Operations Management in UK Financial Services

Introduction
Performance Management in the financial services industry is vital and well supported by the suites of Corporate Performance Management software that enable these companies to budget, plan and report in an accurate and timely fashion. Underpinning successful performance management is the need for predictable and controllable day to day operations management, both front and back office. Much has been written in the media about the use of tools to achieve this in call centres in businesses today. This report is based on research was carried out to investigate the extent to which software applications are used to monitor and measure the effectiveness of handling customer business – focusing on the back office operations and specifically addressing organisations in the UK.

Operations Management is a critical business task
All the organisations that were interviewed set and publish achievement metrics against customer service level agreements, with 93% setting different targets for different types of customers.
95% of organisations interviewed set and publish performance levels against targets for operational staff and use both team and individual measurements although monitoring individual performance is more difficult and given a lower degree of importance.
It is interesting to note the types of measures that are used and the research found that there is an increasing focus on measuring the quality of work alongside the expected measures of costs and speed of processing work (figure 1). Although quality of work is ranked as being of the highest priority, the performance targets set for both team and individual measurement still put productivity above measurements of quality and good customer service. This could be because productivity is easier to monitor or because, in reality, cost measurements are associated with the level of work throughput.
Measuring staff satisfaction is given a much lower priority in general, with only 24% of organisations stating that this measurement is very important for teams, 11% for individuals.
There is evidence however, that organisations are aware of the costs of re-work and of handling customer complaints. When asked about establishing a return on investment for operations management systems, many organisations are attempting to include some measurements of the costs of rework, (figure 2).
There is some weight given to measuring staff satisfaction and linking this to financial returns for the business. Quocirca believes that it is important to consider the impact of systems on staff satisfaction and that any attempt to apply technology to improve operations management should take account of the way in which the system impacts on the staff dealing with customer business.

Production control and continuous improvement
Operations management is often associated with production of physical goods and methodologies such as lean and six sigma are used to address quality and efficiency improvements. These approaches study the work stations, the efficiencies of moving work from one to the other, space and time improvements and so on. The philosophies can arguably be applied to moving paperwork through an office, each work station being a person with specific skills. Quocirca tested this with the Operations Managers in the survey and a surprising 100% say they operate a philosophy of continuous improvement, with 66% using either lean or six sigma approaches.
Use of these methodologies has changed since they were first introduced by Frederick Taylor, when employees were often considered to be a liability, with organisations applying streamlining and lean manufacturing principles to keep employee costs down. The approach to increasing productivity was based on a carrot and stick approach - reward success, punish failure - together with making the tasks quite granular so that individuals could become extremely quick and skilled at a limited set of tasks. Today employees are considered to be assets – the only appreciating asset in many organisations. Organisations use words like engagement, empowerment and job satisfaction when talking about their approach to employee productivity. And in general, although it is easy to forget that this is not true of all employees, staff do like to feel that they can add value and participate in decisions that may affect them.
Gaining the buy-in of employees is an important factor when introducing systems to monitor staff productivity and the quality of work being done.