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A1 business memo global ops- seb_debasis chakraborty_403503


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A1 business memo global ops- seb_debasis chakraborty_403503

  1. 1. Problem OverviewEstablished in 1972, SEB is one of the largest and most prestigious commercial banking groups in NorthernEurope. Last few year SEB has faced tightened resource constraints, acknowledged that its business process is notautomated and a lot of bottleneck on the way of growth. A reactive approach resulting in lost opportunities forquantitative and qualitative improvements and a questionable return on investment. They were looking tostreamline processes, lowering the operational cost and incorporate core values into their day to day operationsystem. Due to highly competitiveness in the market the company has decided an aggressive strategy to become#1 in Northern European regions. The CEO of SEB was under pressure to increase market share, increase the rateof adding new customers.SEB’s IT needed to better alignment of IT with business requirements to keep up with changing customer needs.Automation has become critical to SEB operations. IT staff took a close look at what manual tasks could beautomated so that it could keep the same level of administration even as the bank added more systems. A fewyears ago, the company analyzed its business processes and found common business challenges.ChallengeSEB CIO & CTO has to provide a secure and multichannel platform. The bank has experienced increasingly seriousproblems associated with production operations. The most salient issues are (a) falling manufacturing productivity(due to delay of new services in the market) and (b) increasing overtime costs for both line workers andengineering staff. These operational management problems are related to one another (e.g., overtime costs affectproductivity measures). The probability, however, is that an underlying problem is the root cause of bothmanifestations of the production problem.There are numerous challenges such as manual process reduces productivity and operational efficiencies, delay ofdelivery due to lack of skilled resources and slow recruitment process. And due to insecure, manual, incapability ofmultichannel sales and non-integrated process the firm was losing 50 million SEK weekly.AnalysisSEB was facing tremendous pressure with high operating and maintenance cost, lack of skilled resources, qualityissues (poor customer satisfaction, poor response time, and outage and security risks)The deep analysis was based on the following approachesMeasure with the Current system – Analyze, If SEB’s Vision and Objectives can be accomplished with currentsolution or not [address the major issues in to the steering committee], assess the current system and Identify thegaps, issues, bottleneck and risks. Develop proper planning strategy, implementation strategy and review theoverall process.The outcome of analysis produced that SEB was lacking process and operational excellence, low productivity dueto manual process, lack of collaboration, lack of enthusiasm, insufficient skilled staff and lack of knowledgemanagement process.Debasis Chakraborty EMBA International Business School
  2. 2. ProcessAfter analysis, we have found a number of process and operational issues such as Uncertainty – lack of correct andmeaningful information, Complexity – Need to process huge information for clear understanding, Ambiguity - lackof conceptual framework, Equivocality – several contradictory frameworks.In this financial Organization, Ive seen operational sclerosis, the fault begins at the top of the organization —those who decide how to allocate capital, measure performance, set promotions, and determine whichoperational problems to fix and when.What SEB was lacking? The SEB was lacking the following operational Processes such as Operational efficiencies,change management and controls, Problem Management, asset Management, planning, 360 degree view ofcustomer, proper Quality control, standard and guidelines, efficient due diligence process, exit strategy and scalingplan, risk and mitigation plan.What are four key Strategic Processes that SEB needs to follow - Four key management processes are strategydevelopment and deployment, performance measurement, talent development, and operational problem solving.Process Improvement Strategy - Identify the biggest bottleneck, Remove this bottleneck, continue the processand find out new biggest bottleneck until the improvement goals are met (or, more likely, continually improve theprocess throughput and cost).Introduce the best approaches and strategy from Six Sigma.RecommendationThe recommendation to SEB was on Operational Efficiencies – By adopting business and processautomation, One IT Roadmap, blueprints, alignment with business and IT. Improved Quality Management andProcess – Such as high availability, response time and end-user satisfaction, lower the cost of ownership, Reducerisks. Kaoru Ishikawa clearly stated that “As much as 95% of quality related problems in the factory can be solvedwith seven fundamental quantitative tools." Innovation – Introduce emerging solutions with multichannel capability[for example secured payment solutions integrated with Smartphone and social networks]. Collaboration -Introduced offshore and onshore delivery model, which resulted in service efficiencies, 100% uptime, and highthroughput. Talent and knowledge management – By providing appropriate training, skill hiring, promote internalleaders at all levels in the business and share knowledge resulted to increase employee productivity andefficiencies. Demand Management – Use skill, talented Geo resources as required and quickly deploy them withadopted multi-vendor strategy.The recommended framework is a seamless integration between people, processes, and systems across the wholeenterprise.OutcomeWithin 6 months of implementation, our client SEB has achieved break-even, and one year after implementation, ithas achieved double digit increased employee productivity, reduced Operational cost [35% year to year], fasterservice availability, improved operational efficiencies, high customer satisfaction, 25% growth with adding newcustomer, increased market share and highest degree of regulatory and compliance. Reduce the number ofDebasis Chakraborty EMBA International Business School
  3. 3. operational staff by more than 60%, resulting in a 35% cost saving for the derivatives business. This significant costreduction delivers an extremely fast return on the investment."Our competitiveness—our ability to retain our global customers—depends on our ability to adapt just as fastas the largest megabanks to our customers’ demands." - Bernt Eklindh, Global Owner, SWIFT paymentssystems, SEB"By providing seamless integration with our existing pension fund, insurance securities systems and legacyapplications the new frame work allows us to offer the right mix of products and services uniquely tailored toeach customer’s needs." Martins Freibergs, head of product and technology development, SEBDebasis Chakraborty EMBA International Business School