Case Study:  Cycle-Time Reduction, Banking

This Case Study describes how Gagnon Associates helped a small credit union significantly reduce the cycle-time of many of its key business processes, resulting in higher productivity, cost reductions, and increased customer satisfaction:

The Company

A  Metro-West, Boston, USA financial institution.

The Problem

In fiercely competitive local environment, new CEO, committed to business transformation, mandates strategic review of all key business processes.   Strategy:  significantly differentiate the institution against its local competition by becoming more efficient and effective at delivering “stand-out” customer service.  CEO also has personal agenda to eliminate functional “silos” and create more cross-functionally effective organization.

The Approach

Institution embarks on a process-by-process, team-based, analytical approach, using the services of Gagnon Associates.  Over period of two years, cross-functional teams working with Gagnon Associates identify significant productivity improvement opportunities in key business process areas such as:  loan and equity line application; new product introduction; account/portfolio initiation and management; and lost/stolen debit card replacement.

Representative example:  Typical cycle-time to replace lost/stolen debit cards: 7 to 9 days; occasional: 13 to 15.  Also, poorly coordinated vendor delivery of customer PINs relative to new cards often results in additional customer “wait time” for cards to be usable.

Following methodology designed and managed by Gagnon Associates consultants, Debit Card Fulfillment cross-functional team, composed of participants from Deposit Operations, IT, Customer Contact Center, and Retail Branches is constituted and chartered.   Facilitated by Gagnon Associates, and working over a period of two consecutive days, Debit Card team “maps” existing process flow, identifies causes of excessive cycle-time, creates “to be” map for improved process, and makes recommendations to achieve “to be” process state.   In the “Town-Meeting” portion of the session, senior executives review and pass judgment on team recommendations “on the spot” so that process-improvement implementation can begin immediately.

The Results

Unprecedented, comprehensive, cross-functional view and analysis of Debit Card Replacement Process enables process stakeholders to:  clarify and formalize empowerment practices for “customer-facing” staff; consolidate and standardize multiple and inconsistent data-handling tools and practices; optimize sequencing of data audits for reduced customer data inaccuracies; and optimize external vendor integration within total Debit Card Replacement Process.

Total process cycle time is reduced from 7 to 3 days (best-case)/9 to 5 days (worse-case) —  representing 44% improvement (worse-case) and, 66% improvement against occasional, worst-case 15-day replacement cycle-time.  Client also reports “greatly diminished FedEx costs” (formerly required to expedite card deliveries). Debit Card-related improvements are judged so effective that they are applied to all other card-related processes, thus leveraging greater returns from this one effort.

Additional process improvement initiatives are implemented during subsequent two-year period.  Internal client resources are trained by Gagnon Associates in business process improvement methodology to enable longer-term client self-sufficiency and efficiency/accountability culture change.