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A model for optimizing process efficiency in multi stream data keying environment
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A model for optimizing process efficiency in multi stream data keying environment

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  • 1. A Model for Optimizing Process Efficiency in a Multi-stream Data Keying Environment Presented by: Arun Jain, SVP/GM, Data Management Services, ICT GroupCandice Blom, VP, National Wholesale Lockbox, J.P. Morgan Treasury Services Dan Hillman, VP, BPO Services, ICT Group 1
  • 2. Summary• Data Keying Challenges• Root Causes and Obstacles to Change• Co-mingling – The Key to Optimizing Processes• Identifying the Best Strategy for Your Organization• Case Study – Data Keying Co-mingling at J.P. Morgan Treasury Services• Question and Answer 2
  • 3. ICT Group: Overview• Leading global provider of outsourced customer care and related technology & business processing services• $428.1 million revenue (2008) – Publicly traded (NASDAQ: ICTG)• Deep vertical expertise• 40+ onshore/near-shore/offshore centers, including India and the Philippines• 18,000 employees worldwide• ISO- and Six Sigma-guided operational best practices 3
  • 4. Best Practices for BPO Projects• Rapid start-up and accelerated turn-around• Single domestic point-of-contact• Dedicated project management• Consistent, quality performance standards• Secure, redundant global IT/data network• Superior systems availability/uptime Typical Outsourced Services: • Data entry/management • Remittance processing • E-mail response management • Loan Modification • Mailroom/Imaging • Claims/application processing 4
  • 5. Enterprise Challenges: Data Keying• Data management considered critical business function that crosses multiple LOBs• Evolution/growth/M&As can result in multiple (and often duplicate) data management processes• Metadata created during the work-stream life cycle further complicates ability to efficiently organize and manage data Data Data Data Data Capture Analysis Manipulation Storage 5
  • 6. Enterprise Challenges: Data Keying• True costs of data management difficult to quantify and track – Results in redundant costs and reduced productivity• Difficult to understand full cost of enterprise-wide data management operations – Inability to assess fixed and variable costs at process level Results In: • Overestimated efficiency levels • Underestimated costs • Lost opportunities for process improvement 6
  • 7. Data Keying Inefficiencies: Root Causes• Similar or identical processes performed in multiple locations by separate management teams• Decentralized processes tend to multiply over time:• New products/services launched by multiple LOBs• Varying turnaround times lead to over-segregation of duties and inefficient resource utilization 7
  • 8. Obstacles to Change Stay out of Different management structures (by different LOB or geography) wish to maintain direct my sandbox. control of data and its use. We don’t know Without a top-down or cross-functional inventory of data management processes, what we don’t difficult to identify and leverage opportunities know. for process improvements. We’ve always Ad-hoc process evolution to meet dynamic business rules leads to less effective ways ofdone it this way. doing work. 8
  • 9. Process View of Back-Office Work Continuous Batch Mode 9
  • 10. The Ideal Scenario Goal: Utilize fewest workstations; maximize seat utilization rate (SUR) • Monitor overall SUR as key indicator of process efficiency Theoretical maximum monthly SUR = 585 hours (3 shifts, 7 day/week) • Continuous processes rarely effective due to staffing constraints and work availability limitations 3 shift, 7 day/week operation SUR = 375 hours/month considered “best-in- class” • Difficult to achieve and sustain for a single process operation • Possible for some processes like lockbox and item processing that are amenable to co-mingling 10
  • 11. Co-mingling Work-streams Improves SUR• SUR can increase significantly by integrating multiple work-streams into a single processing site.• Fixed infrastructure costs can be leveraged across additional volumes, improving efficiency. Results: 1. Total staffing requirements will decrease 2. Added cost savings through: – Cross training – Reduced supervisory requirements 11
  • 12. Developing Your Optimization/Co-mingling Strategy Analyze the Document Assess the Evaluate Processes in Expected Current State Alternatives Detail Results 12
  • 13. Assess the Current State Gap Analysis Document Develop RefinePre-workshop Current and Assess Gaps Roadmap And RecommendedScope Review Desired Future Business Case Solution State Define New Identify Quick Clarify Business Document Identify Gaps Governance and Wins and Long Scope Current State and Risks Operating Term Initiatives Models Identify Current Create Business Prepare Develop Define Processes and Case Migration Plan Participant List Opportunities to Future Business Implementation for Future and Project Plan Bridge Gaps Needs Roadmap Process 13
  • 14. Analyze the Processes in Detail Analyze the Processes• Once candidate processes are identified from gap analysis: – Review existing and proposed process flows, – Review quality and productivity goals, and – Analyze options and alternate operating models. 14
  • 15. Analyze theProcesses inDetail Analyze the Processes Document existing and proposed process flows (Document all touch points with adjacent processes)In 3 4 7 Out1 2 5 6 15
  • 16. Analyze the Processes in Detail Analyze the Processes Analyze options and alternate operating models• Centralized Processing?• Decentralized Processing?• Review potential technology constraints• Calculate seat requirements to maximize utilization 16
  • 17. Analyze theProcesses inDetail Analyze the Processes Review cost, quality and output goals (Identify potential conflicts and tensions) Quality Cost Output 17
  • 18. Evaluate Alternatives Evaluate Alternatives• What other frictional costs will impact alternatives?• Identify organizational impacts• Prepare change management plan• Alert stakeholders and develop new governance model• Create implementation plan the selected optimal solution 18
  • 19. Document Expected Results Document Expected Results• Baseline current fully loaded fixed and variable costs as well as projected cost savings from proposed solution.• Plan for annual post-assessment/analysis after reaching steady state.• Plan for year over year productivity improvement. 19
  • 20. J.P. Morgan Overview:• Global financial services firm with assets of $2.1 trillion and operations in more than 60 countries.• Leader in investment banking, financial services for consumers, small business and commercial banking, financial transaction processing, asset management, and private equity.• The Treasury Services business has more than 50,000 clients, a presence in 39 countries, and is one of the world’s largest providers of treasury management services. 20
  • 21. J.P. Morgan ReceivablesOperations• Originator of the first lockbox – offering the service for 60+ years, J.P. Morgan maintains one of the most extensive lockbox networks today anywhere in the world.• Offers Receivables Edge that allow clients to consolidate all accounts receivable transaction data and images into a single, secure repository, that’s accessible 24/7 via the internet, which helps expedite exception resolution and improve straight-through processing.• Receivables operations has an extensive geographic presence, with processing facilities in 16 sites domestically and 3 sites globally, representing 4,000 employees.• Wholesale lockbox business process more than 162 million payments and 2 trillion keystrokes annually, representing value in excess of $833 billion.• ICT performs data key for 36% of Wholesale Lockbox volume. 21
  • 22. Data Keying Optimization Success StoryJ.P. Morgan Treasury and Security Services Overview: Four complimentary processes consolidated from multiple sites into single co-mingled work-stream Processes owned by different LOBs Current seat utilization approximately = 340 hours/seat/month 22
  • 23. Four Processes: Original StateFax Processing of • 400K faxes per month from institutional lenders keyed at single-shift U.S. operation. Post system updates to loan parameter changes.Loan Documentation(e.g. interest rate changes) • 3 hour TAT, 24x5 day operation with very large monthly and quarterly volume fluctuations (up to 10x daily volume at quarter end).Credit Card • 400K applications per month.Application Keying • Keyed from image at multiple locations in single-shift. • 24 hour turnaround, 24x6 day operation with steady volume throughout the month, 99% accuracy standard.Retail Lockbox • Approximately 9M items processed per month. • Pass 1 and Pass 2 keying performed at multiple locations. • 24x7x365 operation. Multiple daily cut times, error standard <1:40,000. • Business sold by J.P. Morgan Treasury Services, June 2009Wholesale Lockbox • Approximately 90MM keystrokes per month. • Invoice and amount keying performed at multiple locations. • 24x7x365 operation. Multiple daily cut times, error standard <1:200,000. 23
  • 24. Four Processes: Current State• All four processes co-mingled at ICT Group BPO site in Manila, Philippines, with Hyderabad, India site for load balancing and disaster recovery.• Varying turnaround times and shift patterns allows for very high seat utilization.• Single-management structure promotes accountability, quality and efficiency across processes. 24
  • 25. Seat Optimization Model 180 160 168 seats required with no co-mingling 140Total Seats Required 120 Data entry 100 Standalone Total 5,000 hrs per month unused capacity Spare WLBX 80 WLBX Spare RLBX 60 RLBX Application Fax Data Entry 40 WLBX 20 RLBX Fax 0 Local Time Manila, Philippines 25
  • 26. Co-mingling: Cost Savings Analysis Stand Alone Model Example fully Total Cost hours/seat/ Seats Process loaded hourly productive month required cost hours/month per month per yearCredit Card App. Entry 207 $7.50 45 9,324 $69,930 $839,160Wholesale Lockbox 205 $9.50 55 11,300 $107,350 $1,288,200Retail Lockbox 202 $9.50 66 13,311 126,454 $1,517,454Fax Processing 198 $9.50 3 594 $5,653 $67,716 Total 204 169 34,529 $309,387 $3,712,644 Co-mingled Model Example fully Cost hours/seat/ Seats Total productive Process loaded hourly month required hours/month cost per month per yearCredit Card App. Entry $7.00 9,324 $65,268 $783,216Wholesale Lockbox $8.50 11,300 $96,050 $1,152,600Retail Lockbox 342 $8.25 101 13,311 $109,815 $1,317,789Fax Processing $7.50 594 $4,455 $53,460 Total 34,529 $275,588 $3,307,056 Savings from Co-mingling (8%) $33,799 $405,588 26
  • 27. Success Story: Performance Results• Standalone operations would have required 169 seats for steady state volume of all four processes.• By co-mingling four processes at one site under a single management team, 68 seats were eliminated.• Co-mingling supports a robust disaster recovery solution. An additional 25% capacity is available for short term disruptions at J.P. Morgan Treasury Services sites. Reduction in total seats = 40% At an average annual cost of $6,759 per seat/year, J.P. Morgan Treasury Services avoids over $400,000 in annual costs. 27
  • 28. Question & Answer Arun Jain Candice Blom SVP/GM, Data Management Services, ICT Group VP, National Wholesale Lockbox J.P. Morgan Treasury Services Dan Hillman VP, BPO Services, ICT Group 312-336-2829 800-201-1085 candice.blom@jpmchase.com info@ictgroup.com www.jpmchase.com www.ictgroup.com 28