National Australia Bank Case Study


NATIONAL AUSTRALIA BANK BANKS ON PROCESS MATURITY WITH MICRODYNAMICS

Background

NAB business process were documented using multiple tools and standards, with multiple versions of the same process documented by different stakeholders, stored in disparate repositories, with a predominantly functional and product driven focus.

The challenge

NAB’s aims were to

  • Simplify its processes and make it easier for NAB to do business with NAB through an integrated and leveragable view of NAB’s (end-to-end) processes.
  • Manage the impact of business change of their processes enabling NAB to:
    • Reduce the cost and business risk of implementing process improvement and regulatory compliance initiatives:
    • Reduce the rework and effort in recreation of process documentation; and
    • Avoid duplication and redundancy of process information across the organisation.

Further objectives were to provide unit managers with the skills to run their business area; reduce waste; and ensure quality output and consistent customer service.

The solution

The combined iGrafx toolset/MicroDynamics services offering was chosen as the NAB Australian Region’s preferred Process Modelling Tool and Provider.

MicroDynamics partnered with NAB to implement the iGrafx business process analysis toolset to identify activities which are integral to the strategic direction of the Bank’s operations, using a systematic approach to all process transformation activities at NAB. The project also implemented a central repository for capture and management of process maps and associated process documentation. 

The benefits

  • Changes to manual processes allowed nearly half as many staff to be twice as effective
  • Reduced risk
  • Meeting compliance obligations
  • Meeting quality control objectives
  • Motivated staff through recognition and reward
  • Reduced the rework and effort in creation of process documentation
  • Avoided duplication and redundancy of process information across the organisation.

The Customer

The National Australia Bank (NAB), one of Australia’s largest financial institutions sought to lift productivity across its operational units, while improving their output quality and customer service. This was to be process driven and managed by the Business Efficiency and Quality (BEQ) area.

Much of the output of a financial institution is more akin to a manufacturing business. The lending areas of the Bank, for example, produce vast quantities of highly technical and regulated documentation. But the majority of its staff carry out assembly tasks, such as collating mortgage documentation, which require no specific banking qualifications.

BEQ identified that its managers needed to be given greater operational skills to run their business areas, reduce waste, ensure quality and cut defect rates. And the Bank’s customers needed the same experience irrespective of where their contact points were.

BEQ also recognised that to reduce the risk and cost of planned automation projects it must first fix underlying operational processes.

Rather than adopting specific change methodologies such as Six Sigma for quality and defect reduction, or Lean for waste eradication NAB embarked on a broader Operations Management and Continuous Improvement approach.

BEQ went to the marketplace to find a tool to map the Bank’s core functional processes and to understand how they were carried out.

The Solution – MicroDynamics’ expertise combined with proven iGrafx toolset.

According to the Manager, Performance Delivery, Business Efficiency & Quality,“The MicroDynamics/iGrafx combination stood out from the crowd. MicroDynamics has a fundamental understanding of process, deep knowledge of the iGrafx product, and their training background would ensure our staff could maximise the potential of the changes being made.”

Health checks were carried out on the business;  this helped to identify the costs and bottlenecks; observations also identified how each area was managed; and evidence of recorded turnaround times, document production and error rates was collated.  Plans were then worked with managers to determine the key work processes to be mapped and the agreed approach to improvement.

Each touchpoint and activity from customer interaction through the organisation and back to the customer was identified using the iGrafx FlowCharter functionality.

The iGrafx Process module analysed bottlenecks and costs; how well the organisation was using its staff and other resources, and where staff should be transferred to get processes moving faster. The ability to run simulations prior to field execution via the Bank’s intranet was a critical element of the iGrafx solution.

Repository – With in excess of 20,000 items, ease of use is critical

MicroDynamics worked with NAB to implement the Bank’s centralised iGrafx-based repository with permission structures for authors and viewers and updating, validation and version control.

Ongoing support has included high level assistance with re-assigning ownership of objects; implementing regular review and validation cycles; maintaining the hierarchy of processes and sub-processes across the repository and managing department and resource models.

The repository provides a critical “one source of the truth” and over six years has grown to now store more than 20,000 process maps and related supporting documentation such as procedural manuals. Despite the huge size of this data library, ease of use and accessibility is ensured through its high level functionality plus MicroDynamic’s expert and highly responsive support and comprehensive training programs ensured its success.

Broader benefits of the repository are experienced by the Bank’s Risk area which uses a Sarbanes-Oxley (SOX) overlay to reduce its exposures and conform to international transparency standards.

Benefits – “Process mapping at the Bank has been hugely successful.”

“Variation was the enemy. But NAB now have strict quality controls. Furthermore it is interesting to note that the majority of the benefits achieved required little or not technology automation - they were purely process improvements.”

One example of the benefit of the program was that over a three year period, staff numbers in the Bank’s centralised lending area were reduced by nearly 40 percent, while productivity doubled. “Twice as much work was being done by 500 fewer staff; all this was achieved by changes to manual operations, prior to any automation.”

HR management has also seen significant positive changes. “We were rewarding staff on volume not quality of output. Now, with measurable performance criteria, we are motivating staff because they know that a good job will be recognised.”

Training – “Lifting expertise across the business.”

MicroDynamics conducted customised and comprehensive training programs across Australia throughout the partnership with the NAB.  

“MicroDynamics’ training capabilities have been critical to lifting consistency and expertise across the business. They understand how to get people working quickly and productively and they teach skills to individuals so they understand the cause and effect of their actions.”

Feedback has consistently confirmed the Bank staff’s appreciation of the high quality, relevant and well delivered training courses which “open up opportunities to improve our processes”.

Process maturity over time

“Process mapping in itself is no silver bullet – large organisations are complicated organisms with constantly changing parts and the search for improvement can never rest - however the iGrafx toolset should be an important component in any Continuous Improvement program. Knowing where to start and stop process mapping  and when to move to work instruction is the trick and MicroDynamics are experts in helping lines of business understand this."

“MicroDynamics’ value adding is an intrinsic part of the success of Bank’s drive towards a process driven organisation and we will continue to capitalise on our investment and intellectual property assets”.

“NAB’s cost-to-income ratio is now one of the best in the business – MicroDynamics has become a vital cog in our efficiency wheel.”