AIC Limited, a Canadian mutual fund company, launched NCBJ's re-engineering effort early in 2002, shortly after it acquired a majority stake in the company. By the end of that year, NCBJ had implemented a new core banking system. Then by mid-2003 the bank implemented a new interactive voice response call center and started providing a range of financial services over the Web.
Later in 2003, the bank began the critical second phase of the project, consolidating back office systems and processes. While most major financial firms had already done so, NCBJ's branches "were pretty much their own banks," locally administering databases and performing core functions such as preparing and issuing statements. This was "highly inefficient," generating a great deal of overhead and redundancy, noted Courtney Campbell, the company's general manager of retail banking.
By the end of 2004, the bank had trimmed approximately 150 full-time equivalents (FTEs), primarily as a result of centralizing or outsourcing back office tasks. Nevertheless, "we did not feel we were fully leveraging our $52M (U.S.) investment," Campbell reports. "Many branches were complaining
Campbell and his group recognized the need to take a more "scientific approach" to cutting staff and assigning workloads. They also recognized the need to bring in outside help.
After evaluating a number of consulting firms, NCBJ chose Demos Solutions, a Norwell, Mass.-based consulting and software company that has done similar projects with other large banks.
Using StaffSmart, Demos' workforce optimization software suite, Demos consultants performed a time study and analysis of current workloads at two of NCBJ's pilot branches. Using handheld devices they timed daily transactions, such as cashing a check or closing a sale. They used regression models to help determine how much time was taken by nonautomated tasks, such as answering customer queries.
Demos worked with the bank's IT department to implement a series of software connections that automatically gather workload data residing on disparate banking systems and databases.
Once the baseline was established, Demos used a combination of best practices, benchmarking data and expertise garnered from past jobs to create a new branch operating model. The model is designed to "improve wait time, reduce costs and allocate more time for selling," Demos says.
"One of the things we liked about Demos was that our own people were very involved, so they owned the processes that were being implemented," Campbell says. This was especially critical when it came to determining whether the benefits of a new process outweighed the risks.
For example, one type of unnecessary overhead identified by the consulting firm was "too many people reviewing too many tasks," Demos reports. Tellers, for example, always had to get supervisor approval before authorizing an increase in cash limits. By allowing lower-level employees to make such decisions on their own, NCBJ could save valuable managerial time and streamline processes. However, "those changes really do increase your risk exposure," by doing away with high-level supervision, Campbell points out. Before implementing the change, Demos consulted bank personnel to determine if the potential benefits were worth the risk.
The bottom-line benefits
The entire re-engineering project with Demos, including pilots at two branches, companywide rollout and software deployment, took about eight months.
The Demos project enabled NCBJ to reallocate an additional 175 full-time equivalents (FTEs). A 500%-plus ROI is projected over a two-year period, Campbell says. Less easily quantifiable, but at least as important, are the soft benefits the bank is gaining in customer satisfaction and revenue growth, from reallocating FTEs from back office work to service and sales. At least one dedicated salesperson has been added at each branch.
The bank had a record month in loan sales in March, "although we can't attribute that solely" to the workforce optimization effort, Campbell notes.
Another key aspect of the Demos collaboration: bank personnel gained the knowledge, skills and software tools they need to analyze and optimize workforce allocations and processes on an ongoing basis. "We want to create sustainable ROI," Demos says. "Every time you change a process, you run the software to determine the impact on customer service and staff levels."
"We have a much more scientific basis and a tool to assess staff levels at each branch, instead of having to rely on intuition," Campbell agrees. "We are now using a transparent system that everybody has confidence in."
Elisabeth Horwitt is a contributing writer based in Waban, Mass. She can be reached at email@example.com. This was first published in May 2006
This was first published in May 2006