By: Amit Sethia, Head – BFS (GTM & Delivery)| Intelligent Automation (IAT) | Consulting, LTI

It is easy to get enticed by mentions of a 25% increase in productivity, or a 30% reduction in Cost of Quality. However, do operational efficiency programs actually work? According to a poll conducted by the organization awarding the Shingo prize for Operational Excellence, only 20% of such programs deliver concrete results, and only about 2% winners could sustain the results achieved. Process improvement methodologies such as Lean can help you build organizations that will hold the test of time, as long as the approach is systematic and culturally driven.

In this blog, we try to address and correct some of the fallacies that could be clouding your judgement on this subject.

Automation is a silver bullet
It’s proven that automation will magnify the efficiency or inefficiency of a given process. If the Customer Value Proposition (CVP) is not clear, no amount of automation will solve the problem. A case in point – stakeholders of a leading bank were debating automation opportunities. It was observed that there was a conflict of opinion on the process flow. Process maps were outdated and no clear representation of ‘as-Is’ process was available. Naturally, any automation attempts are bound to fail.

To ensure success and ROI, automation should be preceded by optimization of the E2E process lifecycle with Lean / Six Sigma tools such as Value stream mapping, Spaghetti diagrams, Non-Value add (NVA) matrix etc. Also, business owner leads such initiatives and take an end-to-end process lifecycle view, as against tasks managed by specific departments.

Simple will not suffice
The William sisters – legendary tennis players – were once asked what they did when they were not performing well. The answer could surprise many! They shared how they referred to a small piece of paper given to them by their father, which listed basics such as ‘how to hold the racket’. Traditional process improvement approaches such as Lean have always focussed on improving fundamentals, using easy to understand and adopt tools and techniques.

The Kanban approach developed by Toyota uses simple color-coded indicators, understandable by everyone, and used to promote prompt action by the task owner. Similarly, techniques such as ‘Poka-Yoke’ can be used to prevent defects flowing to the downstream processes.

In one of the process efficiency projects done for contact center for a European Bank, we used visual management and Kanban techniques to substantially improve the ability to manage high call volume intervals and improved AHT leading to better SLA management.

It’s all about cost cutting
Truth be told, process improvement programs have been used as a convenient disguise to irrationally reduce headcount. It leads to fear and suspicion among employees and prevents development of a continuous improvement culture. Efficient operational capability should be a Win-Win situation for both – employees and management.

A large multinational bank needed 40 new resources to be hired due to contractual changes in working days. LTI’s Lean Transformation team came up with a unique load-balancing model for the existing team, absorbing the impact without any incremental hiring or need to work additional days. Resources were trained on additional operational processes, which could be done during low volume intervals. Employees immediately opened up to the idea, as this led to a better work life balance and cross skilling opportunities. This is on top of the USD 200,000 savings that were achieved in cost saves, proving to be a mutually beneficial outcome.

One size fit all
It’s been decades since organizations adopted the Toyota framework for process improvement, but with limited success. This is because they blindly deployed the same framework without personalizing it to their own needs. Each organization is unique in terms of process standardization, operations maturity, culture, automation level, logistics, supplier management etc, and hence a customized approach is important.

Customizing and implementing the approach for desired outcomes, is more of an art than a set of rules or best practices. This is why experienced professionals can play a key role in making this transition faster and less painful, provided the change is endorsed by senior management and woven into to the fabric of the organization. To summarize, efficiency programs should be methodological, well thought through, a sound balance of top-down and bottom-up approach, and finally, simple to adopt.

This is the second of the Banking Process Transformation blog series. Please read the first blog here:

• Operations Redefined!

Visit LTI’s Banking & Finance page to find out more about our capabilities in this vertical.