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EngO 2010 Smart  English
EngO 2010 Smart  English
EngO 2010 Smart  English
EngO 2010 Smart  English
EngO 2010 Smart  English
EngO 2010 Smart  English
EngO 2010 Smart  English
EngO 2010 Smart  English
EngO 2010 Smart  English
EngO 2010 Smart  English
EngO 2010 Smart  English
EngO 2010 Smart  English
EngO 2010 Smart  English
EngO 2010 Smart  English
EngO 2010 Smart  English
EngO 2010 Smart  English
EngO 2010 Smart  English
EngO 2010 Smart  English
EngO 2010 Smart  English
EngO 2010 Smart  English
EngO 2010 Smart  English
EngO 2010 Smart  English
EngO 2010 Smart  English
EngO 2010 Smart  English
EngO 2010 Smart  English
EngO 2010 Smart  English
EngO 2010 Smart  English
EngO 2010 Smart  English
EngO 2010 Smart  English
EngO 2010 Smart  English
EngO 2010 Smart  English
EngO 2010 Smart  English
EngO 2010 Smart  English
EngO 2010 Smart  English
EngO 2010 Smart  English
EngO 2010 Smart  English
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EngO 2010 Smart English

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  • 1. EngO: From Business Process Outsourcing Engineering Finance Division www.eng.it From Business Process Outsourcing To Business Process Utility November 2010
  • 2. Offering AREAS EngO Services Banking-Credit • Mortgage • Rating models updates • Credit administrative services • Collateral Management • Client personal information From Business Process Outsourcing to Business Process Utility2 Banking-Commercial • Client personal information • Opening and closing a bank account • Bank transfers, direct debit, domiciliation • Insurance saving Banking-Finance & Investiments • Fin. BO • SGR - Services • Custodian
  • 3. Banking-Credit Rating Update Customers economic data recovery in order to replenish the internal models • Data Collection • Reworking • Reclassification • Origination • Proposal • Resolution and delivery • After-delivery and Archive Mortgage Administrative management From Business Process Outsourcing to Business Process Utility3 • Collaterals data recovery • RE geo-detection • Fair value determination Credit administrative services BO in order to credit activities Collateral management Data recovery for Credit Risk Mitigation • Centrale Rischi management • CRIC management • Credit Scheduling • Renewals
  • 4. Banking-Commercials Banking account management Opening and maintenance accounts and others Population and maintenance client data toolClient data management From Business Process Outsourcing to Business Process Utility4 Administrative BO for PSD compliance Insurance BO Payments managemnt Underwriting Redemption Suspension Supplement
  • 5. Banking-Finance & Investiments • Securities Register • Deposits and depositories management • Asset Management • Funds placement • Settlements and Payments Finance BO SGR Services • Share calculation • Accounting • Activities against money laundering From Business Process Outsourcing to Business Process Utility5 • Asset Management • Positions in share management • Asset Management (law’s control and value share) Custodian SGR Services • Activities against money laundering • Subscribers administration
  • 6. The financial market today Momentum of significant discontinuity in the market due to changes in the political- economic scenario that impacted the whole system, generating crisis and reducing trust from the clients The market crisis and the change of mentality imposed by the system offer, however, big opportunities that can create value THE MARKET From Business Process Outsourcing to Business Process Utility6 Need to develop innovative customer loyalty techniques Need to revise their own rating systems because of inadequate internal ones and not trustful external agency (ex. Lehman classified as AAA+) Implement prompt reply skills to all changes imposed by the market (ex. compliance with new regulations etc.) Implement efficient sourcing models to reduce costs and gain operational flexibility FINANCIAL INSTITUTIONS
  • 7. BPO Market Trend in Financial Services According to Gartner (Dataquest Insight: BPO Trends in Financial Services, 2008), the market of BPO Financial Services will grow in the next years with a CAGR of 10.5% from 2007 to 2012, reaching a total of $55.9 billion in expenses by 2012. This growth is mainly due to reduction costs strategies implemented by the institutions to deal with the recent financial crisis (IT expenses – if not for the components that guarantee costs reduction – will decrease, while the off shoring services will see a fast acceleration). In terms of evolution of BPO services provided, we have recently seen the establishment of the new model known as the BPU (Business Process Utility). From Business Process Outsourcing to Business Process Utility7
  • 8. The evolution of BPO: the BPU (Business Process Utility) In the area of service delivery, in the following years, we will see an evolution from the Business Process Outsourcing towards the Business Process Utility that is, as stated by Gartner, a way to deliver slim, automated services. In the “Four Steps for BPO Success”, Gartner show the trend these services will have in the next few years: From Business Process Outsourcing to Business Process Utility8
  • 9. • Regulatory Compliance (Basel 2, Bersani, Mifid, etc.) • Credit Excellence • Payments (SEPA) • …… • Back Office of Second Offer model The offer model brought to the market will be made up of three Business lines: Consulting, BPO, Innovation: Consulting From Business Process Outsourcing to Business Process Utility9 • Customer Experience • Lean Branch • ……. • Back Office of Second generation • Rating models • Collateral Collection • … BPO Innovation EngO – thanks to its presale structure – will bring its offer to the market with the purpose to manage and outsource the operational processes of financial intermediaries in an end-2-end perspective, exploiting expertise on process, regulation compliance, and innovation.
  • 10. Business Partnership objectives Improve the operational performance of business processes through: Time to Market reduction Operative Costs reduction From Business Process Outsourcing to Business Process Utility10 Process execution control Increase quality and generate new value
  • 11. EngO’s model: Business Partnership Engo model provides a gradual and flexible approach to Business Partnership. Each of the executive arrangements described below may be implemented stand-alone or together with others in the customer's needs. Transform H COSTS/ADDEDVALUE Transform • Transformation of one or more parts of the value chain • Certainty of the result in terms of business performance EngO From Business Process Outsourcing to Business Process Utility11 COMPLEXITYL H L COSTS/ADDEDVALUE Service Delivery • “as is” execution Re-Engineer • Efficiency induced by changes in process and organization • Using technology to support the efficiency of processes performance Reengineer Service Delivery
  • 12. EngO mission EngO was born by the desire of Engineering Group of challenging the right mix of capacity for "listening to the customer" with operational powers and set of methodologies, asset and experiences. In the context of the model of services provision, in the coming years we will see the development of Business Process Outsourcing into the Business Process Utility that is in fact, as defined by Gartner, a way of providing services leaner, automated. From Business Process Outsourcing to Business Process Utility12 is in fact, as defined by Gartner, a way of providing services leaner, automated. The “Human Intensive” activities are physiologically migrating to IT transactions: unstructured information (typical of the paper contents) become in Engo structured information in a position to be directly drawn up by information systems. Engo accompanies its partners in this path with the credibility of being part of one of the main actors ICT.
  • 13. Improve efficiency of Back Office structures The application of the EngO offer, identified by projects to increase efficiency of the financial intermediaries Back Office operational structures, is based on the following stages: process assessment and gap analysis, activity reengineering (Consulting), definition and implementation of new operational model (Innovation), outsourcing to EngO structures (BPO). Service quality improvement SLA Improvement Service Monitoring (BAM) Process mapping vs. best practiceProcess mapping vs. best practice BSC Application and Back Office activityBSC Application and Back Office activity From Business Process Outsourcing to Business Process Utility13 Assessment processes & Gap Analysis Activity Reengineering BPO Implementation new operational model Commitment EngO Costs analysis Reduction of redundant, low value activitiesReduction of redundant, low value activities Productivity increase Cost control in real time Business Process Transformation Service cost reduction t0 time BPU
  • 14. The EngO approach Methodology Approach Project Plan EngO aims to become the Bank industrial partner for the realization of a Business Process Outsourcing project of the Bank Back Office activities, that can be identified into four macro phases: From Business Process Outsourcing to Business Process Utility14 Approach Project Plan Know-how Acquisition Transition Plan
  • 15. This phase is applicable to each process analyzed, and the key activity is the definition of the process KPI for their subsequent evaluation. Quality management Flow Rollout and Start KPI represents the small group of indicators that have been identified as critical variables to reflect the value of the process management strategies adopted, and that can be categorized as follows: Methodology: Processes and relevant KPI definition From Business Process Outsourcing to Business Process Utility15 Definition and evaluation of reference benchmark Flow Chart Drafting Definition of reference metrics Flow Rollout and process book sharing Definition of Monitoring Model Acceptance Test Planning categorized as follows: •Service Level Agreement •Performance Time and % Based •Human Resource Management •Volume •Customer Satisfaction KPI also represent an evaluation of the success strictly connected to the improvement targeted with the initiative.
  • 16. Flow Chart Drafting Methodology: Processes and relevant KPI definition • The activity wants to draft a back office project flow chart according to a logic temporal succession of structural • The activity aims to define the reference metrics for each entity indicated in the flow chart. • Metrics will be extracted from • The activity’s objective is to measure processing timing for each entity identify in the flow chart. • Reference • This activity intend to define the monitoring model of the process shown in the flow chart. • The model could be • The purpose of this activity is to validate deliverables in the previous phases, and verify the equity of models created • The activity aims to define the Process Book and its continuous update in time. Phase: Acceptance Test Definition and Evaluation of reference Benchmark Definition of Monitoring Model Flow roll-out, and process book update Definition of reference metrics From Business Process Outsourcing to Business Process Utility16 activities. extracted from the catalogue of metrics defined within the EngO® Method, and will be implemented at the maximum level of detail expected in the flow. • Reference benchmark will be collected and implemented at the maximum level of detail expected in the flow. could be defined at single entity or entire flow level, and its realization implies many different activities. according to EngO quality guidelines.
  • 17. Definitions : The Process is decomposable in subsequent phases. The Phase is an macroactivity succession. Every process (working) will have to be represented with the level of decomposition till the Macro activity or, if necessary, with the level of detail on the single Activity Macroactivities This second activity has as objective the design of the flow chart of a office process of back a temporal logical sequence of structured activity. Activities The macroactivity can be subdivided in Flow Chart Drafting From Business Process Outsourcing to Business Process Utility17 Macroactivities • The Phase is decomposable in Macro having activities specific input/an output. Every Macro activity is characterized the being carried out from operatingly homogenous subjects. • Eg. Asset Management The macroactivity can be subdivided in activities, that they constitute the minimal level of analysis of the process. The activities are determined decomposing the macroactivities second a sequential parallel logic Examples: Formal control ( / open note WF) Verify “bene firma” ( / open note WF) Angrafic control ( / open notes WF) Inclusion in proceedings …
  • 18. Process Repository and Work List Process Repository Work list The Organizational Repository is characterized from a structure based on the catalogue of the business processes (taxonomy), that it constitutes the infrastructure on which the characterizing mappings are placed the operativity of the nets, of the offices center them and of the outsourcer in an univocal context, homogenous and integrated. From Business Process Outsourcing to Business Process Utility18 Work list (the operating guides) for the operators, bring back the description of every single activity member the operating procedures in which the Service is articulated. Inside of every operating guide the following elements are indicated at least: • the single elementary steps that compose every activity and the relative modalities of execution; • the reference to the line controls that must be carried out by the operators; • the activities to undertake to forehead of anomalies; • the activities for which an explicit authorization from the Customer is previewed.
  • 19. Control system • Leaving from the risk analysis, connected to the activity of the Finance, EngO an inner control system has elaborated on the activities of the Service that can be reviewed for the specific requirements of the Customers, the system is such that: – it assures an effective management of the operativity and of the connected risks, defining political and appropriate procedures of control; – it establishes effective communication channels to the aim to assure that all the staff is Control system From Business Process Outsourcing to Business Process Utility19 – it establishes effective communication channels to the aim to assure that all the staff is to acquaintance of the policies and the relative procedures to own tasks and responsibility; – it defines the informative flows faces to assure to the full Customer acquaintance and governance of the operating procedures object of the Service. • The control system previews the institution of operational controls on line that will come executed from the operators of the supplier in order to control the correctness than operated. • Such controls will be in appropriate controls card’s
  • 20. Flowchart example From Business Process Outsourcing to Business Process Utility20
  • 21. This activity has as objective the definition of reference metrics for every entity defined in the flow chart. The metrics will be extracted from the metric’s catalogue defined inside of the EngO® Method and will be applied to the maximum level of detail previewed in the flow. Volume • Percentage practical subdivided for channel • Percentage practical subdivided for typology • Medium number of practical that an operator manages medium Number for the time being managed practical all' year from an operating medium Number of practical for Service Level Agreement • Aging practices in Backlog anomalies • Medium number of practical managed to the day in lying from 48 hours • Quality: Percentage practical managed in wrong way shifting percentage on the Previewed Volumes Reference Metrics Reference Metrics Definition From Business Process Outsourcing to Business Process Utility21 Performance Time and % Based • Medium time Practical Management • Medium time Wait Which had to I.S. • Percentage One Step Resolution • Percentage of Practical Suspended to external cause • Percentage Practical Reject to the competence sender because not Percentage • Practical Transferred to other Back Office • Percentage Practical that demands a call to the customer Medium time called duration customer (outbound) • Average ready Time on effectiveness Time in seconds Medium time Availability to the Effective Job vs Contractual Time • Occupation Operating Percentage year from an operating medium Number of practical for Customer for Year Customer Satisfaction • Percentage Customers whom Percentage supplies a positive feedback in last the 90 days • Customers whom a negative feedback supplies in last the 90 days Human Resource Management • Annual turnover • Operating cost of new Assumption • Necessary time for the formation of a new Operator percentage on the Previewed Volumes Performance IT • IS accessibility
  • 22. This activity has as objective the measurement of the timing of working for every entity defined in the flow chart. The reference benchmarks will be found and applied to the maximum level of detail previewed in the flow. Measurements Having decomposed every process in the macroactivities/activity composes that it concurs a measurement of detail of the single entities that takes part to the realization of the same process. It will have to be given evidence of the dependencies from the used systems Manual Survey • The timing of processing for each Automatic Detection • Should be identified Processes, Phases, the Measurement and definition of the reference benchmarks From Business Process Outsourcing to Business Process Utility22 • The timing of processing for each Macroactivities / Activities represented in the model are detected manually by stopwatch in assistance to operators. • Should be identified Processes, Phases, the Macroactivities or traceable activities automatically and the possible interventions to be implemented to simplify the measurement of the same. Benchmarks The reference benchmarks will be those now found for each process. In the absence of a reference model should be created one base of measurements on significant volumes : - Last month - Last quarter - Last half-year - Last year
  • 23. This activity has as objective the definition of the model of monitoring of the process represented from the flow chart. The model could be defined at the level of single entity or at the level of flow in its complex and its realization it previews multiple activities. Targets To provide the guidelines for monitoring the workflows of each practice run in the Back Office by: Analisys and definition of: • Instruments Monitoring Model Definition From Business Process Outsourcing to Business Process Utility23 Identification of a set of recommendations and requests through the creation of functional specifications for: • Customer IT • Internal IT Identification of monitoring methods and types : • Manual • Automatic • Mixed • Instruments • Methods • Support procedures
  • 24. This activity aims to validate the deliverables of the previous steps and verify the consistency of models made in accordance with the Engo guidelines. In this phase it should validate: • the flowchart Acceptance Test From Business Process Outsourcing to Business Process Utility24 • the reference metrics and their applications • the measurement model • the monitoring model In the event that these deliverables are not acceding to the quality guidelines, recommendations for the revision and completion of the models should be discussed and provided.
  • 25. This activity aims at defining the Process Book and its continuously update in time. The Book consists of three types of documents: Process List It’s the file (Excel format) that contains the stock of working according to the triplets structure: • Type – Family • Subfamily Summary Flow Rollout and process book update From Business Process Outsourcing to Business Process Utility25 – Reference to the Flow Chart document – Reference to the Card Process document: Metrics and Associated Measurements Flow Chart It’s the file (Visio format) that represents the flow chart of the process (subfamily) concerned with a detail level of or Macroactivities or Activities depending on the complexity of processing. Card Process document: Metrics and Associated Measurements It is the rows (formed excel) that it takes a census metric of reference for the working (family) and the carried out tsurveys (times of working, incidence %, etc…). The metric ones could be applied on various levels: the process; the phase; the macroactivity; the activity Detail Document for each Subfamily
  • 26. Project Plan - Phases DIC 09 30/04/2010 End actual Service July 2010 New Operating Model START Transition Consolidation Service Improvement Service Model fully implemented Initial Assessment Sept 09 Start (Sign LOI) Due Diligence e Contracting From Business Process Outsourcing to Business Process Utility26 As Is SLA collection To Be SLA definition Services responsibility SLA management EngO Operating & Service Model deployment Operating & Service Model consolidation To Be SLA tuning To Be SLA start measurement / responsibility Internal Back Office
  • 27. Activity Description g Collection of Bank requests for the activity that will have to be delivered by the service center g Definition of user requirements to connect the delivery center with the volumes it will have to manage g Analysis and definition of transition phase from the paper driven to the paperless working model g Collection of Bank/EngO IT specifications for the monitoring activities of mailing and reporting services g Definition and sharing of contractual SLA (metrics to measure performance, collection instruments, recurrence, reference temporal span, actual level of performance, target level of performance,…) g Definition, sharing, planning, and start up activities of Knowledge Transfer Project : Services and IT Infrastructure – Start –UP Form Deliverables g Contractual addendum paper filing procedure g Document with detailed technical requirements g Personnel involved List Objective g Census of the applicative/infrastructural/policy context, and of relevant indicators within the project g Identification of user requirements for the set – up of infrastructure needed by the Supplier to deliver the service (user profile, applications, connectivity, …) g Guarantee the correct implementation or user requirements towards IT, that can activate the operation — Gantt of project — Responsabile From Business Process Outsourcing to Business Process Utility27 • Logistic Infrastructure project Census of areas, office realization, work places Management transition phase couriers services from bank to service center Filing of registered and processed documents • IT infrastructure project Census of applications Collection of Bank requirements Implementation requirements and test • Mailing service project Analysis processes/sub-processes, procedure and service level Personnel selection and Knowledge Transfer activities Management of transition from paper driven to paperless model — Gantt of project — OctFeb Mar May June JulyApr Sept Nov DecAug EngO EngO EngO Release of detailed technical requirements document Personnel List Production of contractual addendum Start up Service (1/06/2010)
  • 28. Example of Governance Director Project Management Knowledge Management Process & Solutions Engineearing a.i. C.Guerrini Process & Quality Management Issue/Risk Mgmt Request Change Contract & Budget Transition Staff Transition Project manager People Manager Business Transition Project Technical Transition Project Business Capabilities Management Improvement Project HR & Facilities Service Performance Management Service Management Steering Committee From Business Process Outsourcing to Business Process Utility28 Operation Manager Recruitment and HR IT Finance Facilities and Services EngO BackEnd Structure Operating Structure Operation Manager Banking Operations Structure Banking Operations Structure Operating Committee Structure 1 Structure n
  • 29. Know-how acquisition The model to be followed during the Knowledge Transfer/Training process will be defined by EngO during the preparation of the project plan. The EngO method involve a constant information exchange with Bank personnel to reduce operator “Time to proficiency” . Bank Document Identification Details Processes • Knowledge Base Contents Identification Procedures Company Product Approccio Metodologico Piano Progettuale Acquisizione Know-how Piano di Transizione From Business Process Outsourcing to Business Process Utility29 IT Infrastructure (Knowledge Base) EngO Processes Request of updates/amendments to knowledge base • AnalysisProcess Flow • AnalysisOperative Procedures
  • 30. Knowledge Transfer – Training Plan The training plan that EngO intends to implement to reach the operator expertise level needed to manage the working, contemplates 3 main phases: Ph 1 • Theoretical training • Formal verifications • Theoretical training • Formal verifications • Bank support • Operative verifications • Bank support • Operative verifications From Business Process Outsourcing to Business Process Utility30 Ph 2 • Operative verifications• Operative verifications Ph 3 • Activities start-up • Quality control • Activities start-up • Quality control At the end of each phase there are the quality controls that must be overcome by all operators. During the service delivering are provided continuous training sessions (both platforms through portals e-learning and classroom
  • 31. Back Office Distribution: • Files • SLA Automated BO operatorsManagement: • Files • SLA Bank Management Systems Branch/Client The new generation operative engine activating BPU Engine for: Info & Control: • Reporting • Alerting From Business Process Outsourcing to Business Process Utility31 Operative production Communication • Mail • Text messages • Fax Distribution of files to operators Classification of files based on workability Optimal management operators skills Monitoring in real time of Back Office status in terms of: - compliance with SLA - instantaneous loading of BO - Actual or potential Backlog - “Dangerous” events: - Entrance flows anomaly - Delay in crossing time - Automation of repetitive files and processes Flexibility and Efficiency Engine for: • Analysis • Distribution • Monitor & Alerting • Alerting • Monitoring real-time
  • 32. Phase 3 Transition Plan from BPO to BPU The approach is very flexible and scalable, and can also be modeled according to the agreement between the Bank and EngO. Baseline effectiveness Baseline effectiveness Effectiveness Increase Effectiveness Increase Control of Business process Increment in production flow control Slim production processes Increase of speed in feeding Back Office production Baseline effectiveness Effectiveness Increase Control of Business process Increment in production flow control Slim production processes Increase of speed in feeding Back Office production From Business Process Outsourcing to Business Process Utility32 Partial CHARGE over some activities Phase 1 Phase 2 Month 1 Month 2 Month 3 Month 4 Baseline Service Cost Baseline Service Cost Service Cost Reduction Service Cost Reduction Business Process Transformation Adoption Paperless Strategy Adoption Paperless Strategy Transition of Back Office towards EngO Transition of Back Office towards EngO Back Office of new generation Back Office of new generation Workforce Optimization (Outsourcing) Workforce Optimization (Outsourcing) BPUBPU Reduced paper processes Reduces production time for each requirement Increase operator productivity Cost control in real time Baseline Service Cost Service Cost Reduction Business Process Transformation Adoption Paperless Strategy Transition of Back Office towards EngO Back Office of new generation Workforce Optimization (Outsourcing) BPU Reduced paper processes Reduces production time for each requirement Increase operator productivity Cost control in real time
  • 33. The Delivery Model www.eng.it The Delivery Model
  • 34. Governance/Monitoring structure EngODeliveryStructure Delivery Model The Delivery Model embraced by EngO will be a “lean” model, made of the following: 1. A Governance structure (to monitor and control processing) 2. An Operational Brain structure (to fraction different process phases, and for dispatching activities towards external factories) 3. A net made up of partners and third parties (for execution of process micro activities) Operational Brain Internal Structures From Business Process Outsourcing to Business Process Utility34 Onshore Near shore Offshore Site 1 Site 2 ..Site 4Site 3 EngODeliveryStructure Operational Brain Third Parties Each activity will be analyzed, mapped, and divided into micro activities which execution will be outsourced towards onshore, near shore and off shore third parties.
  • 35. Fine Tuning Back-Office Level I (operation) Back-Office Level II (supervision) Administration (ratification) The operative back-office performances are guaranteed by a multi level control From Business Process Outsourcing to Business Process Utility35 (operation) (supervision) The fine-tuning among the different levels allows to minimize the number of manual intervention in favor of control automatism. The final result is very high quality.
  • 36. EngO: From Business Process Outsourcing Engineering Finance Division Thank you www.eng.it From Business Process Outsourcing To Business Process Utility Novembre 2010

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