connecting your people, process and technology...alignment of services and functional processes...
TRANSCRIPT
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Tuesday, October 20, 2015
Connecting Your People, Process and Technology
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Session Overview
Methods for adopting a holistic approach to the evaluation of your people, process and technology
Identifying opportunities to increase efficiency, reduce cost, and effect sustainable organizational changes that will optimize operational performance
Recommended metrics for evaluating internal and external IT functions and then aligning those metrics with the organization’s strategic vision
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Alignment of your organization structure, span of control, activities and roles for each functional process area
Alignment of services and functional processes based upon geographies, strengths, current and planned technologies
People
Key Components of Performance
Performance & Capabilities
The reengineering of functional processes, which is typically designed to overcome current challenges and to align with leading practices
Process improvements are powered by technology enhancements for maximum efficiency gain (not vice versa)
The implementation of a leading practice application to better enable and automate functional business processes
Technology enabled transformations are typically process led and efficiency gains are created by maximizing the use of the application features and functionality
Identification of controls in place to mitigate risk of errors
Data, process and reporting and governance
Identification of key business drivers
Data driven decision support and actionable analytics
Enables critical reporting needs driving business insights
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Organizational MakeupAs Seen Through an Improvement Lens
Achieving Vision and Mission
Technology
Processes
People
Economy• Costs of
Operations
Efficiency• Methods of
Operations
Effectiveness• Results of
Operations
Organization
with
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What Does That Mean?
Performance improvement goals:
Become more efficient to drive improved financial results
Rethink performance to encourage innovation
Increase productivity, reduce costs
Position for growth
Link opportunities to strategic goals
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Why Do Organizations Care About Continuous Improvement?
Desire to grow the organization Outgrown technology solutions; unhappy with current
technology Improved competitive advantage? Customer satisfaction Employee satisfaction Be more profitable Want to fix “broken” processes
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Cost of Confusion
Consider a typical workday for one of your employees. Is that employee always completely clear on the “who, what, when, where, why, and how” of the task at hand?
Conservative estimates are around 25% for the time wasted on confusion.
For an organization of 100 people with an average salary of $50k per year, the cost of that confusion is $1.25M per year.
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Could Your Organization be More Efficient?
Do you have timely and actionable financial and operational reports?
Is your company concerned with spending controls? Does it seem like you have a lot of manual processes? Do you have reoccurring errors or bottlenecks? Do you have the capabilities and scalability in your
organization to support expected business growth? Do you have ongoing projects that never seem to be
completed? Is your organization prepared for M&A events and related
integration efforts? Do you have good visibility into the efficiency and
effectiveness of how work is done? Do you know what your people are doing?
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Optimization Framework
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Real Life Examples
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Loan Process Optimization
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Loan Process OptimizationSituation
$500M bank in the Central US Restructure lending processes and workflow to improve
efficiency and reduce operating costs Develop metrics and implement measurement systems for key
lending functions and tasks Maximize the use of technology to eliminate redundancy and
simplify operations Lower operating and compliance risks (meet the expectations
of the board and regulators) Design processes that support the bank’s relationship banking
strategy and maintain or improve customer service levels Position the bank for continued, profitable growth Provide bank management and staff with knowledge and tools
to support ongoing efficiency improvements
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Loan Process OptimizationOutcome
Developed:- Process flows - Updated training process- Single forms in the place of multiple data inputs
Eliminated redundant data entry Streamlined processes Reduced turnaround time Worked with software vendor to better understand options Changed the processes to better use their technology Implemented document imaging Reduced staff Reviewing automated underwriting system
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IT Organizational Design
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IT OrganizationSituation
$1.3B bank in the Central US Growing quickly Lack of appropriate IT staff Large number of applications and user base Downtime and continual outages In process of implementing HRIS applications Heavy regulator presence
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Non-IT Department
• Utilization of business applications
• Selection of Systems• Simple tasks• Project Management (in
conjunction with IT Department and Technology Partner)
• Company wide Technology Training
IT Department
• Network availability & security• Application delivery• Technical troubleshooting• Technical partner collaboration
& communication• Application integration
resource coordination• Continual IT skills
development• Business Analysis• Facilitation of system
selections• Project Management (in
conjunction with non-IT Departments and Technology Partner)
External Expertise
• For vision / planning• Implementation of
advanced technologies• Essential projects• Defining and/or
implementing foundational processes
• Project Management (in conjunction with non-IT and IT Departments)
IT Support FunctionRecommended Leverage Model
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IT OrganizationOutcome
Development of IT Committee Requested external resource to sit on committee Added a CIO and ISO to help manage the process Direct linkage to the CFO Developed an IT plan with measurable results Overall increase in customer satisfaction Still in process of improving but headed in the right direction
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Enterprise Content Management
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Enterprise Content ManagementSituation
$3.5B Bank in the Central US Looking towards growth Paper is stored in attics, basements, and
offsite locations Information is hard to find in a timely
manner Develop and implement a document
management strategy that covers both electronic and hard copy documentation
Reduce costs related to data and paper usage
Improve efficiency Primary driver is risk management Maintain compliance, while allowing
appropriate access
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“I understand and have faith in our document management policies,
and I know exactly how/where to find the
documents I need when I need them.”
“I don’t really think about where I store documents - I save everything I need
on my own drive(s) or in Outlook.”
“I never know if/when I might
need a document in the future, so I
save a copy just to be safe.”
“My department has special access or security needs,
so we have to keep our documents on
our own drive.”
Probably many others...
Mind Shift
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Enterprise Content Management Outcome
Developed:- A policy and approach to handle both hard copy and electronic
documents, including emails- Selected tools to support document management activities- Ongoing communications and training
Reduction in storage space Able to reorganize space to better meet the needs of a
growing staff Reduced paper, shredding and rental costs As they are reducing double storage, offsetting online storage Better able to find documents as needed with increased
security
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Finance Transformation
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Finance Transformation ExampleSituation
$1.5B Bank in the Eastern US Evaluated Accounting, Finance, Payroll functions 15 days to close, limited reporting Lack of faith in data/validity of information Lots of manual efforts, exporting data from system to Excel for
manipulation Disconnect between accounting and management team
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Finance Transformation ExampleOutcome
Reviewed/automated Journal Entries & reporting Implemented Closing Calendar/Meetings Reconciliation process Relocated processes to appropriate departments Implemented timekeeping software Implemented organizational changes Developed policies and procedures that met current needs
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IT Outsourcing
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IT OutsourcingSituation
$415M financial institution Bank growing significantly Issues recruiting and retaining IT staff Inconsistent technology roadmap IT managed in silos Security complexities, case by case basis Lack of monitoring and reporting systems
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Outsourcing Options
IT Outsourcing: Instead of keeping your technology functions in-house, IT outsourcing involves farming out some - or all - of your IT functions to a third party provider. IT outsourcing can be designed to fit the technology needs of any organization, transitioning functions to a company with IT as its core competency.
Managed Services: Managed services is the most definable form of outsourcing with specific, detailed costs and expectations, as well as inherent flexibility. This strategy is very attractive as it provides scalability and defined expectations at a consistent month-to-month expense.
Staff Augmentation: Staff augmentation provides the ultimate level of flexibility, filling a specific skill set in times of need such as extended staff absences, special projects or increased seasonal demand. Many companies also utilize this strategy after experiencing difficulty finding specialized talent or lacking the resources for full-time internal staff.
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Cloud Computing ContinuumYo
u M
anag
e
Storage
Servers
Networking
O/S
Middleware
Virtualization
Data
Runtime
Applications
Traditional On-Premise Computing
AC/Cooling
Facilities
You
Man
age
Storage
Servers
Networking
O/S
Middleware
Virtualization
Data
Runtime
Applications
Co-Location aka CoLo
AC/Cooling
Facilities
You
Man
age
Storage
Servers
Networking
O/S
Middleware
Virtualization
Data
Runtime
Applications
AC/Cooling
Facilities
Infrastructure as a Service
(IaaS)
You
Man
age
Storage
Servers
Networking
O/S
Middleware
Virtualization
Data
Runtime
Applications
AC/Cooling
Facilities
PaaS/PaaS/Private Cloud
Storage
Servers
Networking
O/S
Middleware
Virtualization
Data
Runtime
Applications
AC/Cooling
Facilities
Software as a Service
(SaaS)
Heavy Capital to Heavy Operating Expenditure
Serv
ice
Prov
ider
Serv
ice
Prov
ider
Serv
ice
Prov
ider
Serv
ice
Prov
ider
27
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IT OutsourcingOutcome
Outsourced day-to-day service capabilities Managing IT enterprise wide Established single threaded security Bank has been able to increase customer and employee
satisfaction. Benefits include: Consistency in service for end users Improved ability to predict how and when technology dollars are
spent, reducing the likelihood of surprise expenditures Alignment with the rest of the business Reduced technology expenditures, resulting from a common
strategy and lower turnover in IT personnel
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IT Outsourcing
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System Optimization
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System OptimizationSituation
$900M bank in the Western US Maximize use of technology to achieve business goals Obtain best value from technology vendors through
successful contract negotiations Design and maintain a technology framework that can
efficiently and effectively expand as the bank grows Position the bank for profitable growth through greater
efficiency and business process automation Determine if the current key vendor relationships for
core processing and network maintenance are adequate to support future goals and objectives of the bank
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System OptimizationOutcome
Core system contract negotiation Network outsourcing review and RFP Fully implement electronic document management system Evaluate the mortgage LOS Redesign consumer loan process Evaluate compliance outsourcing opportunities Formalize training program Expand call center performance measures Create documentation standards for report creation Review enhanced security options in core Reevaluate branch profitability strategies and assumptions
and implement analysis of additional delivery channels
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Don’t Forget Alert Systems
BSA optimization … think about fraud- Focused on cash and wires- Sends alerts when there are inconsistent behaviors- Need to optimize or tune the system - Disparate systems looking for fraud in different channels
(card payments, checks, wires, online, ACH) makes it hard to see overall patterns
Fraud systems - Looking more carefully at checks
Both are needed to have a successful program
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WAN/Telecom Assessment
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WAN/Telecom AssessmentSituation
$1.1B bank in the Central US Merging two bank entities each with multiple carriers Issues with connectivity among locations, no ability to
transfer or record calls, as footprint is increasing so are fees
Bandwidth issues throughout network, slowness occurs with many of the locations and outages
Provide management team with a plan to upgrade the phone network, possibly VOIP, consolidate carriers and increase banwidth
Help management develop a cost benefit analysis, risk to organization and timeline
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WAN/Telecom Outcome
Finalized a design to optimize networks and use new wide area network (WAN) technology
Decoupled carrier connections from using one network provider – leveraged best local fiber solution in each market
Introduced new phone line technology – Session Initiation Protocol (SIP) to replace old analog lines and T1s
Built redundant communication lines for voice and data networks
Increased capacity to allow for efficient digital communications - went from 3meg to 100meg between branches
Connected network to backbone of cloud for better connection to Office 365, core provider, etc.
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IT Alignment & Metrics
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Technology Steering Committee
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Why have one?
Technology is the most expensive resource in the organization, outside of human capital
It is the backbone of the organization’s ability to conduct business
Technology safeguards customer information Creates the link between the Executive Management,
Functional Users and IT Aligns the organization’s strategic plan to IT’s plan
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Technology Committee Mission
The financial institution technology steering committee is responsible for overseeing the technology related functions of the financial institution with particular attention to operational risk management. The committee is responsible for setting the information technology strategic direction, recommending information technology policies, procedures and standards; the committee also reviews and recommends priorities for the development of applications and for capital requests; and serves as an information-sharing forum.
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Technology Committee Members
Include representatives from each of the various business units Administration Branch operations Deposit operations Finance Loan operations IT Leaders Mobile banking Marketing
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Corporate Performance Management
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CPM: What Are The Benefits?
Improve decision making. Business executives are provided with in-depth analysis of their business functions as it pertains to their business strategy, enabling them to make smarter decisions, faster.
Raise accountability. Whether your organization is small to mid-sized or at the enterprise level, CPM holds business functions accountable for achieving their long and short term objectives.
Operate more efficiently. Organizations that have adopted a CPM strategy are able to streamline business processes like planning, budgeting, and forecasting.
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CPM
Reduced the time and costs associated with processes Allow for quicker decision making Spent less time collecting data and more analyzing Tied objectives and performance to key performance
indicators Linked compensation to Key Performance Indicators (KPIs) Encouraged and empowered employees to act Delivered the right information to the right people at the right
time
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In Conclusion
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Performance Improvement Focuses on:
TechnologyUsability, integration and adaptability
People Teams, productivityand innovation
ProcessConsistency, accountability and efficiency
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Identifying Common Operational Issues
When these are aligned, process productivity increases dramatically
• Mismatched skill sets• Unclear objectives• Corporate cultural factors• Siloed departments, teams, and individuals
People
• Lack of process definition or documentation• Bottlenecks• Inadequate organizational structure• Manual efforts• Loose internal controls
Process
• Aging or under-utilized systems and tools• Few integrated systems• Reliability of data in systems• Limited performance reporting
Technology
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Continuous Improvement Culture
Optimization never ends Encourage innovation Challenge… “We’ve always done it this way.”
Implement
Evaluate
Ask
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Questions
Discussion? Questions? Other Examples?
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Ron Beck, PrincipalMcGladrey, LLP
Email: [email protected]: 319.360.9104Blog: http://www.mcgladreyconsultingpros.com/blog/
Speaker Information
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