Our Work

The client was a young company with aggressive growth and revenue goals – 300% growth in the upcoming year. In order to achieve these goals and prepare the company for an IPO, they needed to substantially reduce cycle time for collection and increase throughput without doubling or tripling personnel and other expenses. Early in LoBue's analysis a major operational problem emerged: a previously undetected and unacceptably high error rate early in the cycle that prompted downstream employees to almost always completely rework files. In addition, the client’s core processing system was based on older technology that was inflexible, expensive and difficult to maintain. It did not support their data needs for credit scoring, legal reporting and analysis. Outdated technology made it difficult to find resources to maintain the system.

• Reduction in collection cycle time from an average of 240 days to 120 days.
• Documented desktop procedures for all processes.
• Continuous feedback processes, which identified gaps, encouraged on-going process refinement and permitted growth in the company to be based on operational excellence rather than personal relationships.
• Based on the newly designed processes, detailed business system requirements were developed for creating and evaluating responses to an RFP. LoBue outlined workflow management requirements, database design requirements, document imaging and storage requirements.

As a result of the implemented process changes the company was equipped to meet its volume goals and was able to secure $25 million in additional venture capital.

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• Case Preparation – Implement an Expert Review function for all cases, which ensures that all case information and legal documentation is in order prior to forwarding cases through the collection process. The Expert Reviewers weed out uncollectible cases, reduce the high frequency of errors, and establish a case strategy that virtually eliminates the redundant rework that was expanding cycle time.
• Cycle Time – The organization was redesigned for additional accountability and the concept of developing experts was embraced by all managers. Plus, simple measures such as check sheets, standardized letter generation, case summary screens, automated system routines and cross team training contributed to improving both cycle time and eliminating the backlogs that were negatively impacting collection efficiency.
• Process Design – Functions were redesigned so experts, especially those responsible for collections, could focus on their specific job functions. Established and documented standardized processes and methods for each unit to ensure that all necessary actions have been correctly performed prior to forwarding the case to the next step in the process.
• Management Process – Established standardized management reporting based on the processing and turnaround standards. Introduced service level agreements for the supporting legal and cashiering teams. Restructured compensation and bonus plans to reward revised performance objectives. Implemented continuous feedback processes in key areas to tap employee best practices, concerns, and highlight where training, communication or process gaps remained.
• System Requirements – Identified and evaluated vendor systems based on workflow management technology, a relational database and have integrated document imaging and storage functionality.

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The Client was a consortium of private investors and a major bank. Their goal was to develop a B2B electronic payment processing business through the Internet, which would facilitate accounts payable and receivable processing and reconciliation, in an information-rich and bank neutral environment. This client was a start-up with whom LoBue worked from the blueprint stage to product launch.

The objective of our engagement was to design and implement the functionality, staffing, and processes and procedures necessary to effectively launch and deliver the product. LoBue built this from scratch based on the proposed functionality and ensured that specifications from other project participants (systems, website design and security firms) were captured in the Operations and Customer Service Center environments.

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• LoBue's project management expertise was instrumental in taking this client from vision to launch. During the engagement, LoBue coordinated implementation of a robust operational center that supported employees and clients.
• During staged releases, LoBue supported design, testing and refinement of the website and procedures to ensure full scope functionality, effectively operating as another client team member on many critical path elements.
• LoBue's involvement preceded the implementation of the Operations and Service Center, so as new management and staff joined the client, LoBue conducted training on operational functions, which expedited the assimilation of new hires into a very rapidly growing organization.
• "Best in Market" was both the goal and result, from product and website design through operational simplicity.

The first business-to-business network for secure, information-rich, bank-neutral, internet-based payment transactions was successfully launched.

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• Recommendations began with the analysis and development of a business model, then included the specifics of website functionality, and ended with the intricate design and implementation of front, middle and back end tasks and activities.
• All development focused on creating an Operations and Service Center that fully supported the functionality of the website and the customers. The business model mandated user ease; which required delicate balancing of risk management with a robust product.
• Recommended the necessity for and trained an in-house Program Director to oversee rollout.
• Created customer and staff user manuals and instructions on enrollment, website navigation, implementation and payment processing. These on-line manuals supported operating procedures that were designed for customer support, risk management, enrollment and activation, transaction processing and account maintenance. Error events and routine transaction handling procedures were crafted.
• Created complex capacity modeling tools and job descriptions to support hiring needs for a rapidly changing environment. Predictive transaction volume forecasting tools that supported the staffing models were essential in an environment where possible future alliances could quadruple volumes.

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Years earlier, the Client recognized the need to upgrade its back office technology solution to reapgreater workflow efficiencies. The decision was made to develop and use a leading edge technologymodel. Subsequent mergers and restructuring, delayed installation and implementation of the newsystem resulted in an off-schedule and over-budget project, and the use of multiple, non-interfacedtrade services systems. In addition, the business model to be supported by the new technology hadchanged, requiring a reevaluation of the entire solution.

Within the Client's specified timeframe (3 weeks), LoBue evaluated the situation, facilitated the above activities, and recommended continuing with the new system under a revised Implementation and Roll-out Plan. Technical resource savings of $3.2 million over 18 months, and increased revenues of $28 million over 3 years were expected under the new Business model and supporting technology solution.

• A Business Model Vision Workshop was conducted to facilitate Trade Services Management in the development of a singular, division-wide business strategy and action plan.
• An Environmental Assessment was undertaken to establish the range of technology options available to realistically support the requirements of the New Business Model. The assessment included review of: the Bank's three existing, yet unrelated, systems; the upgrade of an existing system; the new system still in development and testing; an off-the-shelf alternative system; and a de novo system used by the Asian branches.
• A Gap Analysis was performed comparing the product functionality, long-term flexibility, implementation risks, and anticipated costs of continuing development of the New System vs. purchasing an off-the-shelf alternative solution.
• Facilitated a meeting between Trade Services Management and the new system vendor to resolve resource and responsibility issues for a ramped-up, re-focused implementation plan.

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The Client needed to increase operating efficiency, improve MIS controls and develop a contingency (disaster recovery) plan for its Documentary Credit Processing Unit. Key goals were to eliminate paper document processing and increase workflow capacity. Additionally, the Client wanted to undertake the implementation of new technology that would include document imaging and control.

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Implementation of the new system, based on revised process flows, expanded the Trade Finance Unit's processing capacity by 30% and reduced direct operating expense by 27%. In addition, the quality and timeliness improvements led to a 20% year on year increase in trade revenues.

Replacement System

• Assisted the Client by developing a User Requirements Document for a new Imaging and Document Control System, followed by conducting a Request for Proposal, Vendor Selection, and System Design and Installation.
• Evaluated Client's existing technologies and the new technology planned for installation, including internal and external interfaces.
• Collected, identified and catalogued all source documents used to populate the current and proposed systems.
• Coordinated user and management efforts to create a customized system.
• Recommended reengineering all workflow processes prior to system development and implementation for maximum operational performance and minimum system development expense.

Operational Improvements

• Developed and implemented Management Performance Indicators which were a first for the Client. They included: cost per transaction, monthly transaction volumes, and progress tracking of documentary credit work in process.
• Created a Capacity Planning Model to ensure management could track volumes and processing times to meet planning and staffing requirements.
• Implemented the use of multiple levels of transaction approvals, reducing transaction processing time and empowering senior technicians.
• Adjusted the transaction pricing schedule for specialized service requests.

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Increasingly high processing costs had caused the client to lose nearly 4% of its market share to lower priced competitors. In order to regain its competitive position, the client needed to significantly reduce its operating costs and improve customer service.

Implementation of the recommendations resulted in sustainable annual cost savings of $21.5 million and a 33% increase in productivity. The project was acclaimed in a regional publication and won the Chairman’s Award for best project of the year.

• Centralized the trade services operations from 14 branches into one center. This significantly reduced the high premises costs and operational expenses associated with having multiple locations.
• Streamlined and standardized operational processes and procedures by identifying and implementing over 50 recommendations.
• Improved customer service significantly by:
• Establishing priority trade services for high revenue customers.
• Creating an extended late shift to process more transactions.
• Centralizing staff in one location to better support and standardize product delivery.
• Implemented MIS measurements to enhance control of operations.

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The division was represented by a collection of independent business units experiencing significant growth and all lacking a common infrastructure with which to effectively manage their growth. The division and its five business units reported year-end assets of over $6 billion and pre-tax earnings of over $160 million.

The organization was facing operational deficiencies, an inconsistent management process, functional redundancies and various compliance issues. The executive management team established a list of 23 critical success factors supporting five strategic initiatives; Expansion, Technology, Human Capital, Infrastructure and Product Development.

As a result, division executive management requested that LoBue Group perform a complete business process rationalization with which to identify and report organization and process improvement opportunities.

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These recommendations were incorporated into the implementation of a new national consumer lending organization.

The loan processing function was migrated from the retail branch network into a centralized operations center. This effort resulted in a 100% productivity improvement and a savings of $19,000,000 in labor costs. The retail branches were converted to sales-focused centers where a disciplined sales management process (from lead generation through closing) was instituted. The result was an increase in average originations per loan officer of 65%.

• Consolidate staff support functions (Finance, HR, QA, Risk Management, Training, etc.) across all lines-of-business.
• Develop and implement an enhanced Management Process to enable the business to measure and evaluate its performance and progress towards organizational goals.
• Purify the retail distribution channel of operational and administration functions, centralize loan processing, eliminate payment processing and implement third party closings.
• Eliminate redundant quality reviews and post-closing functions performed in the Servicing Department through the implementation of centralized loan processing and standardized pre-closing check lists.

The client had lost several high value sales executives and management decided to evaluate its hiring, training, performance management and incentive compensation processes for all of its retail sales staff.

• Recent changes had been made in the executive line-up. There was a new sales head and several regional and divisional managers within retail sales were replaced.
• Turnover in the branches was 35% +/-. Training was inconsistently applied by managers in the field who were, themselves, poorly trained and generally unprepared for their own positions.

The President wanted better prepared managers and salespeople, less turnover, productive new hires and a 50% increase in average sales production.

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The implementation roadmap led to a much improved hiring system. In addition, a training matrix was developed for client implementation. Performance management tools were produced for managers in the field and a detailed incentive compensation plan for salespeople and managers was created for management implementation. Program eliminated the personnel crisis and resulted in a year over year sales improvement of 65% in first year. Sales management turnover was reduced and sales personnel with over one year experience increased production by an average of 30%.

Hiring – Adopt an objective, behavior-based hiring methodology to include HR and branch managers.

Training – Adopt an 8-week new hire training matrix to include 2 weeks in a central training location and 6 weeks of in-branch OJT with syllabuses and prescribed training methods and schedules.

Performance Management – Adopt a performance methodology that provides reinforcement to in-house management programs for managers. Require consistent implementation of those methods.

Incentive Compensation Programs – Revamp present plans to encourage better performers to stay.

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A major global commercial bank needed to re-structure its organization and reengineer the key processes for all of its 200+ branches, regional offices and head office departments to improve effienciency and service.

A pilot program was needed to implement process and organizational changes at 35 key branches.

Within eight months of completion of the design and recommendations, 35 branches were converted, and head office QA and MIS were implemented.

Total run rate savings implemented during the eight months were over $9 million per year. Final implementation by the client resulted in savings of over $20 million.

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LoBue recommended significant organizational and process changes, including centralizing back office operations out of the branches and converting the branches into specialized service delivery and sales focused units. All positions and processes that did not have direct contact with a customer were moved to the central operations departments. Staff and support functions within the regional offices and Head Office were aligned to support the changes to the delivery channels. Additionally, recommendations were made for implementation of MIS in the Head Office and Branches, establishment of a quality assurance function, and development of a document retention policy and procedures and retention facility.

Major recommendations that were implemented included:

• Creation of specialized branch positions for Consumer, Commercial and Corporate banking.
• Restructuring of all operational functions within the head office.
• Establishment of a Customer Service Unit.
• Simplification of Loan Processing Operations at both branch and head office level.
• System implementation for consumer loan products.
• Establishment of Special Archive Team to analyze all reports/forms and to determine new archive procedures.
• Establishment of a Quality Assurance Unit.
• Physical redesign of branches and regional offices.
• For all head office, branch, and regional operations, newly designed processes were put into place (Desktop Procedures, training schedules, skill matrices, production MIS, capacity models) and the client project team was trained for rollout and further implementation.

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The client has three principal lines of business -- Health Care, Financial and Retirement Services and International Insurance -- and each was almost completely decentralized and autonomous. Certain infrastructure functions were centralized into what is called the Corporate Center. These units collectively had annual spending of approximately $850 million. Management wanted to cut upwards of $30 million from this annual cost base, but previous attempts had failed. The client's newly appointed Vice Chairman initiated a Corporate Center Review Program and LoBue was chosen to lead the effort.

The client benefits from this engagement were a streamlined centralized infrastructure using modern Management Information Systems to effectively manage for results. By the end of the program a $100 million annual expense savings was achieved besting the $30 million target by over 300%. The lines of business all increased profitability as a result of the reduced corporate overhead.

INFORMATION MANAGEMENT AND TECHNOLOGY

• Help Desk representatives idle time was reduced by enabling single sign on access, by revising password reset parameters and reducing the frequency of software upgrades. Supervisory spans of control were increased to levels consistent with global best practice and staffing models developed to determine recommended staffing levels.
• The Quality Assurance function was redesigned to better address high risk and critical initiatives during the development life cycle, driving improvements both within IT and out to the business units.
• Mainframe installation and customization units were consolidated to eliminate duplicative efforts, optimize job scheduling and reduce functional overlaps.
• Centralized project management and a redesigned management process were recommended, creating substantial reductions in manpower.
  

BUSINESS SHARED SERVICES

• Hospitality and Travel were streamlined through a reduction in manual and administrative tasks. Both adopted operations to improve their bottom lines while enhancing service.
• Purchasing process changes reduced FTEs, expedited deliveries and leveraged technology and vendors.
  

LEGAL

• The Corporate Secretary function was merged into the office of the General Counsel. Previously the Corporate Secretary also supported individual shareholders; a responsibility shifted to Investor Relations.
• Legal and Controllers both housed Tax units that provided internal counsel and strategy. These units were combined to unify strategy, eliminate duplicative research, and maximize synergies. In addition to FTE savings, the combined unit offers a consistent tax strategy and fewer contact points for users.
  

HUMAN RESOURCES AND CORPORATE COMMUNICATIONS

• Vendor Management of Advertising Media, Executive Search, Outplacement and Temporary Firms was initiated to reduce the total number to a more manageable level and leverage the client’s buying power.
• Staff Optimization in a centralized HR service center identified significant FTE savings.
• Benefit costs were reduced by a revision in the 401K Vesting Schedule to market terms, yielding significant savings while not impacting current plan participants.
• The large volume of Communications pieces distributed throughout the organization were consolidated, eliminated or electronically communicated for "essential" messaging.
  

FINANCE, ADMINISTRATION AND INVESTMENT MANAGEMENT

• Controllers renegotiated a 10% reduction in the fees charged by the external auditors. Functions within Controllers were redesigned, centralizing some services and strengthening Treasury processing.
• Internal Audit was redesigned, and professional auditor staffing models provided FTE and expense savings.
• Internal Investment Management downsizing was accommodated through the use of strategic outsourcing, combining back office functions and redesigning portfolio management in expectation of declining volumes.

The client asked LoBue to lead the design effort for a green field e-commerce auto financing capability on a new- direct to consumer auto web site. They needed direction in the design of a processing center and an analysis of the implementation costs associated with the project.

LoBue was asked to…

• Develop recommended processes and supporting systems to create an E-Commerce fulfillment center that could match the velocity of any designed electronic origination process.
• Analyze the company's legacy systems structure, compare it against the proposed system, and develop a map that could be utilized to implement the integrated technology. This map would also be utilized to estimate costs associated with these requirements.
• Develop a cost benefit analysis to compare current bank operations utilized during the development of this on line product, and the proposed costs associated with the fully operational processing center.
• Develop a detailed project plan encompassing both technology development and full center implementation.

The business environment was one of urgency. There were unique challenges in designing an operation in an e-commerce environment compared to a bank’s more traditional and well established auto financing process:

• Response needed to be instantaneous.
• The need to function in a totally remote mode, with no physical contact.
• An alternate means of securing consumer documentation was required.
• Ensuring fulfillment support to meet the turnaround time expectations of savvy internet users.
• Seamless coordination with the auto and ancillary sales functions was necessary.

The client also looked to LoBue to supply the necessary information to develop the request for funding from the parent bank. In addition to the financial benefits of the proposed project, the analysis had to show the importance and critical timing issues essential to the success of a processing center in an E-commerce environment.

In addition to achieving cost savings in excess of $15 million annually, the project resulted in the development of a complete project plan, including a technology map, that allowed the client to deliver a detailed proposal, including estimated costs and timing required for completion, to the parent company. The program was funded and implemented, resulting in the acquisition of the platform by an e-commerce technology firm at a substantial return on investment.

• Consolidation of like job functions.
• Elimination of job functions that could be replaced by the utilization of electronic communication tools, and efficiencies created by the implementation of enhanced technology.
• Creation of an E-commerce specialist who could perform multiple tasks in the new environment and achieve desired turnaround times.
• Implementation of enhanced workflow moving closer towards STP.
• Traditional channel fulfillment center integration roadmap.

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The client, a $5 billion+ vehicle finance company, initiated a company-wide reengineering program aimed at helping the management team achieve their service and profitability goals by increasing revenue, decreasing operating expense and developing an infrastructure to support future growth in a cost effective manner. With the help of this rationalization effort, the indirect automobile financing business would be substantially reorganized along functional lines with which to better support corporate business objectives. Any remaining decentralized servicing and operations functions would be regionalized and/or nationalized.

The key elements of the program included:

• Rationalizing the key processes in Collections, Loan Acquisition, Application Processing, Customer Service, Payments and Collateral Control to improve quality, productivity and profitability.
• Evaluation of consolidation strategies for Collections, Buying and Loan Processing, and recommending the most appropriate solution to the organization in support of future growth.
• Developing functional specifications for the redesigned Loan Processing function and identifying "gaps" with the current loan system automation.
• Rationalization of the payments process to improve payment cycle times including an analysis of the current third party “Lockbox” costs and performance indicators.
• Developing a Management Process to insure the monitoring of productivity and service measures and benefits.

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Total response time for credit decisions was improved by 30%. In addition to the increased service quality related to standardization and a more-responsive management process, occupancy expenses were reduced by over $5,000,000 annually. The program identified and achieved a reduction of over 400 permanent FTE -- representing annual savings of $14,000,000. Total annual savings exceeded $20 million in year two.

Corporate:

• Establish an Administrative Services group to manage activities relating to Facilities, Purchasing, Mail Services and Reception.
• Create a new Loan Servicing department that would be responsible for handling all loans after booking.
• Create a Quality Assurance function.
• Eliminate payment-processing functions from all remote field offices.
• Enhance the Voice Response Unit (VRU) in Customer Service to handle more calls, quote payoffs and eliminate handoffs.
• Standardize payments to clean up the process and reduce reconciliations.
• Consolidate the funding function within the Treasury Department.

Originations

• Remove Application Processing from buying centers and centralize in new center.
• Consolidate remarketing functions into the Remarketing department.
• Consolidate title follow-up activity into Loan Servicing Department.
• Consolidate Buying Center Back End collection activity into 3 full service Regional Collection Centers.
• Initiate paper-less buying utilizing the loan originations system.
• Standardize Loan, Buyer and collection processes across the organization.
• Create new Buying Center organization focused on sales and originations activities.
• Focus DDRs on Top Dealers and redefine relationship loading.

Collections:

• Migrate collections into 3 regional centers allowing for account randomization and maximizing facility usage.
• Establish consistent collection organizations, strategies and production goals.
• Consolidate all Buying Center Back End collection activity into 3 full service Regional Collection Centers.
• Create a Collection Support unit to provide clerical support for all units within the center.
• Eliminate all paper forms from collection workstations, utilizing instead the collection system.

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The business environment in which the client operates is rapidly changing with new regulations forcing product and delivery channel changes. New competitors regularly enter the retirement services industry. Internet service components are experiencing explosive growth. Upon LoBue's arrival the operating environment included:

• Antiquated systems that impeded an efficient delivery mechanism.
• A slower rather than urgent response to adapting to new market paradigms.
• The primary distribution channel, an agency sales force, was expensive to maintain and did not meet the day to day case penetration, enrollment, client retention, or client information warehousing needs of the current environment.
• Customer service processes were inefficient and under-defined.
• Regulatory and competitive changes in their industry forced case and product conversions, without the nimbleness of an organization that has a sense of urgency to adapt to market conditions.
• Notable absence of MIS throughout operations and sales.
• New executive management team.

The client was pursuing an aggressive sales strategy to double its assets under management. They recognized that market share was not the only component of competitive position and undertook this project to improve their competitive position in these specific ways:

• Reduce expense-to-asset ratio to a competitive level, which they defined as a 20BP gap.
• Establish productive, efficient, integrated work processes.
• Ensure that the processes and activities have a brand and customer driven focus.

Benefits came in many forms: non-HR expense savings, significant productivity improvements and unit cost reductions, streamlined organizations and improved end-to-end processes. There were over 100 actionable recommendations delivered and implemented.

Total project benefits were over $20 million annually.

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Operations

• Required MIS output was defined and managers were trained to use and fine tune capacity models.
• Call center operations changes were implemented that reduced the cost per call by 60 cents in the short term and by $1.00 within one year.
• The perceived high level of Not In Good Order (NIGO) cases, participant and money-in submissions from clients was addressed through the formation of teams and IT resources to track and reduce NIGO. The Individual Annuity unit’s NIGO was also addressed with a recommendation for a training CD and long term automation recommendation.
• Process and procedural changes in Administrative and Payout Services.
• New Operations/IT structure and systems to increase operations efficiency.

Information Technology (IT)

• Client IT organization was more expensive and more richly staffed than peers. Meaningful reductions in all major service areas and all organizational levels.
• Routine maintenance of old systems transferred offshore.
• Revised desktop/laptop policy that created purchasing power improvements.
• Opportunities to streamline or discontinue activities in time tracking, billing, the Project Management Office and consultant sales tax computations.
• A major consolidation of redundant IT functions with the corporate IT department.

Sales

• Major opportunities were identified throughout Sales, both in FTE savings and in other process expenses. Costs such as licenses, leases, travel, postage, printing, etc. were addressed.
• Instituted contact management systems for its various sales channels.
• Instituted sales metrics/productivity measurements.
• Consolidated MIS reporting units into one integrated financial reporting group.
• Within each distribution channel, opportunities were found to better define roles and handoffs for all sales associates. Process clarity was the cornerstone of many of these recommendations.
• The Producer Services area was redesigned to accommodate and streamline additional field activities.
• Redundant sales desks within separate divisions were consolidated into one centralized unit.

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