business process mgmt - manor group · sfa prodict lms inv mgmt product b2b ... icici bank - to...
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Business Process Mgmt The key to more efficiency, effectiveness and flexibility
BPM & Banking
Governance
business processes sustainable
improvement
Flexibility, Effectiveness,
Efficiency
Align with business strategy
Budget controls
Regulatory Compliance & Risk Mgmt
BPM & Banking
Outcome of the G20 Finance summit
Strengthening Transparency and Accountability
• The key global accounting standards bodies should work to enhance guidance for valuation of securities, also taking into account the valuation of complex, illiquid products, especially during times of stress.
• Accounting standard setters should significantly advance their work to address weaknesses in accounting and disclosure standards for off-balance sheet vehicles.
• Regulators and accounting standard setters should enhance the required disclosure of complex financial instruments by firms to market participants.
• With a view toward promoting financial stability, the governance of the international accounting standard setting body should be further enhanced
Business Process Management will become a key to
deliver on future regulations setup by the Banking
Regulators
BPM & Banking
Outcome of the G20 Finance summit
Risk Management
• Regulators should develop enhanced guidance to strengthen banks' risk management practices, and should encourage financial firms to reexamine their internal controls and implement strengthened policies for risk management.
• Supervisors should ensure that financial firms develop processes that provide for timely and comprehensive measurement of risk concentrations and large counterparty risk positions across products and geographies.
• Firms should reassess their risk management models to guard against stress and report to supervisors on their efforts.
• The Basel Committee should study the need for and help develop firms' new stress testing models, as appropriate.
• Banks should exercise effective risk management and due diligence over structured products and securitization.
Business Process Management will become a key to
deliver on future regulations setup by the Banking
Regulators
BPM & Banking
Process without BPM
Executive
Management
Customer
Service
Invoice
Reconciliation
Teams
Account
Teams
Account
Administration 1
2
3
4
5
6
1. Informal Tasks and
Communication (ex Paper or
email)
2. Inefficient Working
Environment Spans
Systems
3. Inconsistent Prioritization
4. Inconsistent application of
business rules
5. Lack of Control Over
System and Business
Events (Exceptions)
6. Poor Visibility Into Process
Performance
BPM & Banking
Layer enabling control & visibility: BPM
Executive
Management
Customer
Service
Invoice
Reconciliation
Teams
Account
Teams
Account
Administration
1. Automatically Prioritizes
and Routes Work
2. Guides users through
decisions
3. Standardizes resolution
across geographies
4. Leverages existing
systems and data
5. Monitors for business
events and initiates action
6. Real-time visibility and
process control
BPM & Banking
Strategic value of BPM
Better processes produce lower costs, higher revenues motivated employees
Productivity improvement > 12% per process (Source Gartner)
CIOs place Business Process improvement TOP business priorities *
BPM Benefits
Efficiency
Effectiveness
Agility
* Source Gartner EXP, CIO Insight
BPM is an approach to effectively automate and manage cross-functional processes by
orchestrating and streamlining people and applications using supporting software tools.
BPM & Banking
Example: Process cost (1/3) - Designed model
1 customer treatment (Data Entry, search, calculation and print) represents on average 66.08 seconds.
Per day (8 hours), this represents a maximum of 435.83 customer treatments.
Labor cost / Hour = $37.5. Each day is $300
Transaction cost is therefore $300 / 435.83 = $0.68
BPM & Banking
Example: Process cost (2/3) - Degraded mode
1 customer treatment, with degraded application delivery, represents now on average 119.18 seconds.
Per day, customer treatments is reduced to only 241.65.
NEW transaction cost is = $1.244
No outage --> No SLA impact !
BPM & Banking
Example: Process cost (3/3) - comparison
Due to process time increase, the number of business transaction per day decrease by 60% without any notice and clear visibility.
Over 220 days (1 year), total additional cost per employee is $53’592 ($1.24 - $0.68) x 435) x 220
Process Risk:
Are you aware this is
happening ?
Is the process overloaded ?
Are the systems
adequate ?
Which cost to fix it ?
What part of it is seen as
business lost ?
Should we outsource this
function ?
What is the root cause ?
BPM & Banking
Process management
Questions
real time flow follow up ?
compliance (regulation, Basel II, SoX,...)
bottle neck ?
Risk, points of control, audit ?
capacity mgmt ?
cost ?
root cause problem ?
KPIs ?
BPM & Banking
3 pillars of BPM benefits
Process Agility
Enterprise Infrastructure Services
(Portal, SOA, IDRS, LDAP, EAI, E-mail, IT Operations)
Customer Relationship
Management Field Worker Automation
Program Ops Planning
Benefits & Fraud Detection SCM & Logistics Finance & HR
SFA Prodict LMS
Inv MGMT
B2B product
ERP.
SCM producti
nfo.
MES
DB ERP CRM
BPM models, simulates, executes, manages, monitors, & optimizes those Business Processes.
eCitizen Services
Case/Field Workers
External Orgs.
IT Operations & Logistics
Finance & HR
SFA Product LMS
Inv MGMT
B2B
Enterprise Infrastructure Services
(Portal, SOA, IDRS, LDAP, EAI, E-mail, IT Operations)
product
ERP
SCM product
MES
DB ERP CRM
Organizational Units - process Efficiency
Real-World Business Processes span organizations, systems, and applications.
Eligibility & Intake
Benefits Management
Compliance Pro
ce
ss
es
-
Efe
cti
ve
ne
ss
BPM & Banking
True integration of IT with the business
Infrastructure
Network
Server /
OS
WEB /
Security Business
Application
Database /
Middleware
Telephony
Mainframe
User Service
View
(User Experience)
Production Service View
(Operational Level)
Qualified End to End Service View
Business Process „n“
PP1 PP3 PP4 PP5 PP6 PP7 PP2
Element
Management
Systems
Management
Service
Management
Business
Management KPI KPI KPI KPI KPI KPI KPI KPI KPI KPI KPI KPI KPI KPI KPI KPI KPI KPI KPI KPI KPI KPI
11.1 % 88.9%
SLA Value 98%
:20
%
Major Major Major
SLA achived
Order Processing
99.9999%
BPM & Banking
IT is best measured from a business perspective
BPM & Banking
BPM & Banking
The need for flexible processes and real-time responses is incredibly high in banking
help banks reduce costs and improve staff productivity by automating routine tasks
processes like retail loan processing: greater automation of processes and effective workflow BPM help in reducing the time to process a loan request and tracking the status of each loan application.
Other processes credit approval, overdraft processing, loan and mortgages origination and administration and compliance
Complying with future international banking regulations (G20 Finance Summit)
A key aspect of BPM is that business
processes should be treated as
reusable components.
Basic business processes occur
throughout a bank across its many lines
of business and product sets.
Documenting processes and storing
them within a central business process
repository, positions the bank for
meeting the three goals of BPM: saving
time, saving money, and adding value to
the bank's customers.
BPM & Banking
Examples of banks having adopted BPM
Barclaycard Germany, was able to
reduce processing time of credit card
applications from three days to just 18
minutes.
Credit Suisse – for its private banking
operations
ICICI Bank - to streamline and accelerate
core processes including: account opening
for retail banking and trade finance for
corporate banking
Rabobank of The Netherlands – for
automation projects in payments
processing
Nordea – for inquiry and exception
management in payments processing
BNP Paribas – to accelerate and
streamline existing processes for the
secure transfer of funds an opening up new
clients accounts
BPM & Banking
Summary
business benefits are visible ONLY if Business processes are under control
BPM discipline brings to business
efficiency
effectiveness
agility
BPM: Active tool for Compliance, Control & Risk Management
Banks need to examine their existing processes, define the requirements for current and anticipated BPM applications, optimize technologies and relationships that prevail, and then identify the solution that best meets the requirements
BPM & Banking
Business Process Management Implementation Objectives
Client Service • Create a client-centric business model with focus on client relationship
and customer service • Provide all customer facing staff with all the required information to
deliver client satisfaction Cost • High levels of productivity and efficiency within core processing • Maximise utilization of resources, mitigating headcount pressures • Faster-time to-production for inexperienced new hires • Effective management of different phases of product cycle Control • Elimination of operating errors • Remove inconsistency in service and procedures • Monitoring and reporting of the operation with proactive controls and
escalation • Fully auditable compliance to industry regulation built into processes Capability • Comprehensive and transparent reporting of performance metrics • Enhance staff capabilities and reduce attrition • Enable more effective targeting of spend, benefits quantification • Incentives for process improvement and operating model evolution
Bank and Finance companies process
millions of transactions every day
Customer queries relating to account
information occupy a considerable
amount of staff time because they don't
have ready access to copies of customer
statements. Staff may need to locate
copies of a statement from microfiche or
have them regenerated at the next
computer run.
All this takes time and extends
customer response times
Business Process Mgmt
Manor Group [email protected] www.themanorgroup.net