The defining moment of America’s rise to economic greatness was not the invention of the Cabbage Patch doll or the iPod. It was the automation of the manufacturing process. Mass, standardized production through assembly lines and robotics was a complete paradigm shift from turn-of-the-century skilled craftsmen building each widget from start to finish, one at a time.
Here’s some good news for banks looking for earnings relief in today’s margin-squeezed economic environment. Workflow technologies can do for banks what mass production did for industrialization. Here’s some bad news: most bankers have not dug deep enough into workflow tools to realize their potential.
Relying on overdraft protection customers and debit cards to shoulder the earnings burden has enabled bankers to avoid the harder job of identifying and eliminating wasteful, resource-consuming processes. What has kept banks from taking the path to increased performance? With workflow tools available that can streamline processes and manage performance, there’s no excuse for banks not to be operating at peak efficiency.
The Tale of Two BPMs
Workflow is a programmed series of automated steps that route information and/or documents to various users in the bank. These automated steps are typically rules-based and conform to the bank’s unique business needs and policies. Think about TurboTax as a simple, rules-based software that turns us all into tax experts.
Two workflow concepts should be adopted as the new mantra for all GonzoBankers cubed inside windowless bunkers:
The implementation of workflow technologies is the foundation of business process management. Measuring the effect of implemented workflow is a key aspect of business performance management.
Many of you GonzoBankers have a “hidden gem” of workflow potential already in your organizations. A number of banks have successfully implemented workflow technologies inherent in popular imaging or enterprise content management (ECM) packages. The core vendors and lots of others have workflow engines that bolt right on to an institution’s intranet. Banks running one of Fiserv’s core processing systems likely have Hyland’s OnBase installed for document imaging/ECM. Jack Henry shops are probably using Profit Stars’ Synergy ECM solution. Yes, there are other core providers with document imaging but their workflow engines are missing or lacking. And because not all workflow improvement gains are tied to document handling, good workflow engines allow for non-imaged document events to kickoff workflows.
The main issue with workflow today is not technology, it’s that banks shortchange the talent, resources and focus necessary to generate wins with the workflow tools. In addition to the technology investment, banks need to invest in the Gonzo business analysts that can utilize these workflow engines to re-engineer bank processes and obtain buy-in from cranky, hard to please users of the process. Mapping current business processes, defining decision points, and re-engineering the processes is only half of the job for the business analyst.
As with any organizational change project – and implementing a workflow engine is definitely a change project – resistance can be expected. And unlike the Borgs of Star Trek, resistance is not futile. It will crater the project faster than a pack of dogs on a three legged cat. The business analyst must obtain that elusive “buy-in” to overcome resistance. Buy-in is so difficult during workflow implementation because most banks do not have strong performance metrics to guide the project. For every activity that can be “workflowed,” there is currently a manual process in place to complete it. Often these manual processes are not measured for quantity, turnaround time or error-rates/quality. The measurement of performance for a process could be one of these three metrics, and a performance improvement goal might be to increase quantity per day by 25%, or reduce turnaround time by 30%, or decrease errors by 85%. Without these goals, how will you know if the project is successful?
Some of the benefits of using a workflow engine to automate processes are:
Making certain input required
An automated workflow needs input to begin. This input can be a document image or just simply data.
Example: Tom, a CSR, requests to rebate an NSF charge that requires approval from his branch manager, Susan. The required data is the account number, the date of the fee, the amount to be rebated, and the reason for the rebate (required for performance management, not process execution).
In the old days, Tom might draft an email, send it to Susan and ask her to approve and forward to the Deposit Services email group. In the really old days, Tom printed a form and had Susan sign it and route/fax it. Either way, the information on the form could be incomplete. By using a workflow engine, Tom cannot submit the request until all data is entered.
Authenticating participants and routing the request to the correct skill set
One of the more difficult workflow implementation tasks is mapping the Human Resources database into the workflow tool so that the pre-programmed business rule decision points know where to route work. The hierarchy, job functions and authorities may not always be evident from a payroll system dump. But getting your bank’s personnel and skill sets into the workflow engine can be done and automated. 
Example: Based on the network sign-on credentials of the rebate requestor, the workflow tool knows which work queue to send the request to. When Susan gets the email that a work item is in queue, she can either approve or deny the request. The approved request then shows up in Jamie’s work queue since she is the deposit operations account maintenance clerk.
Time-stamping touches and reporting on metrics
Each activity is automatically time-stamped in the workflow database. A dashboard of incomplete work items can show backlogs in real-time. Items that have exceeded a threshold can pinpoint other issues. Productivity and performance can be measured at the request and employee level.
Example:
I
n the month of October:
Workflow implementation success points
The key to beginning a long-term, bank-wide workflow improvement project is to get an early win. If you think the commercial loan approval process should be your first workflow improvement process, suit up! I’d recommend something not quite as combustible.
Did I mention setting performance benchmarks aggressively and documenting/communicating the results?
If organic growth is going to be as difficult in the future as we all expect, then the growth will come through acquisitions. What better way to drive the operating expense out of the merger target than to absorb the workload without increasing staff? Or maybe you want to be the operating expense that gets driven out? It’s your choice. But if it were me, I’d be pushing workflow like funnel cakes at the state fair.Every organization has policies that don’t make sense, systems that don’t interface, and paper forms that shouldn’t exist.
Cornerstone Advisors provides the experience, methodology and leadership to tackle your company’s greatest process challenges. To make tangible process improvements, we provide a focused team to work with key individuals in your institution.
Our fast-track approach can bring process improvement results in as little as 60 days. In addition, Cornerstone can provide training and tools to enable process improvements to continue with your internal resources.
Contact us today to get started on a fast-track to efficiency.