Case Study:  Business Process Improvement

This case study illustrates how Gagnon Associates used the GE Work-Out process to help a bank re-engineer its mortgage application process, significantly reducing mortgage application cycle time:

The Company

A legacy, 150-year old community bank whose new CEO initiates a change effort toward “becoming one of the most relevant and thriving financial institutions in our market area and beyond.”

The Problem

The Bank’s residential mortgage product is one of the institution’s mainstay products.  However, suffering from the bank’s slow, insular, legacy culture, the process is viewed in the marketplace as having a slower turn-around-time than that of the bank’s key competitors.  As a pilot project for this bank’s turn-around, the CEO picks the residential mortgage application process as his first process re-engineering effort.

The Approach

To ensure that this change effort is informed by the experience and knowledge of those closest to the work, Gagnon Associates is engaged to facilitate this first business process improvement effort, using the GE Work-Out process.  As an initial step, we conduct interviews among key individuals who support the residential mortgage application process, as well as relevant senior executives at the bank.  We then design and facilitate a three day Work-Out in which eight of the key bank associates who are responsible for originating and processing mortgage applications identify and recommend seven critical improvements to the application process.  In order to accelerate change to this critical process, the seven recommendations are presented to senior management and approved, on the spot, at the conclusion of the Work-Out.  Implementation can, therefore, begin immediately.

The Results

The empowered Work-Out Team automates key components and steps in the process such as the mortgage “write-up” and customer “time-line” update.  Ordering a customer’s title at preliminary underwriting, instead of later in the process, in and of itself cuts days off the process cycle time.  In addition, expanding access to the bank’s core record-keeping system ensures that anyone touching a mortgage application – from branch managers who originate to “back-office” personnel who process – can get instant status on any mortgage, thus greatly enhancing the bank’s ability to respond to customer-service inquiries quickly and accurately.   All in all, though the Team’s target is to trim 10% off their average cycle-time of 55.6 days to process a mortgage, or approximately 5.5 days, recommendations noted above, plus others, actually reduce the time required to complete a customer’s mortgage by more than 10 full days.