A Side-by-Side Perspective On Process Excellence


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  • We have been showing steady improvement in meeting our service level obligations as reported in the Quality Scorecard Operational departments are understanding the best practices and are improving our performance each and every month We evaluate about 350,000 transactions every month across nearly 400 business transaction types
  • A Side-by-Side Perspective On Process Excellence

    1. 1. A Side-by-Side Perspective On Process Excellence WCBF 2008 LEAN SUMMIT Jim Halloran – Pershing LLC Vice President – Quality Management Office Karim Houry - DTCC Vice President – Business Reengineering & Quality  
    2. 2. Why Side-by-Side? <ul><li>A live comparison of two approaches in firms at different maturity phases along their Business Transformation journeys </li></ul><ul><li>An opportunity to share lessons learned and compare notes, on the fly </li></ul><ul><li>An engaging approach </li></ul><ul><li>Also known as the… “tennis presentation” </li></ul>
    3. 3. FS-BT Roundtable <ul><li>Launched in January 2008, the Financial Services Business Transformation Roundtable ’s main objective is to provide a forum for Reengineering, Quality and Business Improvement professionals to: </li></ul><ul><ul><li>share best practices on: - program deployment - change management - innovation - performance measurement tools to achieve substantial, positive and sustainable impact </li></ul></ul><ul><ul><li>explore solutions for industry-wide challenges </li></ul></ul><ul><ul><li>perform benchmarking studies in areas of common interest </li></ul></ul><ul><ul><li>network and partner on initiatives as and when judged appropriate </li></ul></ul><ul><li>The FS-BT Roundtable meets, at a minimum, on a quarterly basis </li></ul><ul><li>Alliance Bernstein </li></ul><ul><li>Bank of America </li></ul><ul><li>Barclays Bank </li></ul><ul><li>CIT </li></ul><ul><li>Citigroup </li></ul><ul><li>Credit Suisse </li></ul><ul><li>DTCC </li></ul><ul><li>Deutsche Bank </li></ul><ul><li>Goldman Sachs </li></ul><ul><li>HSBC </li></ul><ul><li>Lehman </li></ul><ul><li>Merrill Lynch </li></ul><ul><li>Morgan Stanley </li></ul><ul><li>Pershing </li></ul><ul><li>UBS </li></ul><ul><li>Vanguard </li></ul><ul><li>Wells Fargo </li></ul>
    4. 4. Our Respective Businesses <ul><li>Largest post-trade financial services infrastructure organization in the world: Over 13 billion equity and bond transactions processed in ’07 </li></ul><ul><li>“ Cradle-to-Grave” management of securities: Over $40 trillion of securities on deposit </li></ul><ul><li>Primary business focus on clearance, settlement and asset servicing for equity and fixed income securities: Over $1.85 quadrillion in securities settled in ‘07 </li></ul><ul><li>Industry owned </li></ul><ul><li>A leading global provider of financial business solutions to more than 1,150 institutional and retail broker-dealers, registered investment advisors , and money managers </li></ul><ul><li>Over five million active investor accounts, over $950 billion assets in custody </li></ul><ul><li>Industry’s largest solutions provider with nearly 70 years in the business with primary business focus on clearing, custody, technology, and practice management. </li></ul><ul><li>A subsidiary of The Bank of New York Mellon Corporation , the largest securities servicing firm in the world </li></ul>DTCC Pershing
    5. 5. Pershing and DTCC <ul><li>Pershing ranked within the top 10 DTCC Customers </li></ul><ul><li>Services provided by DTCC to Pershing: </li></ul><ul><ul><li>- Custody and Safekeeping </li></ul></ul><ul><ul><li>- Asset Servicing </li></ul></ul><ul><ul><li>- Clearance and Settlement </li></ul></ul><ul><ul><li>- Insurance Processing </li></ul></ul><ul><ul><li>- Mutual Funds Settlement </li></ul></ul><ul><ul><li>Trade Comparison and Recording </li></ul></ul><ul><ul><li>Continuous Net Settlement </li></ul></ul>
    6. 6. Business Transformation at Pershing <ul><li>Pre-2003 </li></ul><ul><li>Quality Circles </li></ul><ul><li>Total Quality Management </li></ul>Infrastructure <ul><li>Chief Quality Officer established </li></ul><ul><li>Service Excellence I (Customer Service) matures </li></ul><ul><li>Achieved CMM Level 5 </li></ul><ul><li>Service Level Management infrastructure completed </li></ul><ul><li>Six Sigma efforts focus within Pershing </li></ul>Initiation & Awareness <ul><li>Created Quality Management Office </li></ul><ul><li>Firmwide introduction of quality metrics </li></ul><ul><li>Initiated Six Sigma program </li></ul><ul><li>Service Excellence I (Customer Service) training begins </li></ul><ul><li>Achieved CMM Level 3, ITIL </li></ul><ul><li>Service Level Management infrastructure designed </li></ul>Process Evolution <ul><li>Quality Scorecard released </li></ul><ul><li>Six Sigma efforts focus on customer processes </li></ul><ul><li>Service Excellence II (Operations) deployed </li></ul><ul><li>Quality Metrics process designed </li></ul><ul><li>Voice of the Customer process initiated </li></ul>2003 2004 2005 2006 2007 2008
    7. 7. Business Transformation at DTCC <ul><li>1980’s </li></ul><ul><li>Quality Circles </li></ul><ul><li>Employee Participation Program </li></ul><ul><li>1990’s </li></ul><ul><li>Continuous Improvement Program </li></ul><ul><li>Cost of Non Conformance </li></ul><ul><li>Work Process Improvement </li></ul><ul><li>Catalyst for Change </li></ul><ul><li>Support DTCC Growth and Strategy </li></ul><ul><li>Early 2000’s </li></ul><ul><li>Launched Six Sigma & Quality Council </li></ul><ul><li>Central Quality Office & Six Sigma Infrastructure Teams </li></ul><ul><li>Balanced Business Scorecard </li></ul><ul><li>Cross-functional projects </li></ul><ul><li>CMMI and ITIL </li></ul>2010 2001 ’ 02 to ‘06 2007 2000 The 100-Day Plan Launch of Six Sigma Program Expansion Program Acceleration
    8. 8. Burning Platform at Pershing <ul><li>To be the recognized industry service leader, creating lasting competitive advantage for our Customers and Pershing through operational and service excellence </li></ul><ul><li>Create a customer-centric quality service culture </li></ul><ul><li>Consistently anticipate and exceed our customers’ expectations, building loyalty and trust </li></ul><ul><li>Instill a measurements-based culture to foster objectivity and continuous improvement </li></ul>
    9. 9. Burning Platform at DTCC <ul><li>A metrics-driven senior management team </li></ul><ul><li>An imperative to factually demonstrate commitment to Quality </li></ul><ul><li>A desire to maintain excellent customer satisfaction results (historically at 90% overall satisfaction) </li></ul><ul><li>A need for a rallying methodology to engrain Quality improvement tools across ALL DTCC functional areas </li></ul><ul><li>Requirement for an environment that allows DTCC to extend to its external partners </li></ul>
    10. 10. The People
    11. 11. Sponsorship at Pershing <ul><li>Chief Quality Officer established and member of Executive Committee </li></ul><ul><li>Service Excellence one of six Pershing Core Competencies </li></ul><ul><li>Established firm-wide communications standards to ensure consistent customer experience throughout Pershing </li></ul><ul><li>Service Excellence Awards given throughout the year </li></ul><ul><li>Firmwide Service Excellence Award named at annual leadership meeting </li></ul><ul><li>Incorporated into New Hire orientation program </li></ul>
    12. 12. Sponsorship at DTCC “ . . . and if we are to stay relevant in this changing financial services environment – then Six Sigma methodology and metrics must reach deeply into our organization.” Jill M. Considine, previous Chairman & CEO How The Depository Trust & Clearing Corporation Built A Culture of Quality, June 2006 “ . . . our Six Sigma program has made DTCC better, measurably better, in the way we deliver services to our customers, and in the way we perform on a day-to-day basis.” Don F. Donahue, current Chairman & CEO Six Sigma in Financial Services address, May 2007 QC A Business Reengineering & Quality Council with senior executives
    13. 13. Engagement at Pershing <ul><li>300 Customer Service Associates trained on Professionalism competencies </li></ul><ul><li>700 Operations Associates Trained in Customer Service Competencies </li></ul><ul><li>Manager Training </li></ul><ul><li>Random samples monitored each month and scored by external firm </li></ul><ul><li>Individual and departmental scorecard </li></ul><ul><li>Incorporated into annual performance appraisal </li></ul>Service Excellence Continuous Process Improvement <ul><li>Trained 54 Six Sigma Green Belts </li></ul><ul><li>Completed 21 projects </li></ul><ul><li>15 Active projects </li></ul><ul><li>Certified 17 Green Belts </li></ul><ul><li>Executive and Project Champion Training </li></ul>
    14. 14. Engagement at DTCC <ul><li>80 GB, 37 YB (Lean), 10 BB, 4 MBB </li></ul><ul><li>7 rounds of GB training </li></ul><ul><li>eLearning and instructor- led training </li></ul><ul><li>GB/YB Graduation Ceremonies </li></ul><ul><li>Over 250 projects completed </li></ul><ul><li>700+ employees engaged </li></ul><ul><li>More targeted training classes </li></ul><ul><li>Enhanced coaching skills </li></ul><ul><li>Rotation Program </li></ul><ul><li>Project pipeline </li></ul><ul><li>Kaizen Events </li></ul><ul><li>Quality Day </li></ul><ul><li>Chairman’s Award for Quality </li></ul>Engaging the “base”
    15. 15. Engagement at DTCC <ul><li>Id Project Champions </li></ul><ul><li>Expand Process Excellence </li></ul>Engaging the “middle” <ul><li>Require short BPM Training </li></ul><ul><li>Establish a Quality Forum </li></ul><ul><li>Launch Quality Champion of the Year Award </li></ul><ul><li>Draw by example via Fast Track MD Training </li></ul>
    16. 16. Lessons Learned: The People <ul><li>Be creative and inventive to engage the “sticky middle” </li></ul><ul><li>Ensure senior management “walk the walk” and not just “talk the talk” </li></ul><ul><li>Celebrate successes regularly and with fanfare </li></ul><ul><li>Build skills that are relevant to the parties being trained or certified (and to their sponsoring business units) </li></ul><ul><li>Avoid training for the sake of training. Ensure employees have the skill AND will to enhance their knowledge and apply their learning to planned project </li></ul>
    17. 17. The Infrastructure
    18. 18. Governance at Pershing <ul><li>CUSTOMER QUALITY SCORECARD </li></ul><ul><li>Customer Transparency </li></ul><ul><li>Process Excellence tracked since January 2007 </li></ul><ul><li>Part of core NetExchange ® </li></ul><ul><li>product offering </li></ul>
    19. 19. Governance at Pershing Nearly 1,200 calls per month are monitored for professionalism Telephone Professionalism Scores Level to “Exceed Expectations” was raised in February 2007 Percentage of Associates Exceeding Expectations (Based on Independent Third-Party Monitoring)
    20. 20. Governance at DTCC ID Core Process Map and/or SIPOC ID Metrics ID Process Specifications Start to Track Metrics Baseline & Control Charts ID Improvement Targets ID Pipeline of Improvement Projects ID Process Team ID Project Teams Launch Improvement Projects Track Progress vs. Targets Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 1. Setting the Stage 2. Understanding the Issues 3. Executing <ul><li>Curriculum: </li></ul><ul><li>E-Learning for Metrics </li></ul><ul><li>Process Control & Mgt </li></ul><ul><li>Lean </li></ul>Line-Up Process Team Members for Training
    21. 21. Governance at DTCC <ul><li>Asset Services (Operations) tracked since 2006 </li></ul><ul><li>Process Excellence tracked since 2007 </li></ul><ul><li>Web-based tracking and reporting </li></ul>Balanced Business Scorecard
    22. 22. Lessons Learned: The Infrastructure <ul><li>Establish a disciplined yet not overwhelmingly bureaucratic and rigid governance structure </li></ul><ul><li>Accept that business units will be at various levels of maturity - and engagement - throughout your organization </li></ul><ul><li>Measure what you measure… and manage what you measure </li></ul><ul><li>Leverage the “good old” red, yellow, green flags </li></ul>
    23. 23. The Impact
    24. 24. The Results at Pershing Six Sigma Efficiency Six Sigma Project Cycle Time
    25. 25. The Results at Pershing Customer Statements Sigma Levels
    26. 26. Quality Scorecard Performance 2007 Successful Service Levels Operations and Technology Service Center Reopen Rate The Results at Pershing
    27. 27. The Results at DTCC 2007 Asset Services Blended Sigma Levels <ul><li>Functional Areas </li></ul><ul><li>Underwriting </li></ul><ul><li>Announcements </li></ul><ul><li>Redemptions </li></ul><ul><li>Cash Receipts </li></ul><ul><li>Reorganization </li></ul><ul><li>COPQ </li></ul><ul><li>Customer Sat </li></ul><ul><li>Re-work </li></ul><ul><li>Risk </li></ul><ul><li>Average ’07 Sigma </li></ul><ul><li>Overall = 3.99 </li></ul><ul><li>Timeliness = 3.88 </li></ul><ul><li>Accuracy = 4.10 </li></ul>
    28. 28. The Results at DTCC % Amended Rates (or Defect Rate) 3.95σ Industry σ: 4.11 or .45% defect rate Internal DTC σ : 5.09 3.95σ 3.96σ 4.12σ 4.22σ 4.35σ Amended Rates CMO/ABS (Dec. 2007) Major Volume Drivers “ Going Public” with Sigma Levels: Structured Securities .24 .11 .01 -.15 -.16 -.16 Deviation from Industry σ 17.67% 9.61% 8.06% 20.75% 36.54% 7.38% As a % of all Agents 103 56 47 121 213 43 Number of Amended Rates
    29. 29. Looking Ahead at Pershing <ul><li>AON Performance Monitoring </li></ul><ul><li>Phone Call Transfers </li></ul><ul><li>Call Abandon Rate </li></ul>Customer Satisfaction Service Excellence Relationship Survey Data Transaction Survey Data Focus Group Data Key Drivers Customer Service Average Speed to Answer Service Center Responsiveness System Availability System Response Time Usability Customer Quality Index Flexible Technology
    30. 30. Looking Ahead at DTCC <ul><li>All functional areas enrolled in Process Excellence by 2010 </li></ul><ul><li>Retrofit into enterprise-wide processes and identify business process interoperability </li></ul><ul><li>All VP’s and Directors business process improvement proficient </li></ul><ul><li>More joint initiatives with external partners </li></ul><ul><li>Go public with all Asset Services sigma levels </li></ul>Year 1 ID Process & Metric Year 2 Improve Process & Metric Year 3 ID New Process &/or Metric Continuous Improvement Loop Year 3 Continued Improvement Build Improve Re-Build
    31. 31. Summary: The Road to Process Excellence DTCC Functional Measures External Measures Engagement Executive Sponsorship Pershing Executive Sponsorship Enterprise Measures Engagement External Measures Enterprise Measures Functional Measures
    32. 32. Closing Remarks <ul><li>Different game strategy… yet same desired outcome </li></ul><ul><li>Similar challenges… yet varying approach </li></ul><ul><li>Stayed focused but remained flexible </li></ul><ul><li>It is truly about the corporate culture, the people and the long term business objectives… </li></ul><ul><li>… and it all must lead to enhanced customer trust and loyalty </li></ul>