Performance Business of Process Management - Citibank - Case Study Example

Name : xxxxxxxxxxx Institution : xxxxxxxxxxx Tutor : xxxxxxxxxxx Title : Performance Business of Process Management Course : xxxxxxxxxxx @2009 Performance Business of Process Management Part 1 Introduction Due to the high competition in many industries especially in the financial sector, many firms have been forced to employ process management in running their activities to meet the customers’ requirements. This is important particularly in maintaining the firm’s share of the market. Since information technology is becoming a significant force within all fields and sectors, firms have to be highly knowledge intensive and information-intensive in managing their processes. Information and technology is thus becoming a significant component of process management. City bank is a good example of an institution that has successfully utilized process management in the financial sector. Process Management Process management is the combination of all actions involved in the planning as well as supervision of the performance of a process. Although process management is confused with reengineering, it can include reengineering or can be included in the reengineering process. It is actually the application of skills, ideas, tools, methods and systems to define, measure, control, report and improve the existing processes with the objective of meeting the customers' or clients' expectations more profitably. Process management is also defined as an activity or a series of activities that utilize the available resources to change, transform or convert input elements into output elements with an added value. The objectives of process management is to breakdown the organization’s activities into processes, control and monitor them with the aim of aligning them with the firm’s strategic goals. A process management approach begins by defining and formalizing the firm’s strategic goals in order to initiate processes or programs that are in line with the goals. The analysis of the existing process in the firm is then carried out. This aims at identifying the inputs and the outputs of every process in order to determine the interactions between the processes. The performance indicators for all the process are formalized to facilitate the measurements of the performance levels of the processes. Ideas on how to bring about modification of the existing processes are put forward before new processes are proposed. The modifications proposed are then implemented and the new performances measured. The inputs involved in process management are the items required by the process in order to effect a change or transformation. Inputs include both human and non-human resources. Non-human resources include items such as supplies, information, tools and equipments while the human resources include the personnel involved in manipulating the other resources. The resources usually vary depending on the type of activity or the transformation taking place. The main inputs in a process are materials, activities and information. Another important element of the process is the client. The client is an important component of the process since the aim of the process to achieve the end results which should meet the clients’ expectations. The outputs of a process will vary depending on the type of firm. Every company however has some kind of output whether it is a service or manufacturing firm. The output is usually the end results of the firm’s processes, procedures or the established methods. The effectiveness of the company’s processes are assessed or measured on the basis of the quality of the outputs produced. The quality of the outputs produced is improved by improving the processes. In order to implement a process successfully the suppliers should first be identified. This facilitates the evaluation of the process steps and the measuring of the inputs and outputs. Both the internal and external clients are then identified in order to determine the scope of the process. Part 2 Process management in Citibank Citibank is among the leading banks within the Financial Services Industry. Much of its success is attributed to the use of process management approach in executing its operation. Citibank has over the years focused on business process management approach due the high competition between banks in the Financial Services Industry as each tries to expand its market share. The Financial Services environment has numerous complexities and challenges which can only be overcome by an appropriate application of process management approach. Some of the challenges in the industry include strict regulatory as well as compliance requirements, pressure to maintain reducing margins and pressure to increase the productivity from the existing people, systems and infrastructure (Andersen 2006). Benefits of process management Creation of competitive advantages Citibank has been able to maintain a better competitive edge over other banks in the Financial Services Industry due to its effective application of process management approach. Business process management has enabled the bank to create competitive advantages from its human resources, activities and infrastructure. This is beneficial to the bank since the managers are able to make proactive decisions based on the end results of each of its processes. This facilitates quick responses necessary for minimization of business risks. This approach has enabled Citibank to remain a leading financial service provider by enhancing the streamlining of its hiring process in which the recruitment time and certification of new workers has been reduced to 80%. By analyzing and transforming the activities involved in the hiring of new employees, their certification was done much faster while their time to revenue was enhanced. As an international bank Citibank’s target is to increase its trade volume by 200% without increasing additional resources or products. By molding and modifying the processes which are significant to meeting the target, the bank has been able to proactively identify the barriers inhibiting its business growth (IT Service Management Forum 2003). Data Driven Decisions The process management approach has equipped the managers of Citibank with the adequate skills required to analyze data and base their decision making on research rather than assumption, politics or personal relationship. This has resulted to greater productivity due to objectivity and better decisions. In its expansion for example, Citibank commissioned its process management team to conduct a market research to analyze the Financial Services environment. The data collected by the team was used to make recommendations on the best practices enhance expansion (Peppard 2007). Broad-Based Participation Since the process management teams are composed members from each department in the bank, employees from the various department get an opportunity to meet and share ideas on how best the bank can be improved. Employees from all levels including the administrators as well as the juniors have a chance to work together in gathering and analyzing data in order to make unified decisions. The combined workforce recommended the opening of new branches which have since flourished to the benefit of the bank (Becker 2006). Break Down Departmental Silo Process management teams must always include representatives from all the departments affected by the processes under consideration. Departments that do not collaborate in normal cases due the complexity of their functions usually come together to address problems and suggest their solutions. The benefit of the procedure is that people who have never met before or have never worked together before get a chance to develop firm professional as well as interpersonal relationships. The relationships which normally extend beyond the process management process are beneficial to the bank. Interactions from the human resource department and the customer relations department aid in the recruitment of relevant employees in the bank (McCormack 2004). Maximize resources Among the major benefits of executing process management is maximizing the limited resources available to any firm. Citibank has been able to employ the strategies of process management to maximize resource utilization. It has been able to accomplish this by reducing the drain of waste time and energy that is common when dealing with obsolete and ineffective processes. Real and reasonable savings are made when workflow systems are intended to optimize the potential of the resources available to the firm. Citibank has been able to maximize its resources to improve its service delivery (Andersen 2002). Improvement in the Bank’s effectiveness and efficiency Citibank has been able to improve its service delivery in the competitive Financial Service Industry due to the utilization of process management approach. The approach has reduced labor turnover in the institution and has a positive influence on recruitment together with retention of employees. The approach has enabled the human resource department to design effective recruitment procedures and wise motivation strategies in the organization. The bank which initially relied on either outdated or confused information in recruitment or in motivation of employees is now fully equipped with reliable and timely information from the process management team (McCormack 2004). Culture of better decision making Citibank has inculcated a culture of better decision making due to utilization of the process management approach. All the staff members especially the senior staffs in the administration have learnt proactive decision making skills based on research. This is of great benefit to the organization since besides facilitating problem solving skills, it enables the bank evade crucial business risks which otherwise could lead to huge losses. This trend has enabled the firm to establish an open environment in which the workers are free to make decisions and become active participants in the management of the bank. This has boosted the morale of the workers and is also acting as a form of motivation t the workers (McCormack 2004). Advantages of process management approach In addition to the advantages talked about above, the process management approach has several other advantages. To begin with, the approach enhances a proactive approach to cost management. This implies that reasonable and timely decisions are made in issues concerning finances within the firm. These again assist in minimizing financial risks that can make the firm loose its share of market. The approach orients the firm towards its clients and also breaks down the barriers that exist between departments. The approach enhances employee awareness and creates a free working environment which improves the productivity of the firm. In Citibank, the approach encourages the selection of optimum cost value to added activities since the firm employs the cost process management approach (Andersen 2006). Disadvantages or limitations This approach has a few disadvantages or limitations that hinder its effective utilization by firms. The approach is expensive making it a challenge to many firms. The approach requires huge capital investments considering that the process management team requires funds to carry out research. The approach can at times be slow given that research has to be carried out. Conservative leaders in some organizations may be adamant to try out the new approach in their organizations. This approach is difficult to implement in situations where several professionals are required to share responsibilities. It becomes unclear on ho should play a particular role. For instance, in Citibank, the engineers, the IT personnel and the marketing staff might fail to agree on responsibilities. The managers in various branches might also fail to agree on strategies to implement in process management. The main branch in Japan for example might disagree with a main branch in U.S. (Andersen 2002). Another problem may be lack of qualified IT personnel to manage the process. Conclusion Process management is vital to the success of an organization in the highly competitive business environment. Firms are forced to incorporate information and technology in their process management in order to effectively plan their activities. The process enables firms to minimize financial risks in their operations which put them at better competitive positions compared to their competitors (Andersen 2002). Citibank has been able to remain a top financial institution in the banking sector to its advanced utilization of process management. Bibliography Andersen B., 2006, The Benchmarking Handbook - Step-by-Step Instructions. Chapman & Hall: London. Andersen, B., 2002, Business Process Improvement Handbook, ASQ Quality Press: New York. Becker, M et al, 2006, Business Process Management: The Third Wave. CNG: New York. IT Service Management Forum., 2003, What is ITIL. Retrieved on November 13, 2009 from . McCormack, K., 2004, Business Process Orientation. CNG: New York. Peppard, J., 2007, Benchmarking Business Process: A Framework and Classification Scheme. Oxford: Oxford University press. Events of the symposium, Intellectual Automation, and Industrial Benchmarking., 2002, Wroclaw: Poland. Read More