Integrating Six Sigma with an Enterprise-Wide Process Improvement Strategy Global Lean, Six Sigma and Business Improvement Summit October 15, 2008 Presented by: Enterprise Business Process Services Jerry L. Calvert, SVP Lean Six Sigma Master black Belt
(1) Source: SNL Financial. Growth projections are based on the weighted average of MSAs and counties not in any MSA in which the bank is located. Based on current footprint. SunTrust enjoys a strong market position in some of the highest-growth markets in the United States. Overview
Total Assets $177 Billion
Total Deposits $119 Billion
Banking Locations 1699
2006-2011 Projected Weighted Average Population Growth (1)
SunTrust’s retail line of business provides financial solutions to five million client households as well as businesses with annual sales of up to $5 million.
SunTrust’s commercial banking line of business serves companies, government, and nonprofit entities with
annual sales or budgets from $5 million to $250 million, delivering financing, treasury management, and access to the capital markets to more than 50,000 clients
Corporate and Investment Banking
SunTrust’s Corporate and Investment Banking line of business (CIB) provides capital raising, treasury management, and other tailored financial solutions.
January 2007, SunTrust’s mortgage servicing portfolio was $130 billion. SunTrust Mortgage, Inc. originates loans at more than 180 locations in SunTrust markets and adjacent states, maintains correspondent and broker relationships in 48 states.
Wealth and Investment Management
As of Jan 2007, SunTrust had total assets under advisement of approximately $245.8 billion, including approximately $207.1 billion in trust assets, and approximately $38.7 billion in retail brokerage assets
Enterprise Business Process Services Mission SunTrust Mission Help people and institutions prosper Enterprise Business Process Services Mission Help SunTrust and our clients prosper by improving business processes to create a more efficient enterprise and make it easier for clients to do business with us Overview
EBPS partners with LOBS and Functions on a wide variety of opportunities ranging from large scale transformational initiatives to small-scale process problem resolution. Roles Services
Metrics Development and Deployment
Process Improvement Training
Business Process Improvement
EBPS staff can be called upon to play any of these roles. Overview
The Current Environment has Forced us to Re-Focus our Approaches
The past three years have been unprecedented in the amount of change in the banking industry. The mortgage industry collapse along with the tightening of credit in general has put extreme pressure on banks to become more efficient, expand delivery channels and stem customer attrition.
This sense of urgency has forced us to look at projects that are more “quick wins” and that require little to no technology spend. Projects that will increase deposits, reduce losses and measurably increase customer satisfaction are the top priority.
Methodical, Structured Problem Solving – Let the Problem Dictate the Approach Though we frequently need a more radical deconstruct/reconstruct process to identify root-causes using Six Sigma, there are times we just need to refine and make small improvements as with Lean. At times it may be a technological overhaul using imaging and automated workflow as with BPM
What is the problem?
That’s where the techniques begin...
The various process improvement techniques all have the same aim and similarities:
They are methodical ways of addressing issues
They are used to identify and solve problems
Tools & Techniques You can have many tools in a tool box, let the project determine which tool you will use.
BPI Methodology Built on the DMAIC Framework Tools & Techniques
Robust BPI Methodology Built on Share-Point Tools & Techniques
Project Approach Key Deliverables EBPS Process Improvement Methodology Key Activities Timing Assess Current State Design Optimized Future State Develop Business Case & Roadmap
Understand key account opening processes
Document existing practices for resolving problems
Interviews with key stakeholders for input and feedback
Map current-state processes including tasks, technologies, people, channels, etc.
Identify root causes for most common service problems
Meet with Stakeholders and establish scope of project
Develop working teams and roles and responsibilities
Define key elements of account opening and service issues
Identify critical touch points
Understand key employee touch points
Project team structure and timelines
Target customer experience around account opening
Defined scope document and revised timeline
Project Charter & Project Plan
Key employee linkages
Preliminary understanding of current state
Baseline of most common issues/problems
End-to-End process models/SIPOC
Process Narratives describing tasks, inputs/outputs, etc.
Assess Value vs. Non Value
Weeks 2-9 Weeks 7-14 Weeks 14-18
Gaps and Issues
Future-state process flows with “best practices”
Service level assessment
Future state SLA’s
Detailed improvement opportunities
Business case summary outlining costs and benefits
Additional quick-win opportunities
Final improvement results
High level roadmap
Identify reasons for gaps including, but not limited to: products, technology, processes, training
Develop strawman of future-state processes for key functional areas
Provide final metrics results showing performance improvement opportunities
Assess impact on current service levels.
Identify opportunities to create the desired experience, including improvements in service and delivery requirements
Evaluate technology improvement opportunities
Provide technology solutions for optimizing the Account Opening process
Plan and Launch the Project Control Improve & Implement Analyze Measure Define Tools & Techniques
RIP’s (Kaizens) are Structured Events with Deliverables and Tools Sequenced at each Stage Tools & Techniques
Rapid Improvement Process One-Week Schedule Tools & Techniques
Facilitated Work Shops Accelerate Speed and Ownership
A facilitated workshop is a team-based information gathering and decision making technique to accelerate business planning and problem solving .
Quality of Decision Making
Enables the rapid exchange of information
Involves key individuals
This approach has had tremendous success
Tools & Techniques
Metrics are Presented in a Cascading Fashion Based On Appropriate Level of Detail and Need Metrics Cascade Metrics & Measurements 1 2 3 Detail : Data presented in great deal for use by area in question, often shown over time and used after initial review for research, etc. Presented often as large numbers of data points which have to be followed visually to determine trends, etc. Dashboard: Data turned into visual information through use of charts and trend lines presented over time which demonstrate trends, spikes, seasonal movement, etc. Accompanying detail of data in charts is presented if preferred Scorecard: Monthly snapshots presenting high-level performance indicators and ratings along with limited data points Need Fulfilled: Performance Tracking Rankings Need Fulfilled: Information Trends Details Need Fulfilled: Data Details
Training is Critical to Sustaining Successful Change Basic BPI, Six Sigma Green Belt and Lean Practitioner Training and Certification have been very Successful! Facilitation Skills and Black Belt Certification Are in development now. Training
Research still supports the claim that over 50% of process improvements initiatives are not successful. By understanding the problem and selecting the right approach we will greatly enhance our probability of being successful.
The Six Sigma methodology is the foundation of our improvement program but only one of several approaches we take to solve a problem.
“ If the only tool you have is a hammer, you tend to see every problem as a nail”.
Wealth and Investment Management Group SunTrust Investment Services Client Account Opening Using Lean & Six Sigma to Drive Straight-Through Processing Enterprise Business Process Services Jerry L. Calvert , SVP Lean Six Sigma Master Black Belt
Project Focus Focus is the end-to-end SunTrust Investment Services Account Opening Process with emphasis on streamlining the account opening process in order to process a straight-through transaction automatically from beginning to end with minimal manual intervention. We must also improve the client experience by reducing errors and process inefficiencies by eliminating non-value-added steps and therefore making it easier to do business with SunTrust. Overview
Current State - Initial Findings Current State
Review organization / business models
Document existing practices
End-to-end Process Mapping
Conduct work sessions with each functional area
Map current state processes
Conduct follow-up validation sessions
Document Key Findings
Baseline gaps and issues
Identify root causes
Conduct metrics analysis
Redundant process handoffs
Inconsistent training process
Tedious manual processing
Quality inefficiencies (up to 20% NIGO)
Lack of end-to-end visibility and metrics
Complex policies and procedures
Based on initial findings, the following gaps were identified: A detailed Current State assessment was conducted for the STIS Account Opening process focusing on organizational structure, processes and procedures, technology, and quality.
“ When a client opens multiple accounts – it takes forever when opening through Streetscape because you have to reenter all of their information…”
With an integrated contact management solution, “…every account entered would automatically merge into the contact system.”
We need to “…improve the systems and consolidate the paperwork. The name, address, birthdate, SSN, etc., should only have to be recorded once.”
An automated workflow system would “…track pipeline, marketing activities, reviews and opportunities all from one site.”
“… we do not embrace technology to the point that it would make a significant increase in production. I am concerned that this will become a retention issue for reps and clients.”
Current State - Metrics Analysis *Based on Quality Sampling 8/15/06 - 8/28/06 (10 business days) for Annuities, Brokerage/IRA, Managed Accounts, and TOA. A two-week in-depth quality assessment was conducted within Richmond Operations for incoming documents and applications*. The results illustrate… NIGOs by Product Current State … and NIGOs by both Product and Region Annuities Transfer of Assets (TOA) Brokerage/ / IRA NIGO Ratio by Applications Total NIGOs by Region and Process Area For this two-week period, 3,553 applications were received Not In Good Order (NIGO), representing an 20% error rate and a process sigma of 2.4 . This error rate has a negative implication on the client’s experience with SunTrust. Year-to-date only 41% of new accounts were opened via Streetscape.
Current State - Metrics Analysis Current State Using discrete data sets, Pareto Chart analysis was used to determine the most common error types by transactions. This was one of the indicators for areas of focus and improvement opportunities.
Current State - Metrics Analysis The P-Chart was utilized to determine if the proportion of NIGOs for each day sampled is in control. Factors contributing to process variation are causing data points to fall outside of the process control limits. Current State 401 91 8/28/06 10 399 59 8/25/06 9 326 53 8/24/06 8 477 72 8/23/06 7 405 93 8/22/06 6 331 54 8/21/06 5 258 42 8/18/06 4 373 53 8/17/06 3 369 67 8/16/06 2 214 44 8/15/06 1 Total NIGO Date Sample
Future State Approach Model A Closer Look – Approach Model
Process Organization Quality
Provides a shared vision for the organization and serves as a critical foundation for the transition and future improvements Future State A comprehensive approach model utilizing Lean and Six Sigma techniques was utilized to ensure improvement efforts are aligned, integrated and balanced to enable optimal business performance.
Technology Culture and Behavior Strategy and Structure Process Organization Design Human Capital Aligns Enables Drives Inspires Drives Enables and Limits Supports Facilitates Inspires Inspires Shapes Technology Approach Model
Design Integrated End-to-end Future State Processes
Conduct future state work sessions with each functional area
Research financial services and banking industry best practices
Highlight potential non-value-added process steps
Review related technology projects and business initiatives
Complete Future State Design
Develop future state process blueprint
Document improvement opportunities
Calculate metrics benefits
Identify quick win opportunities
Initiate roadmap development
Future State Future State Improvement Opportunities 1
Common systems and tools, LOB-wide
Single point of access for STIS client data and client financials, with 360 degree view
Elimination of redundant tedious data entry, thus saving time, reducing errors, and increasing efficiency
Ability to save and later reference work in regards to a client or a prospect
Free up Financial Advisor’s time to better focus on Client and prospecting
Integrated Systems Future State Design of the STIS Account Opening Future State was an iterative process that incorporated SunTrust internal discussion feedback, detailed metrics analysis, and banking industry best practices. As with Current State, primary focus centered on organizational structure, processes and procedures, technology , and quality . Future State
Future State Approach Model The Future State Design will provide a practical blueprint for addressing the key improvement opportunities identified from the Current State Assessment. Operational Inefficiencies
Redundant process handoffs
Quality inefficiencies (up to 20% NIGO)
Tedious manual processes resulting in higher costs
Too much paperwork
Missed Front Office Opportunities
Tools and technologies that do not fully promote stronger client relationships
Increased processing time that results in fewer client referrals, reduced client trust, and higher costs
Future State Current State (Broken processes & silos of work) We need to all be pulling together on this!
Future State Process Blueprint Integrated Systems for client data and client financials 1 2 Streamlined Account Setup for opening new accounts Document Imaging at point of receipt 3 4 Automated Workflow with electronic routing of tasks and documents 5 Case Management with end-to-end view, alerts, and reporting The Integrated Future State process illustrates the end-to-end, cross-department activities and highlights five key areas of improvement. Future State
Integrated Systems Integrated systems for client data and client financials 1
Key Attributes :
LOB-wide Contact Manager
Contact Manager integrated with other front-end applications, CIS, Financial Planning Tool, and STIS Account Opening Process
Common systems and tools, LOB-wide
Single point of access for STIS client data and financials
Elimination of redundant tedious data entry
Increase efficiency and reduce errors
Ability to save and later reference that information
Free up Financial Advisor’s time to better focus on Client and prospecting
Robust Case Management Tool for monitoring, tracking, and escalating action items, tasks, and issues
Alerts and Effective Reporting
Integrated document management
End-to-end view for Financial Advisors, Sales Assistants, Management, Compliance, and Operations.
Effective reporting and metrics, driving towards better business decisions, rewards, and coaching
Allow Financial Advisor to focus on building business and fostering client relationships
Increase efficiency of Financial Advisors and all support groups
5 Case management with end-to-end view, alerts, and reporting Future State End-to-end view
Future State Benefit Analysis Brokerage/IRA Accounts with ACAT Funding Future State: Source of Benefits Account Setup& Funding -Integrated Contact Management System will require less manual client data entry and reduce Initial Client Setup time for account opening by up to 75%. -Document and Data control will significantly reduce NIGOs, rework and delays. -Accountability for documents is owned by front office. Mailing -Integrated Document Management and Imaging System will enable applications to be imaged and indexed at the point of capture and eliminate 2 days of interoffice mail transportation time and reduce overnight mail expense. Imaging -Having documents imaged at the point of entry, will significantly reduce labor costs in middle office for imaging purposes and delay in process. Account Processing -An integrated workflow system will provide document control thus reducing the NIGO rate and rework in Richmond Ops. Potential 77% Reduction in Overall Processing Time Future State Note: This is actual processing time versus elapsed time for actual receipt of funding and assumes all paperwork is completed at the time of application. Notes: -Account setup usually involves more than one account per relationship. -Imaging includes time spent in queue. -Imaging capability will allow STIS to transmit images electronically to NFS thus eliminating mail time and reducing their SLA from 3 days to same day. -Account processing time takes into account NIGO rework. - Capacity in Front Office will increase significantly and free up staff to better support sales processes (Set appointments, service existing clients, etc.) 1 Hour 1 Day Total: 2 Days Launch Account Setup & Funding Account Processing Start Stop NFS Processing 1 Day Current State: Account Processing ½ Day Image Account Opening Docs Launch Acct Setup & Funding ½ Day Up to 2 Days Total: Up to 9 Days Mail Application 2 Days Image Funding Docs ½ Day Funding Processing Up to 3 Days NFS Processing 3 Days Start Stop
Future State Benefit Analysis Annuities Future State: Current State: Source of Benefits Account Setup & Funding -Integrated Contact Management System will require less manual client data entry and reduce Initial Client Setup time for account opening by up to 75%. -Document and Data control will significantly reduce NIGOs, rework and delays. -Accountability for documents is owned by front office. Mailing -Integrated Document Management and Imaging System will enable applications to be imaged and indexed at the point of capture and eliminate 2 days of interoffice mail processing time and reduce overnight mail expense. Imaging -Having documents imaged at the point of entry, will significantly reduce labor cost in middle office for imaging purposes and delay in process Account Processing -Annuity Net will eliminate the need for a manual review and an integrated workflow will automate the feed to each appropriate carrier thus eliminating labor cost for account setup in middle office. Potential 85% Reduction in Overall Processing Time Future State Note: This is actual processing time versus elapsed time for actual receipt of funding and assumes all paperwork is completed at the time of application. Notes: -Account setup usually involves more than one account per relationship. -Imaging includes time spent in queue. -Account processing time takes into account NIGO rework. -Annuities over $500K require an additional step for compliance review. - Capacity in Front Office will increase significantly and free up staff to better support sales processes (Set appointments, service existing clients, etc.) Account Processing & Funding ½ day Imaging Start Stop Launch Acct Setup & Funding ½ Day Up to 3 Days Total: Up to 7 Days Mail Application 2 Days RSS Suitability Review 1 Day 1-2 Hrs 1-2 Hrs Total: Up to 1 Day Launch Account Setup & Funding RSS Suitability Review Start Stop Account Processing 1-2 Hrs
Overall Technology and Process Improvement Benefits Include:
Reduction of Labor Costs
Increase Revenue and Profit Potential
Optimize Labor Efficiency of Front and Back Office Support Staff by $0+ Million annually
Increase Projected Revenue and Profit through increased capacity of Financial Advisors by $0.0 Million to $0.0 Million annually
Decrease Market Exposure
Improve Client Experience
Improve Employee Job Satisfaction
Decrease Cycle Time (70%)
Reduce NIGO’s and Re-work
Significantly Reduce Number of Process
Steps by 52% (from 282 to 146 steps)
Business Case 0 20 40 60 80 100 120 # Process Steps Br/IRA Current Br/IRA Future Annuity Current Annuity Future MA Acct Current MA Acct Future Richmond Ops Richmond Mailroom & Imaging Front Office
A Streamlined Integrated Process Current State End-to-End Process Flow: Future State
Estimated 52% reduction in process steps
(from roughly 282 steps to 146 steps)
Reduction in cross organizational hand-offs
Reduced number of error resolution contact points
between Front Office and various Operations groups
Provides a single point of alert resolution to the
Financial Advisors versus the 14 in the current state.
Future State End-to-End Process Flow: The Future State Process Blueprint enables significant reductions in the number of manual efforts and hand-offs present in the existing process today. Business Case
There are quantitative, financial benefits associated with an improved account setup process:
Future State process improvements are expected to reduce the current
process from 283 steps to 146 steps .
Total cost to implement technology improvement solutions is approx. $0 Million.
The resulting annual financial benefit from reduced labor costs and increased sales revenue is $0.0 Million to $0.0 Million .
Increased Revenues, Expense Reductions Expanded Sales Capacity Final Setup Operations Front Office 282 Steps Current State: Future State: 146 Steps $
Projected 3-Year and 5-Year Financial Benefit
Resulting in an overall reduction
in Account Setup time of up to 50%.
Implementing the Future State Design solution is critical to achieving the financial benefits and process improvements identified for the STIS Account Setup Process. Cumulative Projected Annual Financial Benefits Year 1 Year 2 Year 3 Year 4 Year 5 *Financial benefits are cumulative and include expense reductions, revenue enhancements, and technology costs. Business Case
Overall Benefit Summary Integration of enhancements and recommendations identified in the Future State will result in a more optimized STIS Account Opening process that increases organizational productivity and improves the client experience.
Reduced cycle time up to 75% for Front Office account opening activities
Allow Financial Advisors to better focus on clients, resulting in: Future State Operational Inefficiencies Missed Front Office Opportunities Future State Process Improvements Overall STIS Account Opening process time and costs reduced by up to 50% . Goal is to eliminate NIGOs entirely Business Case
To be successful in achieving Process Excellence there must be a solid foundation to build on. This foundation must include:
Leadership must both clearly understand and communicate the need for change (there is no substitute for good leadership and many projects fail due to a lack of leadership)
There must be a compelling business case which includes increased revenue, lowered expenses and improved service (otherwise what’s the use in doing it?)
The Vision, Goals and Objectives must be clearly communicated and adhered to
Process Improvement experts cannot do it alone, the business as well as Information Technology must be involved (must be a team effort with a shared vision)
A sound structured methodology must be followed with tools, techniques and training provided . There is no substitute for data . (There is no magic formula, we use a combination of in-house developed BPI methodology, Six Sigma and Lean thinking)
Communicate your success and celebrate your achievements (everyone else in the company needs to know success is possible and they too will want to be a part of the success story)