Our Work

The merger of two Global Banks required the integration of the respective Investment & Private Banking divisions.  Significant differences in client focus, sales programs, systems and operations existed at the time of the merger. The "Street" committed savings from the merger strategy required the integration of the Investment & Private Banking Divisions to reduce direct expenses by $80 million.

Twelve months into the merger there was no progress on the integration.  As a result LoBue Group was engaged to resolve issues and achieve the committed integration goals.

All Investment & Private Bank processes and operations were redesigned and a new management system was established. Client segmentation resolved differences in Product vs Client sales processes and improved Product Management results. Best practices were implemented across the organization and best of available systems in use were chosen and redundant systems eliminated.  The field sales network was redesigned, eliminating redundant facilities and personnel. At the conclusion of the 16 month program a direct cost savings in excess of $110 Million was achieved.

Investments

• Increase portfolio manager account loading.
• Develop relationship/product profitability model.
• Consolidate trading and incorporate a fixed income brokerage.
• Rationalize investment advisory allocation.
• Develop investment management system.
• Install MIS process.

General Services

• Reengineer domestic securities, international securities, cash processing, client services and credit control & support.

Client Management

• Redesign organization and reengineer all activities identifying inefficiencies, redundancies and positioning.
• Increase relationship management capacity within departments by realignment of non-sales activities.

Trust & Fiduciary Services

• Implement specific process improvements, system enhancements, work design and a Management Process.
• Remove administrative tasks from Trust Officers – transfer to Trust Assistants and Fiduciary Assistants.
• Standardize work processes across department to institutionalize product.
• Move support work from Trust Department to Operations area.
• Install Management Information System

Support Operations

• Identify redundant activities performed within the Private Bank for consolidation.
• Develop unique processes for each activity utilizing "best practices".
• Create organizational design which focuses on productivity, efficiency and service excellence.

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The client was interested in the purchase of a technology company with headquarters in Europe. This potential acquisition was targeted to be the European hub for the Clients business expansion plans.  In addition to the standard financial due diligence required, the client desired an operational and profitability assessment to determine a fair market price.

Based on the LoBue assessment, the acquisition target price was modified to reflect risk in the sales and marketing functions and above average processing costs. Further review and analysis of the client base and client on-boarding costs by our client caused them to accept our recommendation to abandoned the acquisition.

In preparation of our assessment, LoBue examined the following areas:

Organization and staffing.

• Staff skills and management process.
• Operations and data center.
• Products and systems.
• Clients and revenues.
• Contracts, licenses, and fee arrangements.
• Services and service level.
• Infrastructure logistics.

LoBue provided extensive business analysis outlining

• Market position and current and future market potential.
• The quality of products and services.
• Assessment of operations and management process.
• Detailed analysis of the sales process and pipeline potential.
• Reliability of the technology platform and enhancement plans.

While not specifically part of the contract focus LoBue uncovered critical Marketing, Sales, and Product deficiencies in the enterprise.  Additionally, revenue was centered on 3 clients with no active pipeline for growth.  This along with platform and productivity issues raised serious questions about the verasity of the acquisition.

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One of the largest financial institutions in the Middle East was facing significant competitive pressure, deteriorating market share, changing regulatory requirements, inefficient processes and antiquated legacy systems. Theses issues were causing excessive technology and operational costs, resulting in reduced profits. LoBue was asked to assess productivity levels, service issues and systems capabilities across the retail, treasury operations and financial accounting divisions and to recommend a program to resolve these issues. As a direct result of this project, a new retail banking system was integrated for over 240 branches, treasury and its supporting operations and bank-wide financial reporting. This integration included broad-based upgrades to the systems speed and functionality as well as enhancements to the core general ledger and accounting applications.

• Managed the review and justification of core operating applications and hardware resulting in the elimination of $4,000,000 in costs and the identification of key performance benchmarks.
• Coordinated critical deliverables related to the identification, design and testing of the retail branch platform application and core operations functionality, avoiding additional resource investments valued at over $2,500,000.
• Managed the financial accounting application business re-design, data integration, and interface enhancements, resulting in savings of over $1,000,000.
• Designed and developed an integrated project plan including 1200+ milestones, leading to the successful completion of software quality assurance tests, data conversion requirements, executive critical path awareness, performance benchmarks and pilot and implementation schedules.

The successful implementation of this system positioned the bank to realize an annual reoccurring savings of $7,500,000.

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The project required the direct management and oversight of dozens of software, hardware and telecommunications contractors and vendors, interaction with multiple users from various lines of business, the control and cost benefit analysis of key application customization, quality assurance design and execution, conversion and migration methodology, detailed benchmarking and integrated implementation management.

The client had evolved over the years from supplying electronic equipment for capturing fueling data at the pump to capturing fleet expense data as a means for payment and for use in reporting and managing fleet expenses. This shift required that the company build a market for its fleet fueling cards by developing partnerships with petroleum merchants to accept the cards for payment and data capture.

With over half a million cards outstanding and a sustained growth rate of 60%, the client’s operations had been experiencing growing pains and they were wrestling with how to evolve the organization to both keep up with growth rates and to solidify the infrastructure.  The operations became space bound and new facility expansion was 18 months away.

Key deliverables:

• Organization Design to Support Strategy - Market development and product management activities were centralized into departments focused on these strategic issues. Management and coordination of sales functions were consolidated into a single department, focused on optimizing sales strategies. Customer service activities were consolidated into a single department, focused on supplying superior service through a “single customer service window.” The Human Resources functions were given a prominent position in the organization to support the strategic nature of human resources development.
• Quality Improvement - Service quality was improved by eliminating the multiple contact points that customers and partners had within the client organization. Quality was improved by clarifying job responsibilities and establishing accountability for all processes within the company.
• Management Process - Key Performance Indicators were established, allowing management to view and react to the performance of the organization.  
• Established the Capacity Model discipline for allocating human resources.  This was a key to improving productivity for volume absorption.
• Developed the Business Planning Model to be used to link the Strategic Plan, the Financial Plan, the Capacity Model, and the Production MIS system.
• Documented job descriptions in order to clarify roles of management and employees.  

As a result of the successful implementation of recommended changes, the client was able to absorb a 100% increase in volume with no increase in staffing levels.

• Sales Management Process - Establish a clear and cohesive sales management process.
• Service Management Process - Assign the focus for all customer service related activities to one centralized department.
• Human Resource Management Process – Develop a systematic approach toward the integration of human resource planning into the strategic planning process.
• Business Management Process - Develop and establish a Business Management Process that includes: MBOs, Key Performance Indicators, Production MIS, Credit Portfolio Performance Data and Service Level Agreement Compliance.
• Product Development and Management Process - Create standard “customized” products, develop a clear and cohesive product development and management process, and relocate responsibility for this function (including channel development) to a single centralized department.
• Implementation Management Process - Standardize the implementation process and centralize implementation-related activities.  Create a volume absorption plan to allow growth to continue without the need for new facilities.
  

The Human Resources, Payroll and Benefits functions of this advertising and marketing firm had numerous process, organization, systems and training issues:

• Compliance issues in Benefits Administration.
• Multiple source documents coming into and out of the Human Resource, Payroll and BA processes.
• Non-standardized processes followed for the same transaction type from Division to Division.
• Flawed HR 1 employee data.
• HR1, ADP, Spectrum and Unicare System disconnects.
• Poor System performance.

Project goals included:

• Generate a detailed design of reengineered process flows for the HR and Payroll functions, both in the Divisions as well as at Corporate.
• Develop a plan for the successful implementation of the project recommendations.
• Develop system specifications and lead the effort to select a new vendor for the new integrated HR and Payroll System.
• Train key client stakeholders in Change Management and Process Improvement techniques in order to effect improvement initiatives across the organization.

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• Re-designed Human Resources, Payroll and Benefits Admin processes and organizational structures.
• Implemented a new Human Resource, Payroll and Benefit Model in anticipation of the new system.
• Developed and managed the HRIS RFP process.
• Produced a detailed implementation plan for the overall systems integration and implemented new enhanced management MIS.
• The program was successfully implemented over a 9 month period resulting in a direct operating savings of $1.5 million and dramatically improved HR service delivery.

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• Create a single direct reporting HR Organization, removing “dotted line” reporting among Divisions, Groups and Corporate.
• Centralize the Payroll function into the HR Organization.
• Transfer the Environment and Safety functions out of HR and into Operations.
• Transfer HRIS systems responsibility to IT.
• Standardize the Divisional HR Organization structure to ensure that time is spent on the same functions.
• Develop standardized HR processes at all levels of the organization.
• Create and standardize the Management Process and tools.

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The client had announced a plan to consolidate its 16 regional finance offices into its Eastern US headquarters and create a Shared Financial Services Center (SFS). SFS was to be a centralized organization servicing all 16 regions, 60 sales offices and 12 printing/distribution centers around the country. Employing 4,000 total staff, with the finance organization exceeding 200 employees, the project was expected to have a profound effect on the company.

The announcement had also stated that a significant downsizing was expected as a result of the centralization. There was a great deal of skepticism throughout the company, as it had an inconsistent track record with the implementation of previous change initiatives. The client’s senior management team engaged the LoBue Group to execute this centralization effort.

According to the client, the project team (and LoBue Group in particular) was widely recognized as having achieved the “impossible.” With a 44% FTE reduction, the Shared Financial Services project was by far the most successful large-scale reorganization in the client’s history.

The project team developed a total of 127 detailed process and organization related recommendations and built capacity plans for each department, projecting a FTE reduction of 44%. The team also developed a detailed regional office consolidation project plan comprising some 300 tasks. At the conclusion of the program, two pilot regions had been consolidated, the run rate savings were on track and LoBue was contracted for an extension to manage the roll-in of 14 remaining regions. Some of the key recommendations were:

• To streamline order processing and eliminate non-valued added work on 77% of all orders reducing the error rate from 25% to less than 2%
• To redesign the billing process, reducing the cycle time from 5-7 days down to 24 hours
• To implement a purchasing card system, thereby reducing travel and expense processing work from 40,000 transactions per year to less than 1,000
• To reengineer the production release process to eliminate the need for human intervention on >80% of all jobs
• To reengineer the attendance tracking process to eliminate the need for regional payroll department staffs
• To streamline the payables process and reduce the amount of work by 50%
• To redesign the payroll and compensation processes to eliminate 25% of the workload

The above recommendations were validated during piloting and migrated to the entire organization during the roll-in of the 14 regions.

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The bank had just gone through reorganization at the upper level less than one year prior to the commencement of the project. The new president wanted to maximize efficiencies and review processes. The client was being monitored by the office of the Thrift Supervisor. LoBue Associates was hired to review and justify expenses and current operating procedures.

Due to process improvements, the customer service department was able to spend more time servicing customers. The introduction of peak and part-time staffing mixes enabled the branch system to provide more tellers to service customers, which resulted in lower staffing costs and a reduction in customer wait time. Reorganization allowed the customer service area to continue to reduce the number of service representatives needed at the banking center, which enabled the bank to save $4.5 million annually.

The client now has the ability to continue to improve the bank’s operating procedures and to reap the benefits of expense reduction. The bank has more measurable criteria to aid management in discovering potential bottlenecks and improving customer service through the empowerment of bank personnel and the elimination of redundancies.

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• Redesign mortgage origination processes.
• Obtain Fannie Mae approval for the reallocation of duties.
• Reorganize the appraisal process and establish dispatch capability.
• Right-size the staffing requirements of the banking centers.
• Provide management analysis techniques to measure productivity.
• Rationalize and collapse redundant functions throughout the organization.
• Centralize customer service capabilities and restructure processing areas.
• Introduce peak-time and part-time staffing mixes.

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The mortgage processing area of this savings and loan was faced with dynamic and rapid growth through both acquisition and merger, creating inconsistencies and a lack of continuity within both the archival storage facility and the mortgage file facility. LoBue Associates was hired to identify and report the opportunities for organizational and process improvement in this area. Specific objectives of the program included:

• Establishment of appropriate management control processes within the permanent files facility.
• Rationalization of the processes associated with the file room as they applied to input/output controls, current systems and filing methodology.
• Evaluation of the current facility in terms of physical layout and future adequacy

• Developed standardized procedures for archiving documents.
• Improved processing and inventory controls. Developed standard forms for all activities.
• Provided client with a complete facilities model.
• Organized a task force to address each issue based on implementation plans that LoBue presented.
• Implemented 24-hour turnaround standard for file requests.
• Developed new functions without increasing staff.

• Clarify roles and accountability, separate archival box storage and mortgage file facility functions.
• Allocate costs to user departments based on a standard methodology, representing true usage of facilities, staff and service.
• Develop a comprehensive management process program that incorporated a detailed daily MIS to track all user requests to resolution.
• Create an archive task force that represented users and the record center to translate retention policy into procedure.
• Evaluate alternative media use for records retention, including microfilm and microfiche.
• Establish an inventory control system that would accurately record and track the contents of the mortgage file facility.

The client needed to develop new methods of operating in order to maintain its leadership position in a rapidly changing market. The company reached the stage where it was necessary to scrutinize the manner in which it conducted business in loan origination, processing and servicing. Greater efficiency and reduced costs were needed along with improvement in the quality of customer service. Continued success would require creative products and protection of profit margins. The client was also contemplating a possible sale of company.

• Direct expense reduction of US $8,700,000 and capacity to absorb an 80% increase in volume.
• Reorganization and improved business processes resulted in reduced staff of 120 FTE.
• Establishment of a National Sales Department and sales training program to implement a focused sales strategy.
• Product Marketing group established to maintain leadership in new product development and time to market.
• Implementation of formal management process.

The entire business was redesigned, including a realignment of the organization to increase customer service, resulting in dramatically increased financial performance. Business moved from a $4 million loss to a $23 million profit in 24 months.

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Place the client in a strategic position where ongoing success would be better supported by an organization structured to respond to the demands of the marketplace by:

• Manage the customer’s experience from a centralized position.
• Improve product development process and offer new, high quality, and cost effective products.
• Improve ability to respond to changing market conditions to maintain its market dominance.
• Develop the capacity to increase business volume by more than 80% without increasing staff.

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The client, a vegetable oil company, was experiencing high levels of resource waste and poor quality control.  In addition to this they had unstructured selling and marketing efforts coupled with poor collection efforts.  Lack of an effective Management Information system led to poor decisions in purchasing, staffing and inventory management.

These factors contributed to overall inefficiencies in the manufacturing, marketing and distribution of their products.  Additionally, with the recent lifting of import duties, the market competition was dramatically increased.

• Increased labor and plant utilization through better management of production and filling processes.
• Reduced manufacturing costs through higher production throughout using existing resources.
• Enhanced customer service levels through direct sales and service efforts focused on high value customers and dramatically improved “order to delivery” times.
• Improved management decision making through a comprehensive Management Information System and review process.
• Reduced investment in raw materials 40% with an aggressive materials management program.

Within the year the operation went from a USD loss of $1,500,000 to a running rate profit of USD $3,000,000.

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• Re-engineer the organization to maximize production efficiency.
• Establish export marketing methodology and rationalize domestic sales efforts.
• Aggressively manage accounts receivable

The client needed to standardize and consolidate lending activities and practices that varied from division to division and from state to state. This would position the bank to be more competitive with its peers and to more easily assimilate future acquisitions into their day-to-day operations. The underlying financial goal was to eliminate $400 million from the annual costs of the company.

Through the implementation of the recommended programs, the client was able to reduce manpower costs by over 15%, improve service quality, provide management with the required strategic information for decision making, and position themselves for dramatic growth and a national retail banking presence. Direct operating costs were reduced by $200 million in 24 months and $400 million was forecasted within 24 additional months.

Provide consistent, competitive, profitable service to small businesses by

• Transferring existing small business banking customers from the commercial banking portfolio to the business lending group and developing a marketing support structure to grow the business.
• Consolidating and streamlining underwriting, customer service, operations and collections into one national entity; and creating a national loan processing system.
• Establishing portfolio management centers to eliminate the credit administration burden from sales staff.

Consolidate and streamline back-office functions of retail lending lines of business by

• Consolidating operations and servicing as one national entity.
• Developing a workstation environment within loan servicing.
• Developing service level agreements between loan servicing and each business partner.
• Instituting a Management Information System for loan servicing and its business partners.

Consolidate and streamline the indirect lending origination and collection functions by

• Separating indirect lending activities and functions from direct lending; and consolidating data entry, collections and recovery functions into four regional functions.
• Developing standardized desktop procedures, nationally graded job descriptions and key performance indicators for all operating units.
• Making a major investment in technology.

Consolidate and streamline direct lending operational functions to support the establishment of a national retail lending business by

• Reorganizing and collocating the direct underwriting and phone lending operations at four regional locations.
• Improve systematic controls and capabilities to increase auto-decisioning.

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The client was charged with meeting a five year business plan, with growth projections for investment portfolios and managed assets, as well as providing a worldwide branch network with remote access to portfolio data. The current system was inadequate to support product growth in terms of volume, statement presentation and the required analysis. Federal Bank regulators cited the lack of formal operating procedures and compliance standards as exceptions.

• Completed system implementation bringing new system into full production.
• Produced written procedures to satisfy Federal Bank regulator exceptions.
• Implemented a simplified systems architecture resulting in increased productivity.
• Assisted in outsourcing RFP negotiations resulting in lowering successful bid by 20%..
• $1,650,000 savings per annum associated with operations support and portfolio management.

Successful implementation of the new system eliminated costly processing runs. The newly automated environment, combined with documented procedures and processing standards, presented a downsizing opportunity and satisfied federal examination requirements. Capability for a 50% volume growth built into the process.

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• Perform functional analysis of operations and management support areas to determine appropriate division of labor and establish clear operational and business performance accountability.
• Evaluate both monetary risk and data quality to ensure proper management controls.
• Rationalize all processes relating to asset management accounts.
• Develop desktop procedures based on rationalized flows.
• Design preliminary staffing model to address support issues.
• Develop detailed conversion plan to address new system production problems.
• Evaluate processing alternatives and determine the cost/benefit trade-offs of outsourcing via an outsourcing/private label study.
• Develop a remote branch inquiry pilot.
• Institute structured project management methodology.

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