Time is money: fact or fiction?
We are often asked about the specifics of Six Sigma being applied to the daily operations of a financial institution. The common perception is that cycle time reduction is the panacea for complications facing the sector. While this may hold true, it is also true that cycle time reduction is effective to the point where identifying and eliminating the rework can directly be correlated to rapid acquisition of assets.
Let’s take the example of fund transfer: An organization that transacts billions of dollars a year in mutual fund or IRA activity stands to miss out on a significant amount of revenue if their account transfer processes are poorly structured. The importance of seamless asset transfer (be it IRAs or newly acquired accounts or wire transfers) becomes evident when we calculate the number of days a firm was unable to bring said assets in-house. Every day that is spent correcting erroneous information or an incorrect transaction is directly applicable to lost revenue.
When an organization sets out on cycle time reduction activities, the focus should be on the core value-chain - series of activities that lead to revenue generation. So don't assign resources to reducing the cycle time of recieving securities or submitting work orders for check copies. While these activities are a part of your service offering, reducing their cycle time will not necessarily impact revenue generation.
S. Shahbaz ProcessArc, Inc. - Financial Services Six Sigma
