This conversation was started on linked in group Back Office Best Practice Forum but it is worthy of a mention in our blog.

eg’s CEO, Elizabeth Gooch summarised thoughts as follows:

“One of the issues here is that ‘back office’ means different things to different people. It can include many different functions from a single sales support person in a regional office to groups of people processing customer orders, claims or mortgages, financial transaction processing, even HR and payroll processing. For eg it means the people behind the front line where transactions are processed that are critical to delivering the customer experience but are often unseen by customers.

Unlike call centres, where the one main input channel is the telephone, work can come in many shapes and forms via many channels. As a result transactional processing is vastly more complicated and difficult to manage than the call centre will ever be. However, transactional processing has the scale and scope to deliver great operational efficiencies so investing time and money to performance manage these back office areas should reap significant financial rewards – businesses need to reduce cost.

I disagree that there is an emerging class of Back Office Workforce Optimisation tools are designed to accommodate the issues in the Back Office. Back office planning is not the same as front office and it is this misconception that prevents WFM tools being used effectively in the back office as they do not address core requirements of back office operating environments (latency, backlogs, multiple channels etc). There is only one back office product on the market that properly addresses all of the requirements of the back office and since it has been around for many years it can hardly be called ‘emerging’.

Adrian’s point about the cultural and behavioural challenges are true and should not be ignored. The tools will only give you partial benefits. It is the Managers and Team Leaders using those tools that will deliver the real benefits with the right training.

I think the biggest factor that stops people using WFM for back office planning is that ultimately these are not fit for purpose. End users with back-office WFM needs should ensure that the solution they select can effectively meet all of their requirements for specific back-office processes, ideally with purpose built functionality that works”.

In response to this one of the members posted:

What a great post. I can’t comment on the different vendors but you make some really great points. Back office environments are so diverse – even in my own organisation I’ve yet to find two that are the same! Thus we use bespoke methods to plan for them in order to make our planning relevant and meaningful.

Read the full conversation http://linkd.in/tbLdqG or comment here on your thoughts.

There has been a great deal written recently about the merging of the front and back office.  I am not sure about the merging of the two but more that the back office has awakened to the performance benefits that can be achieved.  Practices adopted in the front office can be applied to the back office.

eg have been a member of the Professional Planning Forum for some time and it is great to see member organisations embracing the opportunities that back office can deliver.  The PPF website has some good content for anyone involved in Back Office Optimisation and also has back office specific events.  If you are interested in Strategic & Forecast Planning, Real-time work management and Operational Analytics for the back office then I’d recommend you attend this Back Office Optimisation event.

Our Chief Executive, Elizabeth Gooch, wrote in a recent paper that one of the issues is that ‘back office’ means different things to different people.  For eg it means the people behind the front line where transactions are processed that are critical to delivering the customer experience but are often unseen by customers.

Transactional processing is difficult to manage.  It suffers from significant variation, not just in defining its scope, but also because there can be:

• Many input channels
• Varied, complex and multi-stage processes
• A variety of systems in use and
• A high degree of manual interaction

Unlike call centres, where their one main input channel, the telephone, work can come in many shapes and forms via many channels.  As a result transactional processing is vastly more complicated and difficult to manage than the call centre will ever be.

What we are hearing more and more is that the trouble lies in that workforce management solutions are not equipped with the required functionality to address back office work.  Erlang based solutions are considered outdated because of the multi-skill/channel element requirements and Erlang C does not allow for latency or address backlogs.

Is this your experience?  I think this topic is one to explore as one thing is for certain optimising back office performance is here to stay.

If you are interested in a related white paper from Bloor on ‘Operations management – measuring and managing effectively’ then just complete your details and I will send a copy to you.

I’m trying to pull together some views and stats on Back Office Capacity Planning.  Please comment on what tools you are using and what works,  Do these also address forecasting and strategic planning.  Anyone who contibutes I will send a copy of the overall views and comments.  Feel free to share this to your network – thanks

The problems of the back office are evident across virtually every sector including manufacturing, utilities, telecoms, financial services, healthcare and public sector.  One of the issues is that ‘back office’ means different things to different people.  It can include many different functions from a single sales support person in a regional office to groups of people processing customer orders, claims or mortgages, financial transaction processing, even HR and payroll processing.  For eg it means the people behind the front line where transactions are processed that are critical to delivering the customer experience but are often unseen by customers.

It doesn’t matter how good the front office is, customer perception will be shaped by what comes after their initial transaction – all too often failures in the processes that follow.

So what exactly are the problems that need to be addressed?

Unlike call centres, where their one main input channel, the telephone, work can come in many shapes and forms via many channels.  As a result transactional processing is vastly more complicated and difficult to manage than the call centre will ever be.

The key to choosing a back office system for your organisation is to understand the problems that need to be addressed and to find a vendor with a track record of delivering the full range of functionality required out of the box.  Many of the solutions on the market have been derived from experience in the front office, manufacturing or financial management – be sure to choose a system that has been purpose built to solve the problems of back office – a tool that will achieve your objectives and deliver real business benefit.  This is not about Marketing hype but solving a genuine problem – how to optimise back office performance.

Are you looking to optimize your back office and what are the problems you face?   Share your thoughts and leave a response and I’ll respond to any specific issues.  I’ll also share with you the finding of some research we commissioned on this very topic.  In the meantime take a look at the Back Office Optimisation video.

“Steve Coomber in the Edge January Edition raises an important issue – where poor performance is identified, there can be reluctance to tackle it.

Users of eg operational intelligence® tell me that they use the rich individual performance information to provide real-time, consistent and objective performance reports to help their Managers help their People to improve.

The successful use is put down to:

1) Measures are owned and understood by everyone in their teams

2) People can track and monitor their own performance during the day

In this way, there can be no surprises at “appraisal time” when each person can evidence how well they have performed, what quality standards they have achieved and see for themselves how their skills have developed, using the balanced range of measures covering all operational factors from service to productivity.

Get more information on the eg approach to Performance Measurement and how this can address a performance gap, positively with lasting results.

For more information, to comment on this post or find out more just send us an email.   If you want regular updates on our news and knowledge sign up to our newsletter.

It is not surprising that service organisations are continuously looking at ways in which to improve performance.

There are numerous performance improvement methodologies but two key ways of doing this are through:

• Operational management improvements that result in the more effective utilisation of resources and processing systems available.  For example, implementation of operational intelligence and improved operations management practice.

• Initiatives aimed at achieving improvement through re-engineering processes, structures and cultures.  For example, “Lean”, “Six Sigma” and “Systems Thinking”.

It is generally accepted that companies must integrate their people, processes and technology to drive the implementation of process improvement throughout the business.

So, if this is the perceived wisdom, why aren’t more organisations doing it successfully?

Common reasons for the failure of process improvement/excellence initiatives include a lack of alignment with corporate objectives, little or no ownership from senior management, a lack of adequate planning and staff not understanding the reasons for the project, resulting in no buy-in.

However, one of the most common failures is the lack of effective and comprehensive MI to support process improvement activities.  The distinction between a project based methodology and a permanent performance management tool is an important one.

All performance improvement methodology initiatives require measurement and operational management tools to help define, monitor and report problems and solutions.  I’d be interested to hear your experiences.  See the short client video for how our clients have approached it.

Comment below or email me at ask@eguk.co.uk

Credit Today Conference

As an industry, it is widely acknowledged that debt purchasers and collectors are not always recognised as offering a great ‘customer experience’.  Whilst the dynamics of an organisation responsible for collecting debt cannot be championed as gracious, it is vital to engage with clients and customers in such a way to maximise the opportunity for equitable solutions.

At the recent Credit Today Collections and Debt Conference, the term “Can’t Pay/Won’t Pay” was used by several of the delegates when discussing attempts to develop customer profiles – separating debtors from those who can’t but want to repay from those who simply refuse.  This is a key area as it has a real affect on how an organisation will then attempt to recover debt, and if this segregation is incorrect it can lead to an ineffective and costly recovery process.

A speaker at the conference, Oliver Betts, Head of financial services & asset sale at TDX group, described his efforts at developing segregation and a deeper customer profile by adopting a strategy of “obsessive capture of data at every point in the process”.  The requirement for data collection covered all key areas such as customer profiling, outcome, and performance (KPI’s such as penetration, yield and roll rates) and provided the organisation with the analytics from which to shape itself for success.

The right approach to data collection, and using this management information to develop effective customer profiles, provides an organisation with the ability to match recovery processes to segments for greater efficiency – this will also improve the overall experience for the customer as they are targeted with the right methods for debt repayment.

Having a purposeful data repository is also an important factor when a lender considers selling or outsourcing a debt to a DCA (Debt Collections Agency), as without the customer profile the DCA could potentially undervalue the debt due to the work involved for them in subsequently building the customer profile from which to deploy their own collections strategies.

Collecting the right data at the right level requires intelligent operations management. eg has developed a range of products within its eg operational intelligence® software suite that captures and transforms the detail of every activity and interaction with a process or customer into a three-dimensional view of your operation.

In a collections area, data captured real time at agent activity level can provide managers with the ability to determine the true cost of debt recovery administration. A good example of this comes from within one of eg’s large retail banking clients who have sold part of their debt book to a DCA, but still administer the collections activity internally alongside their own books.  The use of eg operational intelligence® software in this client enables the segregation of each book, as well as the profiling of customers. A key benefit is the separation of administration costs, skills, and resources across both books and the accurate recoup of the administration costs from the DCA. The automated data captured can also used to determine the overall cost of debt recovery per account, a significant measure when determining which debts to sell or outsource.

Another eg client has applied data collection within their collections area to improve the performance of agents by measuring roll rates (early arrears through to late arrears), right party contact and outcomes. Individual performance is expected to increase by measuring at process level allowing the organisation to meet their overall recovery targets year on year.  To add balance within this operation, the client will also be collecting qualitative data to ensure improved performance does not come at the expense of expected customer experience standards – both measures will then be utilised for individual performance appraisals and bonus payments.

For more details on eg’s approach to achieving sustainable operational improvements within collections, arrears and debt management areas, contact me – adrianharvey@eguk.co.uk

In his book, Operational Leadership1, Andrew Spanyi is reported as saying that;

“Fewer than 40% of major improvement projects typically achieve their stated goals, and the sustainability of these gains is even more questionable.”

eg operational intelligence® automatically provides Clients with root-cause data from the activities that make up their processes so it becomes easier to target improvement activity AND make sure real benefits are achieved as a result.

Using this data makes it possible to understand the effectiveness of those processes, utilising a balanced range of measures covering resource, service standards, quality thresholds and unit costs. It also allows organisations to step back and understand “WHY” things happen.

eg operational intelligence® automatically captures a balanced range of performance measures that spotlight bottle-necks, skills shortages, errors and failures. This data informs operational managers, resource analysts and capacity planners to make the most of resource now and to manage performance. Through pro-active management, a step-change in performance is realised in weeks. Specialists use eg’s approach to intelligent operations management too: quantifying the volume and actual time taken real-time and enabling your people to “drill-down”, qualifying “WHY” things happen. This transforms the knowledge of how many times an activity occurs from being useful to being valuable intelligence, for example how long it takes and how much it costs.

Providing operational intelligence drives real focus to improve everyone’s efficiency and effectiveness whilst also augmenting business improvement initiatives to improve processes and drive out waste. Measurement to understand current process performance and develop future capability is essential. Capturing the data that is important to you, allowing you to identify and focus on the key things that will make the difference is vital.

Knowing what you have today, identifying the opportunities for tomorrow and having a clear view on the path between delivers the best benefits for all.

For more details on eg’s approach to achieving sustainable operational improvements, contact me – andrewbaker@eguk.co.uk

ref:1 Spanyi, A. 2010. Operational Leadership. Business Expert Press LLC. New York.

Research from the Professional Planning Forum demonstrates that although improvement in back office operational performance is growing in importance, most organisations do not have mechanisms in place to increase efficiency.

For more details of the survey, visit: http://bit.ly/cWhjTd

Delivering tangible improvements in customer and people satisfaction, driving down waste and increasing performance are top of the operational planner’s agenda. Organisations have found that the insight required to make a difference comes from Operational Intelligence: a balanced range of measures, supported by active management planning and performance reporting.

Not only does this approach deliver “more with what you’ve got”, it provides a clear view that feeds and supports process improvement, using lean, system thinking and six sigma methodology. One eg Client sums this up as “Delivering today better, whilst developing a better tomorrow”.

To see more about the benefits that eg Client’s achieve with operational intelligence, visit: http://www.eguk.co.uk/case-studies/

eg are pleased to support the PPF Back Office Seminar on 14^th October 2010 at Manchester Airport, UK.  We hope to see you there. 

• For preferential rates to attend this seminar please email: ask@eguk.co.uk
• If you would like to see the key presentations following the event and engage in the post event commentary just complete the short form below and we will be pleased to arrange:

Summary taken from a white paper written by Mr P Ezzard, eg solutions plc.

Introduction

Research in the USA retail banking sector suggests that at the turn of the century, 70% of customer transactions were still undertaken by face-to-face contact in High Street branches. By 2005 this had reduced to 42% and it is predicted in 2010 it will account for only 30% of service transactions (Corporate Executive Board 2006 – Lean Manufacturing for Financial Services).

These face-to-face transactions have been replaced by telephone; internet and ATM entered requests routed to large Contact and Processing Centres. This pattern is being repeated in service organisations across the world.

This change has been driven in part by the development of technology but also by organisations wanting to reduce costs and improve service through centralisation, outsourcing and off-shoring of service support and processing.

In this context further research in the USA suggests that in service industries 40% of operational costs are wasteful even when the work is undertaken in dedicated centres (Corporate Executive Board 2006 – Lean Manufacturing for Financial Services). Similar research in the UK suggests that “failure demand” in Contact and Processing Centres can account for anything from 20 to 60% of all customer transactions in financial services, often higher in local authorities and utilities (Seddon 2003 and 2008). (Failure demands are customer contacts and subsequent processing activities caused by a failure to do something or do something right for the customer.)

It is therefore not surprising that service organisations are continuously looking at ways in which to improve performance.

Two key ways of doing this are through:

• Operational management improvements that result in the more effective utilisation of resources and processing systems available. For example, implementation of operational intelligence and improved operations management practice.

• Initiatives aimed at achieving improvement through re-engineering processes, structures and cultures. For example, “Lean” and “Six Sigma”.

The two approaches are separate but complementary. The purpose of this paper is to provide an overview of several of the more common improvement methodologies and then to show how eg operational intelligence® can be used alongside them to monitor success and maximise the benefits that can be achieved by organisations striving to meet customer and cost improvement requirements.

To request a copy of the full white paper please complete the form below.

• operational intelligence
• operations management
• operational management
• performance improvement
• workforce management
• resource planning
• operational management training
• productivity improvement
• customer services software
• workforce planning
• business process management

So what do all the above mean……why all the different angles?

Well the crux of things I feel is that we need to deliver to the customers’ expectations while minimising the costs of doing so.  If this is the case what is the best path to take…..getting people to do the correct thing at the correct time…not just for a project’s sake, not because a newer technology promises the world but takes too long or is too expensive to do so. Run your business properly.  Understand what you already have in place, use what you have coupled with real-time operational metrics and change operational management behaviours.

This brings sustainability, continuity and supports the proliferation of continuous improvement best practice. What do you think and which initiative has delivered the best benefits for you?

Over the last few weeks we have been developing a new area on the website for case studies.

The case studies detail projects with organisations such as The Co-operative Financial Services, Legal & General, Resolution (South Africa) and HBOS and will help anyone with an interest in operational management to understand the benefits that can be achieved through the implementation of eg’s operational management software and methodology.  All are available to download in pdf format or can be easily forwarded in an email.

If you have any questions about any of these case studies or would like to find out more about the eg operational intelligence® software suite, email ask@eguk.co.uk.

As the year comes to a close I would like to reflect on some of the award successes we have had this year, since the topic of awards has come up several times in the blog over the last few months.

The most recent news is that one of our clients, Legal & General Retail Savings, won the Ventana Research 2009 Award for Operational Intelligence.  This is a fantastic achievement and we would like to congratulate Paul Lewis, Customer Services Director at Legal & General Retail Savings, and his team once again.  Read more about this impressive operational intelligence win.

On 3 December the hard work of the last few months truly paid off with the announcement that eg was the winner of the ‘Technology Vendors – Most Innovative Financial Services Solution’ category at the Financial Innovation Awards.  We identified this award as a key target for eg after the category was launched last year as we believed the eg operational intelligence® software suite fulfilled the award criteria so were really pleased with this win. 

Two of our entries, including Nationwide Regional Brands, have shortlisted in the ‘Back Office’ category of the Professional Planning Forum (PPF) Innovation Awards  The competition is closely linked to PPF’s annual conference on 20 April 2010 with the winners being announced at an awards ceremony on the evening.

This week we submitted several entries into the the Financial Sector Technology Awards.  Last year two clients – The Co-operative Financial Services (CFS) and Legal & General Retail Savings – were shortlisted and CFS received a ‘Highly Commended’ for their project with Capita.  Hopefully one or more of this year’s entries will be shortlisted in the New Year.

With our own eg operational excellence® awards in November, being shortlisted in the UK IT Awards and receiving a ‘Highly Commended’ in ICT Cluster Awards, the last few months have been very exciting and we hope further success will follow.  As usual, look out for awards updates in the news area on the website!

Summary taken from a white paper written by Mr P Ezzard, eg solutions plc.

To request a copy of the full white paper please email racheloliver@eguk.co.uk

Research in the USA retail banking sector suggests that at the turn of the century, 70% of customer transactions were still undertaken by face-to-face contact in High Street branches.  By 2005 this had reduced to 42% and it is predicted in 2010 it will account for only 30% of service transactions (Corporate Executive Board 2006 – Lean Manufacturing for Financial Services).

These face-to-face transactions have been replaced by telephone; internet and ATM entered requests routed to large Contact and Processing Centres. This pattern is being repeated in service organisations across the world.

This change has been driven in part by the development of technology but also by organisations wanting to reduce costs and improve service through centralisation, outsourcing and off-shoring of service support and processing.

In this context further research in the USA suggests that in service industries 40% of operational costs are wasteful even when the work is undertaken in dedicated centres (Corporate Executive Board 2006 – Lean Manufacturing for Financial Services). Similar research in the UK suggests that “failure demand” in Contact and Processing Centres can account for anything from 20 to 60% of all customer transactions in financial services, often higher in local authorities and utilities (Seddon 2003 and 2008).  (Failure demands are customer contacts and subsequent processing activities caused by a failure to do something or do something right for the customer.)

It is therefore not surprising that service organisations are continuously looking at ways in which to improve performance.

Two key ways of doing this are through:

• Operational management improvements that result in the more effective utilisation of resources and processing systems available.  For example, implementation of operational intelligence and improved operations management practice.

• Initiatives aimed at achieving improvement through re-engineering processes, structures and cultures.  For example, “Lean” and “Six Sigma”.

The two approaches are separate but complementary.  The purpose of the full white paper is to provide an overview of several of the more common improvement methodologies and then to show how eg operational intelligence^® can be used alongside them to monitor success and maximise the benefits that can be achieved by organisations striving to meet customer and cost improvement requirements.

To request a copy email me or contribute to what improvement methodologies you are using please comment.

We were really pleased to win the title ‘Technology Vendors – Most Innovative Financial Services Solution’ at the Financial Innovation Awards last week.

It’s obviously great promotion for our proprietary software, the eg operational intelligence® software suite, but it also means that the term ‘operational intelligence’ is becoming more widely understood and accepted.

Do you have any examples of developments you have seen the ‘operational intelligence’ space or ideas as to how the profile of the term could be raised?

The eg blog has been launched to encourage discussion and debate between people interested in operations management, operational intelligence, performance management and related topics. We will also cover key issues we see affecting our clients, the financial services industry and customer service operations in general.

As an operations management software company with over 20 years of experience of implementing software and services within blue chip companies throughout the world, we hope the content published on this blog will give you ‘food for thought’ and stimulate conversations between ourselves and other people with experience or an interest in our field.

The writers who contribute to the eg blog come from varying backgrounds with a diverse selection of expertise, as you will see by reading their profiles. We welcome all comments and contributions and hope we can create an online community which will offer real value to our readers. If you have any requests for a certain topic or discussion please get in touch.

As this is the very first blog entry, we have decided to start with the basics. We use the terms ‘operations management’ and ‘operational intelligence’ regularly, but what do these terms mean and how are they connected?

If you have a different take on these subjects or have any additional information you would like to share, please leave a comment.

Operations management – the methodology
True Operations Management should provide a consistent approach to actively managing work, people and processes across multiple locations – to deliver improved operational effectiveness through customer service, quality and productivity standards. It should also minimise rework and unlock bottlenecks.

The problem with many Operations Management technology deployments is that they often overlook the reason why the technology is needed in the first place. They set out to deliver the ability to ensure that work is ‘done’ – consistently, on time, and correctly. Yet they miss one of the key ingredients to corporate success – the day-to-day management of the people involved. 

Firms need to manage the way their people interface with processes & systems more carefully. Successful firms have derived as much as 40% additional productivity improvement over and above that achieved by a technology solution in isolation. 

It is only this fact-based management of work, people and performance that will deliver real, tangible results and long term benefits.

Operational intelligence – the tools to do the job
How can you improve your business operations to become more efficient, transparent and agile? 
Operational Intelligence enables you to analyse and manage your business activities in real-time to improve your business operations. Managers and Team Leaders can choose effective actions quickly and make better decisions to allow optimal response at the right time. 

By bringing together existing technologies such as BPM, BI, Workforce Management and CRM, Operational Intelligence provides the missing link – historic, real-time and predictive Management Information (MI). 

It’s not just about monitoring or looking at and comparing historical results. Think of it as technologies operating from a common infrastructure, but looking at the data at different frequency levels. Operational intelligence is about driving action and embedding the capabilities to take action and deliver improvements. Operational Intelligence will impact business results – guaranteed.