, we still have them. So we were able to reduce them significantly but the challenge is not always being able to eliminate it and figuring out the ways to solve problems with just the tools that you have to use.

I think another challenge was the time, finding the time. I do think four months is a short time. And I think it could have gone sooner but finding the time, for instance the training, organizing the trainings was difficult. As you see, we didn’t get – we got about 29% out in our district offices. Those offices are part of our Recorder Bureau and process out in the field.

We have six district offices. And because those offices were so small to actually hold the training, we would really interrupt a lot of business. And so, it was difficult to get all those folks to train. So I think resources were sometimes an issue for us with being able to share the standardized training with all the staff members.

Tracy: OK. Wonderful. Thank you for sharing that. So for – so my question is, do this project help the bureaus communicate better in general? Do you feel like the relationships are better or more positive? Not that they weren’t before, but did you notice that there’s a better approach or a sense that they can work more collaboratively together?

Alex: Yes, definitely. I mean the process of doing the swim lane map together as a group, first, the groups understood the process holistically where prior to that each section was talking about it just from what they can see. And I actually attended the idea board meeting, the different idea board meetings, where they were talking about this and identifying the correlation between what they were talking about. And so their understanding of the process increased dramatically to the point where they understood what’s happening and the impact across the entire department.

Another really good thing that increased with their communication is that identifying the Lean Six Sigma structure that we have. We empowered our consultants that we have in each of the bureaus to work with each other to organize the process. And so by doing that, their communication increased which allows the conversation around process improvements that might relate to both of those areas to happen. So we set a precedent with this project to share with everyone that we can do it.

We empowered our consultants that we have in each of the bureaus to work with each other to organize the process. And so by doing that, their communication increased which allows the conversation around process improvements that might relate to both of those areas to happen. So we set a precedent with this project to share with everyone that we can do it.

And the folks that are tasked with interacting with each other across the bureaus, the consultants, they were kind of encouraged to be able to go and chat with other bureaus when there were issues, that conversation began and has continued and flourished. We’ve had more collaborative projects since then and our consultants have been able to work together effectively. And this really set the tone for what was possible. And since then collaboration has increased in our department.

Tracy: That is amazing. Thank you, Alex. So I have one last question and then I will let you go. So do you have any advice for another person in government who is a Green Belt who might be doing a cross-functional project? Do you have any advice that you would give them in order to make sure that their project is successful if it’s across bureaus or across divisions or across sections or functions?

Alex: Yes. I would say – I mean as much as – we used the DMAIC method. As much as DMAIC can be useful for you in your own specific area, if you don’t know what happens before or after what you do, don’t assume. Actually sit down with those folks in other areas and begin a conversation to discover the process together. I think that sometimes it might seem easier because it’s hard to get buy-in to go do a demo, walk across areas or to ask someone in another area who you don’t know their reporting structure to come and validated your process map. But it’s so essential because you could really miss something important.

So, I would say identifying champions is also important because they’re the ones at a certain point, and we didn’t mention this earlier, we spoke with all of the leaders of these areas in identifying and showed what the initial problem was and got their authorization to work together. Once we got that authority, the project really took off.

So I would say get your champions involved early and really go talk to your process partners upstream and downstream.

So I would say get your champions involved early and really go talk to your process partners upstream and downstream.

Project Presentation Webinars

Tracy: Well, I highly encourage the same thing. So I’m so glad you said that. So Alex, look, I want to thank you so much for your insights into the project that LA County did. Thank you for your time and your presentation. I’m sure that a lot of our listeners are going to get some knowledge and gain some of those insights from hearing this so I really appreciate that.

Alex: No problem. It has been a pleasure to be here. I just want to say thank you for the opportunity to share what we do and to share the success of our amazing Lean Six Sigma team at Registrar Recorder County Clerk.

Thank you for joining us!

Tracy: Yes. So that was Alex Ogunji from the LA County Registrar Recorder County Clerk. Thank you so much. And if there’s anyone else out that’s listening that you think would be a great success story for a project presentation, we would love to hear about it. Just contact us. And here’s our website information. Don’t forget to go to our website to hear the webinars and for free tools and templates and more.

Have a great day everyone. Thanks for joining us.

Alex: Thank you.

Tracy O'Rourke

Tracy is a Managing Partner & Executive Advisor at GoLeanSixSigma.com. She is also a Lean Six Sigma Green Belt Instructor at University of California San Diego and teaches in San Diego State University’s Lean Enterprise Program. For almost 20 years, she has helped leading organizations like Washington State, Charles Schwab and GE build problem-solving muscles.