Data-Driven Process Refresh can boost margins

With a deep dive into data and analytics, common business activities can be broken down and recreated to address risks and other pain points that drag on the bottom line. Such an initiative might be especially helpful now, as companies reimagine work following pandemic-related disruption.

Before COVID-19 prompted shifts in how work was performed, an established financial services organisation took stock of its business practices dating back decades and decided it was time for a change. With people scattered across more than two dozen office locations that had been added or acquired piecemeal, efficiency and effectiveness had long since given way to tradition and tolerance.

The organisation dispatched a team to study its various processes and determine how they could be optimised. The team employed statistical time and motion studies and process mapping to analyse operations, technology, labour, and real estate. The analysis led to the development of a plan to redesign and streamline operations, eradicating redundancies and waste.

After implementing the plan to optimise its processes, the organisation reduced its offices to three locations and deployed new technologies to digitise and automate certain areas of the business. It also reallocated its headcount, with some staff members transitioning into newly created planning positions. Through this effort, the organisation not only improved current functions but also positioned itself to prepare for future growth.

“Process optimisation is an intensive, data-driven analysis of how an organisation or a specific area within an organisation operates to determine how it can achieve improvements,” says David Wallis, a partner with Deloitte Financial Advisory Services LLP. “With the rapid technology advances we have witnessed, almost any observable process in any kind of organisation can be systematically analysed, measured, and likely improved.”

Now that companies are recovering from shutdowns and stay-at-home orders and contemplating what their next normal state should look like, process optimisation efforts may be even more important as a way of defining how work can be done. Organisations can leverage deep data sets to help determine what has worked in recent weeks and what may need to change going forward.

Optimising Compliance Activities

Many organisations across virtually all sectors continue to seek new ways to reduce costs, increase revenues, manage risk, and enhance the quality of products and services. Given the evolving complexity of compliance requirements across the marketplace, processes used to track and manage regulatory compliance often are candidates for optimisation, says Wallis.

As an example, consider the various requirements associated with cell phone towers. Federal, state, and local authorities generally have different standards or rules governing cell tower construction and management. Compliance requirements often develop distinctly from one another, so organisations that erect towers may have established many different layered, duplicative activities to comply with individual requirements.

“Some organisations struggle with how to manage multiple requirements on a longterm basis,” says Wallis. “A process optimisation initiative can capture and analyse relevant data to help them determine an efficient, effective approach to compliance. This often reduces cost and level of effort while also identifying ways to reduce risk.”

Beyond the compliance function, optimisation efforts might be employed to identify opportunities to improve business processes that need an update to meet new regulatory requirements. Initiatives also can help address operational risk, particularly where organisations may recognise threats requiring mitigation but are uncertain how to do so effectively, adds Wallis.

Consider an organisation that experiences a cyber or privacy breach that may urgently need to reconsider its business processes. The objective of such an undertaking might include not only achieving compliance, but also leveraging the change initiative to improve operations or increase efficiency, observes Wallis.

Some organisations might also engage in process mapping activities and data collection to determine the extent to which employees are complying with internal policies and procedures, especially when gathering and handling data subject to privacy or other regulatory considerations, says Wallis. Such data can be collected across an enterprise and categorised in several possible ways to assess compliance.

Beyond Compliance, Benefits Abound

A project to optimise processes might begin with a mapping exercise to document any current-state, underperforming processes—and then continue with data collection to observe the processes and their cycle times. This exercise can involve some combination of interviews with people who own or work in the relevant functions as well as time and motion studies, keystroke monitoring, surveys, audio or video monitoring, collection of vehiclebased GPS data, and the use of wearable tracking devices.

A next step might involve defining an optimised, future state process that addresses pain points and their respective root causes. The design might be based on research into benchmarking, competitive knowledge, leading practices in the organisation’s industry or sector, or any combination of these.

Change management may also be an important element of the effort to move the organisation from current to future state. Once the process change has been implemented, continual tracking of KPIs through real-time dashboards can provide insights into how effective the new process is and whether further improvements might be in order.

With technologies such as data analytics and robotics software, process optimisation has advanced well beyond the use of clipboards and stopwatches, says Kyle Richardson, a senior manager with Deloitte Risk & Financial Advisory, Deloitte & Touche LLP. “By leveraging newer tools to gather and analyse internal and external data, organisations can gain better visibility into where their processes are ripe for improvement and then determine an appropriate path to take,” he says.

The benefits that often flow from an optimisation initiative might be as varied as the processes being transformed, notes Richardson. “Organisations might increase regulatory compliance and improve risk mitigation,” he says. “They might also notice improved productivity and agility, cost efficiency, enhanced revenue, greater visibility into factors affecting performance, improved customer satisfaction, increased employee engagement and satisfaction, or improved technology integration.”