Written by Brian Safron
Worldwide Program Director, Saas and Cloud Product Management at IBM
In part three of this series on how financial institutions gain competitive advantage through process modeling, we'll look at how PayPal and First Citizens Bank are improving operations and reducing risk by applying a consistent approach to process modeling.
Consistent process modeling drives consistent business operations.
Customers value consistency. Yet virtually all financial institutions find consistency challenging to deliver. In their article on building customer loyalty, aptly called "The three Cs of customer satisfaction: Consistency, consistency, consistency", McKinsey & Company noted that "banks saw an exceptionally strong correlation between consistency on key customer journeys and overall performance in customer experience." They went on to describe having an undercover shopping team visit 50 bank branches and contact 50 bank call centers. McKinsey's analysis found that:
"... for lower-performing banks, the variability in experience was much higher among branches [of the same bank] than it was among different banks themselves." (McKinsey & Company, "The three Cs of customer satisfaction: Consistency, consistency, consistency")
To achieve this mission-critical (yet elusive) goal of consistency, companies must have a consistent way of documenting their business processes and procedures. Without a common understanding of how they serve customers, it's almost impossible to achieve consistency across various customer service providers and channels (mobile, telephone, in-person, etc.), or to eliminate the silent killer of processes that are "almost the same, but different."
Therefore a consistent approach to process modeling provides dual benefits of 1)significantly increasing customer satisfaction by greatly increasing consistency, and 2)reducing the waste, duplicated effort and conflict associated with overlapping processes, applications and systems.
Experience with hundreds of companies has shown that business people who are given the opportunity to collaborate in a dedicated process modeling environment feel uniquely empowered to drive fundamental change in their organizations. In order for business people to get excited about process improvement, they must first be able to quickly and easily understand any process model. That's why process modeling standards exist - not 'standards for the sake of standards', but rather, standards that enable a common understanding of each process in the business.
When processes are consistently modeled, people in all locations and departments are able to easily comprehend, analyze and improve them. Blueworks Live automatically creates standards-based process diagrams, based on the Object Management Group’s Business Process Model and Notation (BPMN) standard (v2.0 if you're counting). The software automatically ensures conformance so that users do not need to learn or be concerned about the details of the standard. According to PayPal, which uses Blueworks Live to document its processes and help manage risk:
"If I’m looking at a process map that somebody does in London vs. one that somebody does in Baltimore, they’re using the same artifacts so it allows them to see the same things." (Michael Beverage, Global Credit Risk Manager, PayPal)
One of the issues with using Visio or PowerPoint to map processes is that the various shapes and connectors can be used according to each individual's preferences. According to noted industry analyst Bruce Silver:
“Common process diagramming tools like Microsoft Visio actually are a barrier to business user engagement in process improvement projects. They are most often used to create traditional flowcharts, but these have fallen out of favor for serious process improvement because the meaning of the shapes and symbols are not standardized. The diagrams might make sense to the modeler, but they don’t communicate clearly to a wider audience." (Bruce Silver, Industry Analyst)
A process improvement expert at First Citizens Bank noted that while "artistic freedom" may be good for painters and other artists, it's not ideal for process modelers.
"Before Blueworks Live people would choose what elements they wanted to use to represent different things and there wasn’t a standard. So when you tried to read the process map, you spent more time figuring out what things meant than actually understanding the process." (Andrea Plant, VP, Delivery and Process Optimization Strategist, First Citizens Bank)
A consistent approach to process modeling not only helps financial institutions serve customers better, it helps reduce risk. It's important to not only document the risks themselves, but also to know exactly where in the process each risk occurs. According to PayPal:
"We look at what happens before the risk and what happens after the risk. Having consistent models has been beneficial because now we can walk into a department and say, 'Here is your as-is process. Here are all your risks within the process. Here are your improvement ideas. Here are your controls.' We map all that information into Blueworks Live and come out the other end with a holistic look at the entire process." (Michael Beverage, Global Credit Risk Manager, PayPal)
According to a US-based Fortune 500 financial services company, the risk is high for companies who don't implement a consistent approach to process modeling:
"We used sticky notes on the wall, with different colors representing decision points and system activities. The resulting mistakes and gaps in processes elevated institutional risk — the kind of risk that could lead to the loss of billion-dollar customers and millions of dollars in profits — because of delays in handling time-sensitive financial transactions." (Senior IT Business Analyst, Fortune 500 Financial Services Company)
Blueworks Live provides a shared multi-user environment with extensive collaboration features.
The real-world impact of a consistent approach to process modeling
Think about the process diagrams in your own company. When an employee sees a diagram for the first time, how long does it take them to understand the process? Do they need the process model explained or are they able to figure it out on their own?
Process models are the primary representation of how your company does business. Can you afford for them not to be based on a common standard? The use of a consistent notation helps bring process modeling to life and turns what otherwise could be a siloed and academic exercise into a common set of easily understandable and shareable models of how your company does business.