We have chosen to publish some business experiences which may be of interest to our readers. For confidentiality reasons, all references to actual clients have been removed. In addition, this is the private property of The Process Works and therefore may only be used in its original form and with reference to its original source.

• Credit Granting Services
• In house Legal Services
• Asset Management in Libraries
• Collaboration Services and Knowledge Management
• Claims Services

Credit Granting Services

The Process Works has worked with a number of large financial services institutions in the re-design of credit granting services with a view to:

• Improving credit control  
• Improvong the quality of business taken up 
• Imporving process efficiency
• Improving customer satisfaction to a point of becoming first choice lender
• Creating a learning environment for “learner” credit controllers without increasing risk or reducing process efficiency

 A number of important lessons have been learned from the consulting opportunities in which we have participated. These are summarised below.

 Holistic Approach

Many of the credit granting services under consideration proved to be the product of ad hoc change rather than the result of holistic consideration. They had evolved rather than been purposefully designed. Problem resolution was piecemeal and process, people (roles), structures (working relationships) and technology had been adjusted independently of one another. The result was a patchwork rather than an engineered end product. Failure to holistically consider all related factors, in every case had led to sub-optimal performance.    

Impact of Automated Workflow

In some instances automated workflow had been introduced, at significant cost and loss of productivity, particularly during early implementation. In no situation did the productivity rise to pre-workflow levels. The reason for this was that in every case, the workflow had been introduced to support existing processes, structures and roles. Little consideration had been given to the possibilities that new technology could raise and the implications in terms of changes to processes, structures and roles. Further, the flexibility inherent in manual processes had been lost as technology will not readily permit people to change roles and undertake new activities when problems arise. In short, the new technology had literally “cast in concrete” sub-optimal processes, roles and structures and post implementation productivity reflected this.    

Separation of Customer Facing, Factory and Support Activities

Generally the financial services institutions concerned had failed to grasp the importance of separating consumer/partner processes, factory processes and support processes. Such separation demands inter-dependent but distinct structures populated with roles and staff appropriate to a particular focus (customer/factory/support). The result was staff having to be “all things to all people”. Productivity was generally low, staff were suffering high levels of stress, staff turnover was high and the quality of credit decisions variable.

Consumer/partner facing processes require relationship building and retention skills. People deployed here must have a customer orientation. Clients also require continuity in their relationship with credit granting services. Either team-based structures are required which generally provide backup in the absence of a person playing a client relationship role, or alternatively technology needs to be able to provide high quality, fast access to client information which allows greater pooling of resources.

In contrast factory processes are just that. They must avoid interruption from customers and staff need to have a production orientation, with some capacity for repetition. Production processes benefit from a high degree of automation.

Support processes are generally less urgent than either factory or customer facing processes. They often require periods without interruption, e.g. to resolve a problem, search for missing documentation or give an opinion. They are important rather than urgent. However, if they become entangled with the urgent – they rarely get attended to. Analysing the root causes of poor credit rating decisions would represent a typical support process, as would compiling important credit performance information. They clearly have an important impact on performance and improvement      

Avoiding Channel Hop

This is yet a further example of how structure can shape behaviour. Poor structures can result in undesirable behaviour such as channel hopping.

Some of the clients had created complete credit granting service structures for each client segment. In addition, in an attempt at greater client orientation, these services had been placed within Sales/Marketing structures within their businesses. These decisions had the effect of:

•  As they were generally more senior, placing credit controllers in charge of  the full service for a segment
• Diluting the focus of credit controllers, as they had to ensure the delivery of all aspects of credit services, much of which is administrative
• Reducing the quality of credit decision-making as credit controllers were no longer a cohesive unit and therefore unable to share learnings and mentor new entrants
• Creating undue levels of stress among credit controllers, resulting in commensurately high turnover
• Reducing staff morale, as credit controllers were recruited for their attention to detail and not the management of administrators and development of client relationships
• Reducing client satisfaction
• Encouraging clients to hop to another credit service team if they did not receive the credit decision they wanted

 Credit decision-making is a factory process and therefore needs to be isolated from client interference. Further, it benefits from a production focus, with attention on continuously improving decision-making and learning from past experiences. Team structures work well for this type of process and support learning and mentoring for entry level credit decision-makers. Credit decision-makers are comfortable with other like experts – their affiliative preferences are well accommodated in a team situation.  

Separation of Specialist and Generalist Activities

Making the most of expensive, specialist resources is critical to service efficiency and effectiveness. Spreading credit decision-makers thinly (1 per client segment), increases the risk of bottlenecks significantly. The absence of a credit decision-maker creates the potential for a bottleneck for an entire customer segment. Given the way in which businesses measure and reward performance, it is unlikely that a credit decision-maker from another customer segment will make the required contribution to fulfil a colleague’s responsibilities.

On this basis it makes sense rather to pool specialist resources and make the resources in the pool available to administrators and customer service staff on the basis of, but not limited to:

• First come first served – next free decision-maker or next free decision-maker with the required skills/knowledge to make the decision
• Last come first served (based on client importance) – next free decision-maker or next free decision-maker with the required skills/knowledge to make the decision   

Education of Senior Management

It was evident that many of the senior management in the businesses engaged, had had limited exposure to process and organisation design practices, except these were learnt on the job. This is not surprising in that this is considered the domain of management consultancies, who take considerable pains to protect this space.

Universities and Business Schools have also failed to offer practical skills development in these areas. The result is that even when a deficiency is recognised, addressing it is not a trivial task. The Process Works has therefore undertaken to develop training material in both process and organisation design. However, taking a horse to water is one matter and making it drink, another. Senior business executives appeared to still rely on management consultants than acquire and deploy these new skills themselves.

See the Bigger Picture

It is important to understand the bigger business context within which a service (credit granting) is delivered. Such a service is delivered to customers in collaboration with but not subservient to Sales and Marketing activities.

Referring to Michael Porter’s value models (value chain, value network and value shop), Banks and Insurance companies are invariably Value Chains evolving into Value Networks. Sales and Marketing activities fall under “Sales and Marketing” and Credit Granting activities fall under “Operations”. Structures supporting these two domains would generally need to be inter-dependent but distinct, as they are reflected in the value models.

In conclusion, not only are structures internal to a service important, but the greater structures within which they fit are equally important to successful service outcome and satisfactory service performance.

In-House Legal Services

Asset Management in Libraries

The Process Works has been commissioned by a number of national, provincial and academic Libraries, to:

• Improve return on investment in information resources
• To identify alternative service models
• To conceptualise new "value added" services and improve service delivery

A number of important lessons have been learned from the assignments undertaken, particularly in regard to investment in and management of information resources (information assets). These are summarised below.

1. Nomenclature

Libraries are more comfortable (understandably) with traditional library terms. In the case of information resources, this means referring to books, journals, artefacts, electronic resources, manuscripts and a host of other media or formats. In many cases whilst they are understood as Library assets - they are not referred to as such. In consequence, the traditional disciplines associated with asset management are not entrenched in conscious thinking. These include:

• Planned preventive, corrective and re-constructive/preservation maintenance
• Planned obsolescence and replacement
• Measuring and managing return on assets
• Asset profiling (taxonomic class, age, usage, format, supplier, consumer segments...) and shaping the asset base (procuring, exchange, weeding, retiring, selling, donating) to ensure alignment with a target profile, defined by end consumer and institutional requirements

2. Budgeting for Information Resources

Budgeting for future acquisition of information resources is often treated as a form of internal competition among Information Specialists in which one Specialist's (one specialisation's) gain is another's loss. In reality budgeting should be a collaborative activity among information specialists to minimise the gap between the target and actual profile of the asset base. It should also be "zero based", i.e. we spend only what we need to rather than we need x% more than last year to preserve the relative value of our asset base.

3. Return on Investment

Acquisition and deployment of information assets has a significant cost overhead. The cost of indexing/describing, housing, maintenance, insurance, provision of secure access and recognition for donors, needs to be taken into account when making an acquisition decision as they significantly inflate the actual purchasing cost. The full cost of information assets should then form the basis for assessing return on investment. Important indicators of return on investment include:

• Value of non-working information assets and the cost of housing them
• "Turn" of information assets - how often they are requested
• Gap between the target profile of information assets and the actual profile based on request patterns

Strategies for realigning asset profiles can then be debated on the basis of hard facts rather than personal preferences or emotions. Strategies for realignment must include but are not limited to:

• Divestment (donating, selling, disposal)
• Sharing
• Swapping
• Searching for alternative sources of funding for new acquisitions or sponsorship
• Move to e-resources

4. Decibel Auction

Deciding on what new information assets are to be acquired each year can be likened to a "decibel auction", i.e. he who shouts loudest gets his way. Pressure may be brought to bear by a senior employee of the library, an important professor within a faculty, an important donor or senior government official. Libraries are strongly advised to:

• Formalise the process of defining the desired asset profile
• Determine the gap between desired and actual profile
• Make annual asset purchases which have maximum impact on closing gaps
• Make the process public so that vested interests cannot prevail
• Have Internal Audit evaluate and report on the process

5. Separation of Duties

In smaller libraries the same person may make asset acquisition decisions, place orders and take delivery. Where size permits the following separation of duties is highly recommended:

• Acquisition decision based on subject, format, maximum cost and timing. Typically undertaken by an information specialist.
• Procurement decision based on value of services delivered, supplier relationship, supplier profile, value (as opposed to cost) and supplier performance. Typically undertaken by a procurement specialist.

This minimises the potential for collusion between suppliers and decision-makers. Information specialists are measured according to the quality of the information asset profile whilst procurement specialists are measured according to the value and efficiency of services delivered. Procurement specialists cannot place orders for information assets other than those prescribed by information specialists thus a near perfect set of checks and balances exist here.

6. Distributed vs Centralised Assets

An important characteristic of a target information asset profile is the distribution of assets. Libraries which don't consider what resources are being requested from where, generally end up with arbitrary stocks of information assets, much too-ing and fro-ing of resources between sites/branches and very dissatisfied customers.

The library service model should determine the type and geographical extent of services to be delivered. The information asset profile, supported by the history of request patterns (and cost of ad hoc transfers) should then determine the distribution of information assets across library sites/branches.

7. Role of Collaboration in Information Resource Management

Information resources are often treated as the personal property of libraries and librarians and of key stakeholders. Rather, they belong to the institutions employing such people, primarily for the use of clients/consumers/patrons. Through a collaborative approach to information asset management, it is possible for such institutions to borrow, swap or donate information resources at a significantly lower cost than storing obsolete resources and replacing them with new/alternative ones. Once libraries understand they are a part of an information resources network, the creative mining of the network can significantly reduce information resource costs.

Collaboration Services and Knowledge Management

Claims Services