Change and Improvement of Sarah Bank - Essay Example

Initiatives for Change and Improvement: Sarah Bank BY YOU YOUR ACADEMIC ORGANIZATION HERE December 31, 2007 Contents Executive Summary……………………………………………………………… 3 Problem Identification……………………………………………………………. 4 Analyses…………………………………………………………………………… 6 Environmental Analysis…………………………………………………. 7 Organizational Analysis…………………………………………………. 8 Competing Values Framework…………………………………………. 9 Alternatives………………………………………………………………………... 10 Action Plan and Implementation………………………………………………… 11 Bibliography……………………………………………………………………….. 14 Appendices Executive Summary The contemporary banking industry is wrought with increased competition. Hence, it is the responsibility of successful banking facilities to provide increasing value and convenience for their customers and proactively work toward efforts of modernization. These modern efforts often include changing internal policies to create a more flexible workforce, incorporating various web-based banking technologies, and streamlining measures for budget and cost reduction initiatives. SARAH bank is no exception to this rule. Upon identifying various negative elements of current policy regarding cash ordering systems, an assigned project team at SARAH proposed a somewhat radical change to internal processes and the much-required implementation of web-based, convenient cash ordering technologies. Despite the triumphs associated and a series of positive outcomes, failure to identify discrepancies in the implementation (including lack of on-the-job training and a variety of system glitches) have caused tremendous problems with the adaptation of the new cash ordering system. This report identifies the nature of these oversights and further proposes a step-by-step action plan for implementing change associated with the new, integrated technologies. Through extensive analyses, it was determined that employee training, feedback, and the creation of a culture valuing continuous improvement were necessary to streamline the new project at SARAH bank so as to provide increasing value to the organization and its customers. Initiatives for Change and Improvement: Sarah Bank Problem Identification: SARAH Bank is a flexible and progressive organization, focusing on contemporary leadership practices and continuous improvements both in terms of internal processes and customer relationship management. The vision of SARAH Bank is to emerge as the “Customer’s First Choice Bank”, however in order to make this goal a tangible reality, SARAH required significant strategic change which involved restructuring the organizational hierarchy and the adoption of new business models and internal philosophies. The organization is now heavily engrossed in the process of streamlining business functions to best accomplish its vision, including new acquisitions and the development of new products and services. These aggressive objectives had created a significant business challenge, specifically involving the efforts in adopting new products and associated technologies. The organizational unit responsible for the overall supply of cash to its branches and corporate clients within the State determined the necessity for a “reengineering process”, which involved SARAH executive leadership overhauling its process for ordering and shipping cash related to new software technologies. Preliminary analyses of the potential impact of this new strategy and expected return on investment were conducted, with SARAH executive appointing an individual to champion the reengineering strategy. In addition, a project team was developed to identify a new series of internal capabilities related to cash ordering. Preliminary investigations revealed a tremendous opportunity for improvement related to the pre-existing sequence of events involved in cash ordering. A flowchart was developed by the project team which identified the following sequence of events: 1. Client/Branch determines the amount of cash/coin by denomination required. ABM money, Foreign Currencies and CDN dollars are separate orders. Order form(s) by “Cash Type” are completed and faxed to Cash Centre. 2. Once the Cash Centre has obtained the fax, one agent is required to enter the order into the computer program manually. The second agent was required to check input and the third agent was required to contact the client/branch via the phone or fax to confirm the order was completed. 3. If the client/branch neglected to order the correct amount and needed to add-on to their existing order, the same process would be followed and the old order would become obsolete and the revised order needed to be re-entered. This was determined to be a non-value-added sequence. 4. If the client/branch neglected to fax their order on time, based on required deadlines, manual “last minute parcels” needed creation. Quite often additional armored car costs were incurred as a result. 5. The Cash Centre created cash parcels by the confirmed order. Each “Cash Type” (ABM Money, Foreign Currencies, US and CDN dollar) parcels were created separately per client/branch. The costs of additional armored cars as well as the necessity for multiple staff input into the electronic systems required a radical change of processes in order to streamline this function and delight the external client. The aforementioned historical sequence of events for cash ordering greatly diminished SARAH capabilities for cost-savings, hence the project team was required to analyze these processes and propose a more enhanced series of internal capabilities for these cash-related functions, including technological and procedural changes. Technological changes involved the purchase of new computer software and a new Cash Ordering program for nation-wide branch implementations. The program became a web-based system with the long-term vision of corporate clients maintaining the capability to place cash orders via the Internet. Procedural changes were significant: 1. Only the branches were to be converted to the new Cash Order program the first year. 2. In the Cash Centers, the use of three agents would be narrowed to one agent for cash orders from the branches. 3. Late orders from branches would not have to be re-entered. There were immediate, significant benefits as a result of these new initiatives, including cost savings stemming from less parcels requiring multiple armored cars and the ability for the branch to place one order for all “Cash Types”, reducing the volume of parcels and the costs associated with additional parcel weight and number of delivery trips. With all of these plans and agreements in place, that was the extent of the reengineering process. Unfortunately, there was no guidance or analysis conducted regarding the skills and competencies of employees to operate the software efficiently, thus on-the-job training, employee communications, feedback from test pilot sites, and system glitches were not corrected or even available prior to the software installations. Hence, employee development as competent Cash Ordering professionals was significantly lacking at SARAH. This required a series of analyses pertaining to the goal of improved organizational efficiency in order to make this new system of Cash Ordering work effectively. Analyses: Because SARAH expectations for positive return on investment were required in all aspects of the project, identifying environmental and organizational weaknesses which proposed challenges to the business project required extensive analyses. From human resources to the external competitive environment, the project leaders identified the following factors which were potential contributors to the problem of the successful integration and adaptation to the new Cash Ordering system: Environmental Analysis: The banking industry faces considerable competition, with the majority of regional banking facilities working toward similar objectives for streamlining functions in the pursuit of seizing a higher share of the customer market. When competitive entities in this industry adopt new technologies, especially those involving the corporate client and cash ordering, implementation efforts require identification of system glitches (or other hindrances to effective implementation) as part of the project scope. Any failures in software integration which may be transparent to the external client should be corrected prior to the final launch. Especially in difficult economic times, the importance of providing excellence in customer support and convenience is paramount to achieve corporate financial goals. Though the Cash Ordering project team at SARAH was competent in establishing a new framework for this process, failure to adopt a contingency approach to web-based cash ordering made some of these system failures obvious to corporate clients. This represented a sizeable failure in relation to fulfilling the bank’s overall mission of being the customer’s first choice banking facility. Competitive entities in the local region have been more successful in this technological arena, thus the SARAH project team created a scenario where competitor efforts for web-based, customer-focused systems outperformed that of SARAH. This required immediate changes to the aforementioned processes of cash ordering so as to combat competitor modernization efforts whose electronic systems were more enhanced, allowing them to potentially seize market share. In the contemporary banking environment, convenience is a primary element to sustained growth and economic prosperity (Martin & Janssens, 2004). This acknowledgement generally involves the social environment in relation to customer viewpoints surrounding the banking industry and the services their selected banks can provide. The modern business organization, in relation to corporate clientele, is categorized by a complicated and diverse business environment which requires executive leaders to remain focused on strategic intentions. Performing to corporate expectations for profitability and productivity requires streamlining business practices to reduce the demands on leadership in relation to time investment (Nickels, McHugh & McHugh, 2005). As such, when dealing with corporate banking, convenient and easy-to-use Internet-based banking is a desired attribute when selecting the bank which is most appropriate for their business’ needs. SARAH project team failure to identify areas of internal training, assessing feedback from test pilot sites, and system glitches provided the opportunity to dissuade corporate clients from maintaining long-term relationships with SARAH due to the new software’s potential complications. Hence, despite the anticipated return on investment for the cash ordering technologies, the potential loss of corporate clientele due to perceptions of diminished banking convenience could have served to overshadow the tremendous accomplishments at SARAH in streamlining internal cash functions. Organizational Analysis: The organizational staff at SARAH, from executive to subordinate employee, largely consists of dedicated workers willing to adapt to new internal processes. SARAH bank, in recent years, has replaced its long-standing mechanistic structure, where all decisions are implemented at the highest levels of the hierarchy (Landy & Conte, 2006), in favor of a more progressive, human resources-focused organization. This represents a significant strength at SARAH as it creates a more flexible, people-focused banking facility in which leadership considers and applauds suggestions for improvement from its subordinate population. This creates a more harmonious organizational culture which strives to fulfill the psychological needs of SARAH staff members, making the majority of workers more receptive to change initiatives. The outcome of this cohesive organization can be witnessed by renewed commitment to excellence in customer service and overall staff productivity in all organizational units. This harmony provides the opportunity for enhanced customer relationships. Lack of on-the-job training associated with the new cash ordering technologies had been identified as a tremendous problem for SARAH, however the cohesive people-focused environment allowed for considerable support from staff members for the receipt of training in these problem areas. Competing Values Framework: The paradox of focus exists at SARAH bank stemming from a leadership focus on flexibility and growth as well as an emphasis on human resources and internal cohesion. At the same time, emphasis on internal control and stability is a primary element to satisfying the bank’s vision. This tends to represent conflicting values in the Competing Values Framework as human resource focus tends to deny elements of rigid internal controls (Landy & Conte). This lack of congruency at SARAH is directly associated with the failures of the project team to identify areas of improvement and contingency in the new cash ordering technologies implementation. As a relevant example, the Internal Process Model within the Competing Values Framework focuses on improving communications and providing internal stability (Quinn & Rohrbaugh, 1983). Feedback from test pilot sites represents such communication which is vital to implementing a new software system, however project team focus on efficiency and cost savings somewhat negated the aspects of establishing proper communication prior to launching the new cash ordering system. In addition, under the Human Relations Model of the Competing Values Framework, virtually all aspects related to the human contribution were under-represented by failing to identify the need for training and improving the competencies of those who would be working with the new software every day. This tends to represent a series of conflicting values, with focus on productivity, budget, and return on investment in favor of the less-transparent elements of human resources. Though the company remains focused on improving human relations, these elements were largely missing in the newly-proposed business model for efficiency, leading to initial software integration failures. Alternatives: Because the focus of the project team was to streamline process and cost associated with cash ordering, the only feasible alternative involved changing internal activities without implementing costly software packages. This proposed alternative measure would have involved identifying steps to identify new process improvements. For instance, the original flowchart of work processes involved three agents responsible for processing faxed cash orders from customers, as previously identified in the problem identification section of this report. Without the implementation of the new software program, changes to this process could have been altered to minimize labor-related elements of cash ordering and streamline this particular function. As such, an alternative scenario would be to appoint a singular individual who would handle the fax receipt, perform the data entry, and further contact the client/branch without the need for two additional agents. In order to make this alternative a success, a revision to the job description for agents in this role would have been required, which would further identify their role in making manual changes to amended cash orders. The internal capability for this plan would have been feasible based on staff labor availability and the flexibility which exists at SARAH in relation to job function. In addition, this newly-assigned individual would have taken ownership of maintaining contact with the client/branch in an attempt to minimize late faxed orders and reinforce the importance of prompt cash ordering. The aforementioned alternative would have satisfied the objective of streamlining the cash ordering process, however these efforts would have required reorganizing the structure of labor at SARAH and would have likely been completely obscured from the customer perspective. Though this alternative measure would have likely satisfied some elements of cost savings, the main vision of the bank is to become the Customer’s First Choice Bank, thus despite the internal capability to reject technological implementation in favor of making minor staff changes, gaining further corporate clients and delighting the existing client base could not have been accomplished. This alternative scenario would have neglected the new web-based software opportunities, thus sacrificing convenience for SARAH customers. The end result would have satisfied cost savings, but negated modernization and customer focus. The proposed benefit of the alternative would be minimizing the necessity for intensive training. Action Plan and Implementation: Because training on the new technologies is crucial to its overall success, the following short- and long-term objectives were proposed to combat the problems associated with new technology implementation. These changes will require one to two years to complete the reengineering process, with several steps moving faster than others: Step 1: Identifying and planning the change - Though most of the workforce is flexible and willing to embrace change initiatives, there will likely be staff members who are resistant to change and may become negative and counter-productive. It is likely assessment that many in the organization will perceive a threat to their position, wondering if they will continue to be valued for their current skills and historical achievements in the historical cash ordering processes. Those who are excited about the changes and willing to adapt will be appointed as “change agents” to promote learning across the organization and help others embrace the change. This will require a human relations approach, accomplished through addressing various employee concerns and offering leadership support. The focus of the bank’s efforts will be targeted at the assigned change agents who will assist leadership in effectively dealing with those who resist or are counter-productive. It will need to be clearly emphasized that this new system is the future of SARAH and will not be abandoned. Step Two: Developing technical skills – On-the-job training on Microsoft Vista will be immediate, as technical skills are essential to making the new cash ordering system a viable success. Employee training sessions, review of policy and process manuals, and follow-up with the project team will be necessary. The organization of conference calls among other Cash Centers and sharing “best practices” will increase productivity and provide necessary support. Step Three: Communication is key – To assist in understanding, communications regarding the new project will need to be kept simple, using analogies and metaphors to engage employee support. Consistently modeling new behaviors is a success factor to getting all staff members engaged, as seeing the leader’s behaviors in action will assist in helping them understand and learn the new behavior. Step Four: Encouraging and Assessing Feedback – Gathering employee feedback is a necessity in understanding how the team is progressing. Staff members will need to have personal development plans in place, creating the opportunity for routine meetings to assess the pace of their development and identify their strengths and weaknesses. This will encourage active participation and recognize/applaud employees for their contribution to fulfilling the bank’s vision. Step Five: Changing Culture – Creating a culture of continuous improvement involves encouraging employees to assist in identifying system glitches, accounting issues and possible service improvements. This creates employee empowerment and the perception of autonomy, inviting them to experiment and test new methods of adding value to the new technological and process changes. Rewarding individuals and reinforcing the win-win potential of the new technologies and internal changes is a vital tool to satisfying employee needs from a human relations perspective. Successful employee efforts at satisfying contributions to vision should be recognized and rather publicly heralded so as to promote positive change from those who may initially resist the proposed action plan. Long-term, however, there may be individuals who do not meet the new skills and competencies required to meet the vision, thus re-staffing will likely be required. This will be accomplished by measuring tenure and promotability, followed by thorough succession planning. Using talent grids and charting current competencies within the unit will identify strengths and gaps in the organizational team so as to forecast areas requiring future re-staffing. Identifying key roles and various expertises will improve the team methodology at SARAH bank, assisting in attaining the vision of Customer’s First Choice Bank. Bibliography Landy, Frank J., and Jeffrey M. Conte. Work in the 21st Century: An Introduction to Industrial and Organizational Psychology. 2nd ed. Blackwell Publishing, 2006. Martin, James W., and Olga Janssens. Identifying CSFs: Critical Successes in Finance and Investment. 2nd ed. Blackwell Publishing, 2004. Nickels, William G., James M. McHugh and Susan McHugh. Understanding Business. 7th ed. McGraw-Hill Irwin, Toronto, 2005. Quinn, R.E., and J. Rohrbaugh. “A spatial model of effectiveness criteria: Towards a competing values approach to organizational analysis”. Management Science 29, no.3 (1983): 363-375. Appendix A: Competing Values Framework Source: Quinn & Rohrbaugh, 1983. Read More