Over the last several months, we’ve focused a lot of attention on managing cost pressures within Operations and identifying opportunities for sustainable cost reduction. Our research has centered around a few principal questions: How can Operations better spend its own money? Where are there opportunities for Operations to better utilize its existing resources and avoid unnecessary costs?

Naturally, the most important resource for firms is people. A recent Council survey shows that, on average, staffing costs generally make up more than half of Operations’ total expenditures. However, executives cite staffing costs as the area of their budget they have least control over – far less so than areas like vendor contracts and L&D (which have much less impact on Operations’ budget!). These findings have generated some interesting discussions for us at the Council. Given the need to ease cost pressures and the lack of control Operations has over staffing costs, how can Operations make better use of its current staff resources?

One solution we’ve focused on recently has been using flex staffing strategies and redistributing workloads across teams to better align capacity to the peaks and valleys in existing work. When Operations is managing high or unpredictable workloads, this prevents understaffed teams from spending additional money for overtime or contractor hours while overstaffed teams let excess staff capacity go to waste.

In our discussions, we’ve found there are two central elements to successful capacity redistribution:

• Creating visibility into workloads across teams. This helps management to identify capacity constraints or excess across teams.
• Finding the overlap of necessary skills and competencies to move work across teams. This helps Operations determine which teams and individuals have the necessary skills to pick up existing work.

Has your firm pursued any strategies to redistribute workflows to better align to team capacities? If so, we would love to hear your experiences and share our insights with you. Contact us at OCResearch@executiveboard.com.

We often hear about how, particularly in times of budget pressure, technology can become a limitation rather than a capability.  Many of our members have to cobble together manual processes to work around older, legacy systems, or systems that don’t speak to each other, diverting capacity toward non value-added activities and hindering the customer experience.

Anecdotally, our members could provide solid reasons why many of those systems should be retired or replaced.  The problem is that in building the business case the focus is often on the expense and risk of implementing a new system, rather than the costs and risks avoided by retiring an old one.  To that end, the Council has created a guide to successful legacy system conversion to help members go from business case to implementation when replacing outdated or redundant technology.

You may download the guide here, or alternatively, listen to a replay of our “Updating Agile Technology Systems” webinar to hear Executive Advisor Scott Rothman walk through the materials.  And as always, if you have any comments or questions on this topic, feel free to reach out to us at OCResearch@executiveboard.com.

In one week we will welcome over 500 individuals representing more than 200 financial services institutions to the 2012 CEB TowerGroup Financial Services Conference in Boston.  This three-day event will give business and technology executives the latest industry insight needed to maintain a competitive advantage. 45 unique sessions including panel discussions and keynotes will cover today’s most pressing topics in the financial services industry, including Social Media, Mobile Payments, Business Analytics, Evolving Regulatory Reform and more.

Attendees will leave the conference equipped with the tools to act with confidence and be decisive in this era of ambiguity. This is your chance to learn from distinguished industry leaders, network with hundreds of Financial Services’ executives and sharpen your business and technology strategy moving forward.

Don’t Wait, This is Your Last Chance to Register!

To learn more visit www.cebtowergroup2012.com

To continue with May’s topic of the month on technology, this week I’d like to discuss one initiative that’s increased significantly in popularity among members in recent years: electronic content management.

In the past weeks, we’ve had the opportunity to speak with several members who are spearheading electronic content management (ECM) initiatives about their challenges and experiences. To date, we’ve come to some interesting findings:

1) Progressive institutions are using an active approach to ECM to enable “smarter” Operations workflow management.

Though many firms began initiatives as part of a general effort to go paperless, progressive firms have realized that a smart ECM strategy goes beyond scanning and e-filing documents. We view this as taking a passive versus active approach to electronic content. A “passive” approach focuses primarily on creating repositories to archive and store documents. In contrast, an “active” approach aims to use and organize the information gained from ECM to better understand your processes and workflows. As one member noted, instead of just “scan to file”, proper electronic management can help you “scan to work”. Read More »

The CEB TowerGroup Conference is quickly approaching and if you haven’t yetregistered, here are three more reasons why you can’t afford to miss this event. This year we have the privilege of hosting leaders from Metlife, CEDAR Document Technologies, mFoundry, HCL Technologies and Paydiant who will lead panel discussions on a variety of topics including technology investments, customer insight, regulatory compliance and mobility. The following is a preview of what you can expect from three of this year’s panel sessions.

Moving Beyond the Transaction: Harnessing Technology Investments to Deliver Improved Customer Interactions: Research Director Scott Rothman will moderate this panel examining the possibilities for harnessing enterprise content and data resources to deliver a differentiated customer experience in both product offerings and service interactions.

Customer Insight and Regulatory Compliance: Senior Research Director Rodney Neslestuen will moderate this panel exploring how different approaches to dealing with customer insight and new regulations can provide significant performance and ROI uplifts and address a range of customer intimacy and regulatory compliance issues

Differentiating via the Mobile Device: A Panel Discussion on Mobility, Payments, and Risk: Research Director Andy Schmidt will moderate this panel discussion focused on ways to mitigate risk in the mobile channel while still providing an enjoyable user experience. Industry experts will share their opinions on the opportunities for banks in the mobile age while also highlighting the challenges in creating differentiation via the mobile device.

Don’t Wait, Register Today!

www.cebtowergroup2012.com ** Follow us on Twitter:  #CEBTG12

As many readers of our blog already know, every month we feature a topic that is a source of discussion among our members. Throughout May we will feature best practices and research surrounding the topic of Technology. Technology, if implemented and utilized successfully, can be crucial improving the efficiency of Operations’ work.

Let’s consider the impact of technology on a challenge many Operations teams face. Call centers struggle to identify and capture informal feedback due to its unstructured nature. This negatively impacts customer continuation rates, the percentage of customers whose business is retained with the firm over time.

A company we call Granville insurances addresses this issue by effectively implementing cloud-based speech analytics software. First Granville chooses a speech analytics package through a rigorous selection criteria including highly accurate speech recognition function, flexibility in adding or changing key words and phrases, as well as minimal resources requirement to implement and maintain the technology.

After selection there are three major components to ensure success in identifying informal feedback and addressing customer dissatisfaction.

• Develop a List of Red-Flag Conversation Attributes - Through existing customer data, recorded calls, and employee insights create a list of attributes that signal dissatisfaction. It is crucial to continuously maintain and fine tune this list for effective identification of red flag conversations.
• Routing Red-Flag Conversation to Dialer Queue – Once a conversation is red flagged, it is converted into a text document. It is important to ensure that the conversation is correctly routed to the outbound dialer queue of a dedicated service specialist.
• Reaching out to Customers – Call backs should occur one hour to three days after the initial call. Every attempt should be made to resolve the issue on the spot. If the issue cannot be resolved immediately then clear steps to resolve the issue should be explained to the customer.

Learn more about Granville Insurance’s implementation of speech analytics software.

Members often ask me what the five most important metrics are to track in our industry.  Usually members expect a very clear cut answer like: “unit cost, average handle time, time to first decision, abandon rates and NPS.”  Unfortunately the answer is not that straightforward as these five measures are often used to stand for a variety of goals or concepts that every Operations executive should be striving for.  This topic will be one of the key topics covered by the Operations Council team at our Financial Services Conference in Boston later this month.

If Operations’ mission is to ensure the firm is delivering the optimal level of service at the lowest cost, then there are really only four things Operations executives should be measuring: cost efficiency, quality, productivity and risk.  Additionally, tracking the drivers for these key areas helps executives know how to take action should any of these variables begin to deteriorate.  For instance, employee engagement and work volumes affect productivity.  Timeliness of delivery and errors rates affect quality… And of course, the way you measure these things in each part of Operations also differs.  Average handle time is a call center cost measure.  Time to first decision is a quality measure in the credit world… and so on and so forth. To further complicate things, what you measure is probably not as important as what you measure yourself against.  Most members have standards for their key performance indicators, whether these are employee-level, process-level or customer-level standards, but many of them confess to being unclear on the source of the standard or to having set the standard based on previous year performance.  The problem with this approach is that setting standards that are too low and setting standards that are too high both have a detrimental impact on Operations’ cost efficiency.  On the one hand setting standards that are too low for key customer metrics such as speed of delivery puts revenue at risk, affecting efficiency.  On the other hand setting standards that are too high increases costs without improving revenue gains – also affecting efficiency. To help our members solve this problem we’ve focused a number of resources toward documenting solutions to common performance measurement challenges Operations executives face.  You’ll find a couple below:

1) If you’d like to have the opportunity to network with peers around the topic of standards for our industry, please join us at our live event “Using Standards, Not Processes, To Create Efficiency” to be held in Boston on May 23rd.

2) If you’d rather learn how to create an effective Operations dashboard in an interactive virtual format, join us for our May 31st Interactive Workshop on Best-in-Class Dashboards (June 1st for Asia Pacific members).

Every quarter we publish a Business Barometer report on financial services executives’ expectations on revenue growth and cost pressures.  In the first quarter of 2012, executive sentiment regarding revenues in the coming year improved compared to the last quarter, while expectations regarding cost pressures in the next 12 months remained similar.

In addition, we had some other interesting findings looking ahead to 2012:

• Across financial services, executives expect relatively better operating margins in 2012. Sixty three percent of executives expect their company’s revenue to increase in the next 12 months, with 40% anticipating somewhat higher revenues. However, 67% of executives expect cost pressures to increase.

• Compared to the previous quarter, more financial services executives expect sales to decline or remain steady. Executives expect sales will only somewhat increase in the following 12 months. During the same time period, investments are expected to flatten or increase somewhat.  Almost half of respondents (46%) project research and development expenditures will remain unchanged.

• Throughout 2012, financial services executives anticipate the same or lower headcount, the same or higher hiring volumes, and higher labor costs. Almost three-fourths (72%) of executives expect to maintain or reduce their companies’ staff. Furthermore, 68% expect increased labor costs. A higher proportion of executives anticipating a rise in labor costs is potentially indicative of higher compensation and benefits. Read More »

To continue with this month’s topic, Managing Operations Talent, this week we are focusing on talent development. Last week we discussed the key role middle managers play in improving employee performance and retention. This week we focus on one company’s comprehensive approach to understanding their current talent pool and opportunities for growth.

A company we call Alexandria Capital discovered that they focused development on top-performing talent yet overlooked opportunities to develop managers. To address these challenges, Alexandria Capital implemented a comprehensive talent development system to broaden career offerings and develop the right mix of talent to sustain long-term growth.

Alexandria Capital’s talent development system is composed of three main components.

1. First, executives participate in talent mapping sessions at least three times a year to discuss people issues, talent development planning and succession planning. This is an opportunity for the firm’s leadership to map out plans to develop the next generation of leaders. Read More »

We are only weeks away from one of the premier events in the financial services industry, the 2012 CEB TowerGroup Conference. After a sold-out event in London, anticipation is growing for the upcoming Boston event.  If you still have haven’t registered, here are the top five reasons you and your organization can’t afford to miss this opportunity!

Gain the Confidence to be Decisive in an Era of Ambiguity

• In these periods of economic unrest, executives and their teams need the resolve to take immediate action – the conference can provide you the tools to get there.

Preview Exclusive CEB TowerGroup Research

• In over 45 unique content sessions we will provide critical insights on today’s most pressing trends including mobile payments, social media, regulatory reform, business analytics, and risk management.

Learn from Distinguished Industry Leaders

• Hear from leaders at Citi, PNC, and State Street as they provide expertise on leadership, innovation and key trends transforming the industry.

Network with Hundreds of Financial Services Executives

• Connect with peers during cocktail receptions, the after-party, and unstructured time between sessions.  You can also leverage our new mobile site to network virtually before, during and after the event.

Understand the Expanded Role of Technology

• Our partnership with technology providers will offer a unique and valuable backdrop in examining the major part that technology plays in the evolution of the market.

Don’t Wait, Register Today!

www.cebtowergroup2012.com ** Follow us on Twitter:  #CEBTG12