1. No category

OPTIMIZING THE OPERATING
MODEL
MORTGAGES
Making the Right
Choices
Challenges facing the Banking Sector
Two years of unprecedented pressure in the banking sector
Introduction
Background
Methodology
PROFITS
Decision Criteria
Annexure
regulators’ management
expectations are more
onerous than ever before
products and services need
dynamic capacity for
mass costs and niche
service
shaky economic
environment requires a
customers have become
ever more demanding –
and less forgiving
new approach to cost
efficiency
Typical Responses being considered
Change is multifaceted, therefore complex - but inevitable
Clients are used to
following the sun and
Introduction
Background
Methodology
PROFITS
Decision Criteria
Annexure
investment in technology
has become business-
expect their banks to do so
for cost and service
critical
Services engineering
Diverse talent
is moving from the shop
floor to the board room –
shared services, LEAN,
NVA
acquisition, development
and retention is vital
What INSORCE™ does
Introduction
Background
Methodology
PROFITS
Decision Criteria
Annexure
Unified analytics framework for the target operating model
Strategy
Process

 Business
drivers
 Control
objectives
 Service
Delivery
Risk
Financials
$
</
>
Information on
 roles
 activities,
 timelines
 volumes
Operations
Infrastructur
e
Teams
Data,
hardware,
communicat
101 ion
01000
1
010
Objective led
controls
 cost of
control
 metrics
 governance
Algorithm to
manage
 FTE
 Delivery
time
 Location
Cost budget &
projections
 Human
resources
 Infrastructure
Enterprise
Architecture
 hardware
 applications
 Infrastructure
Human
resources
 recruitment
 training
 supervision
 teams
Unique ability to combine all elements of the operational model into a single decision
making platform
Mathematical algorithms ensure optimum resources for each scenario. It provides the
efficient cost frontier for service delivery, control and scale decisions.
Answers are exponentially faster, more accurate and cost effective. Experiential
analyses would take months to compute what INSORCE™ does in hours.
Implications and Consequences Of Decisions
Introduction
Background
Methodology
PROFITS
Decision Criteria
Annexure
The world of INSORCE™ is an inter-connected one
A digital
model that is
alive to constantly
changing market, product,
Visualize detailed or high level
operations with pragmatic
implementation; not unlike a
business, risk and regulatory
considerations and criteria
Control
Coverage
Vulnerabilit
y
Control
& Risk
Policies
CAD/CAM engine for services.
Busines
s
Delays &
Deadlines
Volume
Effort
Mode
Handle
Time
Controls
Business
Rules
Supervisio
n
TACTICS
Infrastructure
Human
Resourc
e
CRITERIA
Delivery
Standard
Hiring &
Training
Application/
Equipment
Schedul
e
STRATE
GY &
POLICY
Transition
Time &
Cost
Process
Work
Timing
Size
Location
Operation
s Cost
Business Situation
Discussions with a Mortgage Servicer
Introduction
Background
Methodology
PROFITS
Decision Criteria
Annexure
Currently works with multiple 3rd party BPO providers, primarily in India and is
looking to diversify its offshoring strategy. Considerations include
1.
2.
3.
Cost of ownership of the new solution
No degradation of service delivery standards to existing and new borrowers
Consolidated view of operational risk – not fragmented by processing center
INSORCE™ used to evaluated different pre-determined location possibilities
1.
2.
3.
4.
5.
Evaluate the locations from cost and time to implementation perspectives
Review significant impacts to operational risk and governance
Recommend the residual organization model for processes and people
Rapid assessment of digitization, if any
Business case for different recommendations
Next Stage: Continued build of the digital model to evaluate (a) acquisition of new
books of work, and (b) impact on regulatory and compliance control environment
The INSORCE™ diorama of analyses
Features supporting review of impact across silos
Strategy
Process
Risk
Operations
Financials
• Saving in
overall
cost and
FTE
• No
dilution in
delivery
standards
• Impact on
control, if
any
• Impact on
process of
new
handoffs
and
rework
• Hubs for
common
processes
for balance
between
service
delivery
and costs
• Risks from
process
hand-offs;
business
continuity;
access
control
• Deduplicate
controls in
new model
and impact
on cost
• Location
and time
zones for
delivery
• Shifts for
resource
utilization
• Activity
allocation
to
locations
• Residual
team size
and
structure
• Business
case
location
change
• Costbenefit of
change
given
governanc
e
• Operationa
l leverage
Introduction
Background
Methodology
PROFITS
Decision Criteria
Annexure
Infrastructur
e
• Digitization
and other
enablers
• Resulting
impact and
design of
workflow
• Time and
cost of
integration
Teams
• Residual
team size
and skill
• Local and
global
team
supervisio
n
• New team
hiring and
skilling
• Selection
of residual
teams and
supervisor
y structure
“There is no tool or method in the market as light to implement”
#
Current process
model with data for
0
• Activity Effort
[Volumes and time]
• Data Flow [Inputs,
Output & Rules]
• Constraints [Delays,
and Deadlines]
• Automation
Effort in Man-Hours
24 48 72 96 120 144 168
Root Product Derived Products
110 Applications
Price opinion
Underwriting
Documentation
Credit Score
Closing
KYC Approval
Payment…
Flood Zone
24
Credit Bureau…
Credit
Disputes
Pay-off Quotes
15 Flood updates
Customer Service…
650 Payments
T
W
T
F
S
x
x
x
x
x
X
x
X
X
x
x
x
X
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
1 senior and 2 junior
analysts
S
Lien
Application…
Customer Service…
M
Closing
Approval
Client services
Credit
Mailroom
Offshore Closing
Origination Channel
Closing
Loan Origination Center
Offshore Client Services
Offshore Loan Origination
Recoveries & Charge Back
Exceptio
n
Errors
70 Client request
Payoff
Lien Release
Charge reversal
Automated
76%
Root Products
5
# of Business Rules
96
Physical Mode
24%
Activities per Root
55.6
Business
Rules/Activities
4
In-scope Teams
11
Derived Products
17
Absolute Deadlines
0
Locations
5
Activities per Derivative
12.64
Relative Deadlines
5
Process Hand-offs
68
Base volumes
11487
Time of Day
1
Activities per Hand-off
4.1
Rework volumes
13.9%
Delays
26
Process
Creation and analyses of the business effort
Introduction
Background
Methodology
PROFITS
Decision Criteria
Annexure
Assessment of compensating & additional controls
Control objectives and
control environment
a) Control objectives
and resultant Basel
Risks
b) Mapping vulnerable
activities to Basel
Risk
c) Selection of controls
(new or
compensating,
d) Residual risk and
control KRIs
M
T
W
T
F
S
x
x
x
x
x
X
x
X
X
x
x
x
X
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
S

1 Analyst with Risk
Team
Business Continuity
Improper Business Practices
Product Flaws
Damage to Physical Assets
Customer Account Management
Customer Intake
Missed Reports
Transaction Execution
Theft & Fraud (External)
Theft & Fraud (Internal)
0
10
Open
Considered
20
Compensatory
30
40
50
# of activities impacted
Controls

95% risk-activity combinations addressed

Probably over controlled process with 40% of compensating
controls having another control layer largely because of current
offshoring initiatives

Timeliness objectives addressed through deadlines (e.g. for lien
registration) and not control activities

Additional controls largely for customer management and credit
Risk
Review of Current Control Environment
Introduction
Background
Methodology
PROFITS
Decision Criteria
Annexure
Goal Seek between FTE (Cost) and Time (Delivery)
Resource estimation
for acceptable
completion
a) Optimization for
minimum resource
requirement
b) Adjustment of
resource for service
deadlines
c) Resource utilization,
and completion
d) Review of hand-offs,
working hours
M
T
W
T
F
S
x
x
x
x
x
X
x
X
X
x
x
x
X
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
1 Analyst with
Operations
Delivery Standards
0
100
200
300
400
500
600
APPLICATION DECLINE
TERMS & CONDITIONS
CLOSING
LOAN SET-UP
CREDIT BUREAU…
PAY-OFF QUOTES
PREPAYMENT
CHARGE REVERSAL
OTHER REQUESTS
Request
Delivery
Exceptions
S
Team Size and Composition
40
30
20
10
0
Onsite
Offshore
90
FTE
Operations
Resource requirement and scheduling
Introduction
Background
Methodology
PROFITS
Decision Criteria
Annexure
Detailed defense of operational and capital budgets
Operational budget
and projections
a) Volume and price for
revenue if required
b) Detailed capital &
operational cost
from output
c) Compute each
element of cost
impact
d) Assess pricing, and
profitability
M
T
W
T
F
S
x
x
x
x
x
X
x
X
X
x
x
x
X
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
S
Production Costs
Personnel
Client Services
Closing
Credit
Loan Origination Center
Mailroom
Offshore Client Services
Offshore Closing
Offshore Loan Origination
Origination Channel
Recoveries & Charge Back
Vendor specialist
Personnel Costs
Infrastructure
Chennai
Manila
Dallas
San Antonio
New York
Infrastructure Costs
Total Costs [per month]
#
4
10
13
6
4
6
19
10
9
2
4
87
Unit Cost
16.8
54.6
79.4
28.8
13.4
6.6
11.5
3.8
40.5
1.0
20.6
34
7
32
12
3
88.0
0.3
2.1
0.6
1.2
1.1
Total Cost
67.4
546.2
1,032.1
172.9
53.6
39.8
219.0
38.4
364.9
2.0
82.2
2,618.5
Administrative Costs
Supervisors
Cost
1
1
15.7
2
1
33.3
2
1
56.2
1
1
21.3
1
1
12.6
1
1
3.0
2
1
3.5
1
1
2.0
2
1
45.8
1
1
1.9
1
1
12.7
15
11
207.9
8.8 Chennai
2
14.5 Manila
1
19.0 Dallas
7
14.4
3.3
60.1
2,678.6
GRAND TOTAL
0.52
2.08
4.16
6.8
214.7
2,893.2
Financials
Monthly expense budgets
Introduction
Background
Methodology
PROFITS
Decision Criteria
Annexure
Combined view of process, people and technology
W
T
F
S
x
x
x
x
x
X
X
X
X
x
x
x
X
X
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
1 analyst with
Technology team
S
Teams
Client services
Closing
Credit
Origination
Mailroom
OS Client Services
Offshore Closing
OS Origination
Channel
Recoveries
Vendor specialist
Data Objects
T
Applications
M
Application
Connectivity
Enterprise architecture
analyses
a) Architecture by
process
b) Investigate clusters
with no digitization
c) Review applications
supporting process
d) Investigate data flow
and redundancy
Documentum
ACAPS
ALS
Bank Doc
Hogan
IVR
Bank View
Point Systems
Physical File
Scanned Image
Email
Fax
Over Phone
Digital File
Workflow
Credit
Documentation
& Closing
New Loan Payment
Pay-off
Service
Disputes
*
*
*
*
Flood
Zone
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
Application Application Contract
Opinion
T&C
Borrower
Borrower Borrower T&C
KYC
Decline
Loan
Score
*
*
*
*
*
Assess Citrix
*
capability for
offshoring
KYC,
Equifax
*
*
*
*
*
*
*
*
Drawdown
T&C
Package
Loan
Lien
*
*
*
*
Lien
Package
Loan
Score
*
*
*
*
Investigate
application
redundancy in
cluster
*
*
*
*
*
*
*
*
*
*
*
*
*
*
Payment Request
Exception Quote
Release
*
*
*
*
*
CL3 |
Recovery
*
*
*
Assess workflow
breakage across
locations
*
*
*
*
*
*
*
Request
Release
Reversal
Disputes
Flood
*
*
*
*
CL3 | C
Writer
*
eOscar
*
Assess cluster
*suitability or
* for
digitization
*
offshoring
*
*
*
*
Infrastructure
Enterprise Architecture Model
Introduction
Background
Methodology
PROFITS
Decision Criteria
Annexure
Organization Structure & Teams
Skills, talent acquisition and supervision
x
x
x
x
X
x
X
X
x
x
x
X
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x

1 analyst and HR team
OS3
OS5
OS6
Position
Education
Client services
Closing
Credit
Loan Origination Centre
High School Diploma
Bachelor's Degree
Bachelor's Degree
High school diploma
Onsite
OS7
Industry & Experience
Mortgage Processor
2
Mortgage Closer
4
Credit Analysts
2
Loan Officer –
3
Mortgage
Mailroom
High School Diploma Mailroom
2
Offshore Client Services Bachelor's Degree
Retail Banking
1
Offshore Closing
High school diploma Appraiser - Residential 5
Offshore Loan Origination High school diploma Loan processor
3
Origination Channel
High School Diploma Loan Officer - Mortgage 2
Recoveries & Charge
High school diploma Loan collection officers 1
Back
Vendor specialist
High School Diploma Appraiser - Residential 4
Hired
Mailroom
x
S
RO7
Origination
Channel
S
RO6
Vendor
Specialist
F
RO5
200
Credit
T
RO3
100
Closing
W
Closing
Origination Center
Mailroom
Origination Channel
Recoveries
Vendor Specialist
Credit
0
Work allocation
opportunities
100%
80%
60%
40%
20%
0%
Client
Services
T
Team Utilization
Recoveries
M
Team Effort by Competency
Rating
Client Services
Origination
Center
Human resources
skills, hiring and
training
a) Rate skills required
for each activity
b) Select talent pools
by skill and location
c) Determine training
gap & requirement
d) Select talent based
on cost or time
Teams
Introduction
Background
Methodology
PROFITS
Decision Criteria
Annexure
Offshore
4
10
13
6
Total Cost
(USD)
4207.48
5438.50
6101.09
4760.00
Time
(weeks)
8
13
11
12
4
6
19
10
9
2
3368.46
1121.00
612.31
393.28
4496.58
241.30
5
18
17
14
4
10
4
5183.64
6
Rapid updates on opportunity and considerations
1.
Assessment of
opportunity by
moving
activities to the
new “offshore”
row(s)
Quickly create
versions for
multiple
situations
2.
M
T
W
T
F
S
x
x
x
x
x
X
x
X
X
x
x
x
X
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
S
“Drag and drop” transfer
of functionality from onsite
to offshore process
New offshore team
created and
populated with
functionality

Operations & Business
Teams
Highly flexible in terms of
functionality “scenarios”
and alternative strategy
Process
Reflecting changes in the offshoring plan
Introduction
Background
Methodology
PROFITS
Decision Criteria
Annexure
What the strategy means for objectives, risk and control
1.
Automatic
review of
objectives,
controls with
offshoring
Review, amend
controls (include
compensating)
controls for
offshoring
2.
M
T
W
T
F
S
x
x
x
x
x
X
x
X
X
x
x
x
X
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x

Control Activities for Offshoring
4 compensatory controls for
offshoring
 Helped address 14% risk
activity combinations
No different vendor
management or location risk
 Most compensating controls
around transaction
execution
Business Continuity
Improper Business…
Product Flaws
Damage to Physical…
Customer Account…
Customer Intake
Missed Reports
Transaction Execution
Theft & Fraud (External)
Theft & Fraud (Internal)
0
Open
Considered

2
Compensatory
4
6
Controls
S

Cost of Controls
 US$ 47,160 per annum –
marginal cost of controls
 52 hours more to finish
the daily book of work

Risk and Operations
Teams
2.6 FTE impact for like to
like cycle time
Team composition
30
25
20
15
10
5
-
No Control
Controls
Risk
INSORCE™ INSIGHTS: Beyond the obvious
Introduction
Background
Methodology
PROFITS
Decision Criteria
Annexure
S
x
x
x
x
x
X
x
X
X
x
x
x
X
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
0-6
12-18
24-30
36-42
48-54
60-66
72-78
84-90
96-102
108-114
120-126
132-138
144-150
156-162
168-174
180-186
192-198
204-210
216-222
228-234
240-246
252-258
264-270
276-282
288-294
300-306
312-318
324-330
336-342
348-354
360-366
372-378
384-390
396-402
408-414
420-426
432-438
444-450
456-462
468-474
480-486
492-498
S

Business Manager
with Operations Team
120.0
100.0
80.0
60.0
40.0
20.0
-
The right FTE reduces
delays by 72 hour
103 WRONG FTEs
reduces delays by
only 20 hours!
Resources to manage delays
Shift Strength
Additional FTE
0-6
12-18
24-30
36-42
48-54
60-66
72-78
84-90
96-102
108-114
120-126
132-138
144-150
156-162
168-174
180-186
192-198
204-210
216-222
228-234
240-246
252-258
264-270
276-282
288-294
300-306
312-318
324-330
336-342
348-354
360-366
372-378
384-390
396-402
408-414
420-426
432-438
444-450
456-462
468-474
480-486
492-498
F
Process Cycle (Hours)
AHT required (FTE)
T
Actor Busy
Represent tradeoff between size
and cycle time
Management call on
extending working hours
or overtime
W
Actor Out of Office
Most time
zone delays
removed
through shifts
Low FTE: Delay ratio ->
High cost benefit
<- Low impact on utilization
T
Process Delays over Life Cycle
FTE: Delay ratio
reasonable.
Cost benefit based on
management priority
M
80.0
60.0
40.0
20.0
-
Most transfer of
work to
“available” teams
done
High FTE: Delay ratio ->
Low cost benefit
<- Low team utilization
The need or
opportunity for global
consolidation
a) Extending time lines
for teams unable to
“stretch”
b) Transfer of activities
to current or shared
utility
c) Real shared services
based on work
schedules
Activity Delay (Hours)
Tangible management action in a fraction of the time
Process Cycle (Hours)
Operations
INSORCE™ INSIGHTS: Beyond the obvious
Introduction
Background
Methodology
PROFITS
Decision Criteria
Annexure
Immediate benefit possible from existing engagements
Optimization of
current operations
a) Delay analysis for
shifts
b) Load balancing
within teams
c) FTE rationalization
for bottlenecks
d) Review time of day
process
constraints
M
T
W
T
F
S
x
x
x
x
x
X
x
X
X
x
x
x
X
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
Increase (Decrease) in Service Delivery Time
Increase (Decrease) in delivery time
-300
-250
-200
-150
-100
50
FTE
Hours
1
Business Manager
with Operations Team
0
APPLICATION DECLINE
APPLICATION DECLINE (Exceptions)
TERMS & CONDITIONS
TERMS & CONDITIONS (Exceptions)
CLOSING
LOAN SET-UP
LOAN SET-UP (Exceptions)
CREDIT BUREAU DISPUTES
PAY-OFF QUOTES
PREPAYMENT
CHARGE REVERSAL
OTHER REQUESTS
OTHER REQUESTS (Exceptions)
S

-50
Changing
working
hours and
shifts
90
528

2
3
Activity
allocation
for load
balancing
Control
90
hand-offs FTE Saving
changed
(%)
for
New Hours 473
capacity
Timeliness (%)
Deadlines
New FTE

(10.4)


84
70
(6.7)
(22.2)
499
573
(5.5)
8.5
Operations
Resource optimization
Introduction
Background
Methodology
PROFITS
Decision Criteria
Annexure
Sensitivity to costs and business drivers
1.
Detailed
comparison of
alternatives for
decisions
Rapid ability to
look at impact of
operational
metrics on each
alternative
2.
M
T
W
T
F
S
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
S
Personnel
Client Services
Closing
Credit
Loan Origination
Mailroom
OS Client Services
Offshore Closing
OS Origination
Channel
Recoveries
Vendor specialist
Personnel Costs
Infrastructure
Chennai
Manila
Dallas
San Antonio
New York
Infrastructure Cost
Total Costs
Business Manager and
Finance Team
Change
Cycle Time
Change
Unit
16.8
54.6
79.4
28.8
13.4
6.6
11.5
3.8
40.5
1.0
20.6
0.3
2.1
0.6
1.2
1.1
Current
Optimized Cheapest
# Total
# Total
# Total
3
50.5
4
67.4
3
50.5
10 546.2
9 491.6 10 546.2
12 952.7 12 952.7 12 952.7
3
86.5
6 172.9
4 115.3
4
53.6
4
53.6
3
40.2
7
46.4
6
39.8
6
39.8
21 242.1 18 207.5 16 184.4
13
49.9 10
38.4 10
38.4
12 486.6
9 364.9
7 283.8
2
2.0
2
2.0
2
2.0
5 102.8
4
82.2
3
61.7
92 2,619.2
84 2,473.0
76 2,315.0
34
34
7
32
12
3
88
26
6
20
13
7
32
12
3
88
8.8
14.5
19.0
14.4
3.3
60.1
8.8
14.5
19.0
14.4
3.3
60.1
6.7
12.5
11.9
15.6
7.7
54.4
2,679.3
2,533.0
2,369.4
106%
95%
88%
528
499
549
100%
95%
104%
Operational Leverage
4000
3000
2000
1000
0
1.23
150
0.84
100
50
-
Personnel
Infra
Offshore Scalability
Recovery
Servicing
Closing
Origination
0
10
20
Weeks to obtain
Recruit
Join
Train
Financials
Financial decision making
Introduction
Background
Methodology
PROFITS
Decision Criteria
Annexure
Snapshot of technology requirements for offshoring
W
T
F
S
x
x
x
x
x
X
x
X
X
x
x
x
X
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
Operations and
Technology team
S
Teams
Client services
Closing
Credit
Origination
Mailroom
OS Client Services
Offshore Closing
OS Origination
Channel
Recoveries
Vendor specialist
Data Objects
T
Applications
M
Application
Connectivity
Enterprise architecture
analyses
a) No large digitization
challenges in most
clusters given current
preparedness for
offshoring
b) Scanning may allow
some activities – but
not worth the costbenefit
Documentum
ACAPS
ALS
Bank Doc
Hogan
IVR
Bank View
Point Systems
Physical File
Scanned Image
Email
Fax
Over Phone
Digital File
Workflow
Credit
Documentation
& Closing
New Loan Payment
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
Pay-off
Service
Disputes
*
*
*
*
Flood
Zone
*
*
*
*
*
*
*
*
*
*
*
*
Application Application Contract Drawdown Lien
Opinion
T&C
Borrower T&C
Package
No Technology
Borrower Borrower T&C
Package Loan
KYC
Decline
Loan inhibitors
Loan for Score
offshoring
Score
Lien
*
*
*
*
*
*
*
*
*
*
*
*
*
*
Citrix capable
KYC,
Equifax
*
*
*
*
*
Inhibits some
activities
*
*
Payment Request
Exception Quote
Release
*
*
*
*
*
CL3 |
Recovery
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
Small changes* in
workflow
required
*
*
*
*
*
*
Request
Release
Reversal
Disputes
*
*
*
*
CL3 | C
Writer
Flood
*
eOscar
*
*
*
*
*
*
*
*
*
Infrastructure
Is Enterprise Architecture Supportive?
Introduction
Background
Methodology
PROFITS
Decision Criteria
Annexure
Residual and new organization structure & reporting
Distributed
organization chart
a)Supervisory
spans of control
based on
complexity and
controls
b)Combining teams
based on controls,
career progression
M
T
W
T
F
S
x
x
x
x
x
X
x
X
X
x
x
x
X
x
x
x
x
x
X
x
x
x
x
x
x
x
x
x
x
x
HR and Operations
team
Business
Head
Senior
Delivery
Manager
Senior Credit
Officer
Credit
Manager
Control Unit
Client
Services
Manager
Closing
Manager
Origination
Manager
S
Credit Team
Client
Services
Vendor
Manager
Origination
Channel
Offshore
Client
Services
Closing Team
Origination
Center
Recoveries
Team
Offshore
Closing Team
Offshore
Origination
Teams
Organization Structure & Teams
Introduction
Background
Methodology
PROFITS
Decision Criteria
Annexure
Comparison of results
Primary strategy with INSORCE™ recommendations
IMPACT ASSESSMENT
Parameters
Base
+ controls
Offshoring
Optimized
Impact
92
93
90
84
8.7%
Process Cycle
Time (Hours)
571
623
528
499
12.61%
Control Coverage
66%
60%
60%
-6.0%
Compensator
y + Controls
Compensator
y + Controls
Compensator
y + Controls
Total Team Size
(FTE)
Final recommendation
Introduction
Background
Methodology
PROFITS
Decision Criteria
Annexure
Optimization across cost; service delivery; control and time
500
600
84, 499
80, 523
70, 573
700
800
900
100
80
60
Cost Effectiveness (FTE)
Process
Financials
50 40 30 20 10 0
Cost Effectiveness ($ p.a.)
• Work balancing and allocation,
• Slicing activities for utilization
• Deadlines added for timeliness
• Offshoring checks identified
• Control redundancy removed
• KRIs for offshoring and vendors
• Coinciding working hours
• FTE sizing
• Impact on operational
leverage
• Controls scheduling
• Control bottlenecks eased
Risk
Operations
102%
100%
98%
96%
94%
92%
90%
88%
Infrastructure
• Workaround for technology, if any
Teams
• Skills, catchment and training
• Low cost teams leveraged
best
Cost-Implementation
Time to Implement
Cycle Time
400
Cost-Control
Control Coverage
Cost-Service Delivery
6
11
16
21
26
1000
0
Cost Effectiveness ($ p.m.)
• Selection of activities by skill
• Utility scheduling and location
• Cost of control computation
• Control hand-offs managed
• Creation of control unit
• Set-up of a 24-hour facility
• Cost effective location (India)
• Creative talent pool selection
• Trade-off cost vs. time to train
In Summary
Target operating models with “No Surprises”

Introduction
Background
Methodology
PROFITS
Decision Criteria
Annexure
At inception, INSORCE depends upon an as-is process model, that it rapidly expands into a digital
operational model. The model allows firms to
immediately recognize opportunities for expense reduction or service delivery by helping them find their
optimal point on the cost-delivery curve
2. form a robust and rapid basis for
1.
a)
b)

Evaluating alternatives that the firm is planning to make - along all decision criteria
Generating alternatives to meet cost; service delivery; control or capacity objectives
INSORCE is unique in its analysis and practical implementation of compliance and operational risk
objectives. Use of the risk module allows banks to
quickly assess and demonstrate risk preparedness for their control objectives through precise process
controls for Basel risk categories
2. find their optimal point on the cost-control curve by
1.
a)
b)

comparing the cost of controls to residual and effectiveness KRIs
identifying redundant and compensating controls across operating desks
The INSORCE Human Resource and Infrastructure modules expedite strategy into practical
implementation alternatives, helping banks to have
a view of their alternatives around the cost-implementation curve
practical solutions to operational constructs including
1.
2.
a)
b)
Assessment of shared services by business, geography or client segments
Build or buy considerations around regional and global operational centers
Results of Value Created by INSORCE™
Tangible, measurable benefits of visualization
Sources of Efficiency
0%
Current State
Distributed Processing
Functionalization
Standardization
Process Rationalization
Operating automation
Learning curve
Future State
400.0
20%
40%
60%
80%
100%
100%
34%
3%
Working with each
re-engineering
5%
lever
simultaneously 4%
4%
5%
45%
Net Benefit
(USmillion)
300.0
200.0
100.0
Time
Strategic
Tactical
Insorce
A CAD engine for services
Planning done in weeks and not in
months across ALL decision variables
Educated guesswork  Optimum
solutions
Optimize time to market and cost with
controls relevant to business
objectives
Digital benefits at a fraction of
analog costs
Significant functionality over existing
process simulators and workflow
Cost-Benefit of Alternatives
-100.0
Introduction
Background
Methodology
PROFITS
Decision Criteria
Annexure
Truly “no surprises” – strengthen
control
Controls are bespoke to objectives
and environment
Appendix
INSORCE™ Initialization input: Process model
The base case and immediate benefits
Activities
Actors
Handoffs
Effort
Volume
AHT
Delays
Actors
Site
Work
Hours
Other
Rules
Teams
Tools
Scale
Business Requirements:
• Building process flows and
model objectives and various
scenarios
• Easily adjust process
configuration to changing
realities and requirements
Process
Standard
s
INSORCE™ Risk & control configuration
Future proofing for no surprises
Objectives
Risks
Objectives
Activities
Basel Risk
Categories
Controls
KRIs
Control framework:
• A complete framework to
identify people, process and
infrastructure vulnerabilities
mapped to Basel.
• INSORCE™ identifies process
vulnerabilities and provides
control patterns to mitigate
different types of vulnerability
Activity
Risks
Appropriat
e Control
Selection
INSORCE™ Process & resource optimization
Locations, work times and global infrastructure
Math
Location
s
Proces
s
HR & IT
Resource
s
Teams
Work
Windows
Optimization features:
• The algorithm models global
operations teams depending on
volumes, schedules, deadlines
and interactions; optimizing
service delivery with cost
• Interface allows simulation of
location and infrastructure
needs
Delivery
Teams
Infrastructure
Sizing
INSORCE™ Human resources
All you need to decide on human resources
Team
Skill
Hire
Train
Competency
Clusters
Activitie
s
Scale
Human Resources:
• Competency mapping, talent
selection and training
information customizable to
organization requirements
• HR supply chain can be
optimized for cost vs. time to
market and can differ for
different skills and teams
Optimize
time or cost
Hiring &
training
plan
Cost Details
Timeline
INSORCE™ Dashboard & output
A comprehensive view of different goal seeks
Process efficiency
vs. capacity
Detailed reports &
Analyses
Summary & impact
of controls
Teams and total
people cost
Infra cost by
location