Support cost reduction in Financial Services
Our client is a medium sized player in the Financial Services Industry. Their operations cover the provision of Investment, Protection and Pension products. Distribution is conducted primarily through a company employed sales team located throughout the UK and segmented into several customer-facing channels, with a growing contribution from the direct marketing operation. The business is in the midst of major change. The new watchwords are profit, cost control and value-add.
The client was concerned that the overheads were too high (when compared to the competition) and would limit their ability to compete.
The client asked us to review the cost base and recommend improvements.
Key Project Activities
The key project activities consisted of an analysis & design, recommendations and implementation.
Analysis and Design
We undertook a detailed analysis of the support activities to understand the scope of potential change. The analysis covered:-
- Objectives, activities, hi level processes, structure, culture and staff attitudes
- Stakeholder and internal customer views on service levels
- Hi level benchmarking
- Cost to serve (activity based costing)
- Zero based budgeting
The areas for improvement consisted of:-
- Services which had previously been outsourced which no longer provided good value for money should be insourced and downsized.
- Services which were non-core and could easily be outsourced
- Internal services which had grown out of proportion to their value-add which needed to be re-evaluated and trimmed
- Re-engineering and simplifying workflows
- Organising activities for the benefit of the internal customer
We designed a change programme to implement the above which would include the staff in the process and thereby gain by-in. The programme comprised three change teams from the business:-
- Insource Team. This team looked at the current activities and service levels from the outsourcer. Eliminated non value-add activities Mapped the remaining operational processes. Re-designed the process. Profiled the requisite skills. Planned the insourcing of delivery and transference to an existing team.
- Outsource Team. This team looked at the current activities and service levels. Eliminated non value-add activities. Mapped the remaining processes and improved same. Prepared a business case and ITT detailing the services to be outsourced. Prepared an implementation plan.
- Process & re-Organisation Team. The team reviewed the current activities and service levels. Mapped the key processes. Costed the processes. Re-designed the processes, eliminating those which overlapped or where non value-add activities. Profiled the requisite skill sets to perform the processes. Re-designed the departmental teams around the processes based on like skills. Prepared an implementation plan.