How Can Technology Help A Bank's Process Improvement Program?

By Michael D. Nichols, Nichols Quality Associates

It is an undisputed fact that technology has had a major impact on service processes over the last four decades. From customer service call centers to online checking accounts, it is hard to find a key business process at a financial services firm that does not have a significant investment in technology supporting it. Because of this, one would expect that technology departments are leading the charge with modern-era process improvement efforts and methodologies. Unfortunately this is not generally the case.In a survey we conducted as part of our recent book, Six Sigma for Financial Service: How Leading Companies are Driving Results using Lean, Six Sigma and Process Management, the majority of global financial services companies are using some form (or combination) of modern process improvement methodologies such as Lean, Six Sigma or Process Management. However, none of these companies' business process improvement efforts were being led by the technology functions of those companies.

There are several reasons why this could be happening. While recently interviewing different leaders at financial services companies, a few of the reasons that were brought forward were: technology providers have a more functional background; technology is seen as a supplier, not a partner; and technology groups are often imbedded in their own development methodologies. Let's look at each of these perceptions and break out the opportunity for change.

There is a tremendous demand for functional skill knowledge in IT organizations, and because that knowledge base grows rapidly, there is pressure to develop those skills in a limited amount of time. Unfortunately, this does not translate into useful business process knowledge. Because the technology provider is often only focused on the solutions to specific problems, they are not in the position to challenge the process itself. For example, in a process that has seven work steps in it, technology tries to improve those steps rather than question whether seven steps are really needed when only three may do the job as well, thus improving the overall process performance. The opportunity is for the technology team to challenge the why of the process versus only looking at what technological tools are needed to build a solution for the existing process.

Technologies groups tend not to be proactive partners; instead, they provide a more traditional support or enablement role. This is especially pronounced in organizations where all of technology is charged out to each project and funding must be provided before a resource can be assigned to a project. Due to this, significant opportunities for process improvement project identification are being missed. When you combine the technology groups with the operations around an end-to-end process structure, then technology can be a partner to process improvement. Integrated process leadership teams can then set common goals for the organization. In the interim, technology groups should at least adopt the key performance measures of the process they are supporting on an equal scale as their own. For example, in a loan origination process, the operations group may have a goal on close cycle time or first pass accuracy, while technology only looks at systems availability. By sharing the goal of the process being supported, technology now has more skin in the game to support process improvement.

While one cannot argue that technology groups are imbedded into their own methodologies, those methodologies--such as capability maturity model (CMM)--have become extremely robust in the last decade. All now incorporate some form of internal process improvement cycle. However, the results of internal process improvement within technology's development process is not visible to the business. The opportunity here is for the technology partners to learn the lexicon of the business process improvement teams on the operations side. By understanding Six Sigma terms such as DMAIC, DMADV or Lean terms such as Value Stream Mapping and Muda, they can help support those groups in their process improvement efforts. If technology is a true partner on the Process Leadership Team for an organization they will be aware of all the improvement activities taking place and can provide the right level of support at the right time.

Corporate finance functions underwent a change in the last decade as they began to take a stronger leadership role in identifying opportunities for improvement in the business versus the more traditional accounting, treasury and audit role. This was advanced further as Sarbanes-Oxley (SOX) drove a stronger process view into the organization. Technology has as much, if not more, to offer the modern financial services organization in its quest for continuous process improvement.

Michael D. Nichols is principal consultant/Senior Master Black Belt for Nichols Quality Associates, a consortium of Lean Six Sigma professionals. He was previously the Director - Six Sigma Design/Senior Master Black Belt, at American Express, where he co-developed the Six Sigma Design and Six Sigma Process Management programs.