Our Workflow Masterclass series tackles the complexities of Business Process Improvement (BPI) for different verticals.
A company with fast and efficient business processes will benefit from more productive and efficient employees, and likely realize considerable time and cost savings. In the financial services and banking industry, process infrastructure is essential and can have a big impact on everything from the day-to-day efficiency of a company to its customer service success. Loan applications, invoice processing, expense approvals, governance and compliance are just a few examples of these financial processes that too often still rely on people and paper.
In this post, Leslie Behnke, vice president of process improvement and service quality at TD Bank Group, talks about Six Sigma and how Nintex workflow helps TD Bank’s 85,000 employees improve their finance and banking processes.
One of the most well-known practices for improving processes is Six Sigma. Introduced by Bill Smith in 1986, Six Sigma is a data-driven methodology for eliminating defects and optimizing processes.
Six Sigma changed traditional quality levels that measured defects in thousands of opportunities. Instead, Six Sigma measures defects per million opportunities. The statistical modeling of manufacturing processes (which can be described by a sigma rating) indicates the percentage of defect-free products it creates.
A Six Sigma process is one in which 99.99966% of all opportunities are expected to be free of defects – which equates to around 3.4 defective features per 1,000,000 opportunities. So, three or four defective mobile phones in every 1,000,000 produced, or three or four customer calls with waiting times longer than one minute, for example.
Six Sigma projects feature five phases:
Each phase contains a set of tools and techniques that act as a guide for the improvement process from start to finish.
Since Bill Smith developed it, Six Sigma has grown and spread across many industrial sectors. Its aim is to improve the quality of an output of a process by identifying and removing the causes of defects and minimizing variability. It does this through a set of quality management methods – mainly empirical and statistical – and creates a special infrastructure of experts within an organization.
Each Six Sigma project carried out within a company follows a defined sequence of process improvement steps and has specific value targets, including reducing the process cycle time, reducing costs and increasing customer satisfaction.
How Does TD Bank Group Improve Processes?
Here are insights from Leslie Behnke:
What is the history of TD Bank’s Lean Six Sigma program?
“Our lean Six Sigma program started in 2005, with a focus on improving the customer experience and reducing operating expenses. At the time, most people didn’t know Six Sigma or Lean Six Sigma, but there was some interest there, so we provided lean methodologies to TD executives who were willing to experiment.
“We focused on demonstrating the value of Lean Six Sigma techniques – showcasing how it could deliver process efficiency and an improved customer experience. Because there were so many opportunities for this – which we called ‘low-hanging fruit’ – the team was initially very successful and generated $2 million in annual benefit. This early induction created some early adopters at the executive level and was the beginning of building the desire to expand the BPI practice.”
How has it evolved?
“In order to take that benefit and take BPI to the next strategic level, TD wished to find a senior executive leader with global experience in both operations and Lean Six Sigma. And after conducting an international search, the company found me. We’ve grown from just three Six Sigma practitioners in 2005 to now over 120.
“Since then, we’ve noticed significant benefits that have been delivered in cost savings areas as well as enhancements to customer experience.”
What key results have you achieved?
“The general banking economy has been in an expense reduction paradigm, so it’s all about how you can be effective and efficient. But our results have been strong: our accumulative results have been in the hundreds of millions of dollars, and we’ve witnessed a 50 percent increase in project benefits year over year. Six Sigma projects have enabled TD to continue to provide top-notch service to our customers.
“We’re looking at the most cost-effective and efficient processes for our customers and guaranteeing a risk-free environment.”
What’s an example of process automation yielding results?
“We performed analysis of our processes from the perspectives of customer, efficiency and risk. We discovered that more than 70 percent of applications were paper-based, and of those, 30 percent to 40 percent contained errors and required some form of reworking. Applications got stuck in one data-verification step for more than five days before actually being processed; back-office staff were having to enter data manually from several systems into the workflow. So, we’ve experimented with rapid-automation approaches that has so far been met with positive results.
“These trials have proved to us that automating end-to-end processes – which used to take some 12 to 18 months, maybe more – can now be performed in a timeframe of around six months, and also with half the investment that is typically required.”
From your experience, what are important principles for automating operations?
“I would say for us, it has been a case of considering the right business priorities that will simplify the process; using multiple integration technologies and approaches; and preparing departments for agile development methods.”
What’s next for TD Bank Group and process improvement?
“TD Bank Group is on a perpetual journey of continuous improvements. We’ve had great results in the past four years but there’s still more work to be done. For us specifically, our frontier is to continue to expand and to hit 100 percent of our business across a very large organization. We have 85,000 employees globally, so we still have a few pockets and some areas that we want to engage with driving continuous improvement. We’ve begun more of an end-to-end view to our processes, but we want to continue to work on eliminating pockets and silos across our organizational boundaries.”
Start a free trial of Nintex today and see how your finance teams can benefit from improved processes.