Part II: Back Office Streamlining

Why You Should Streamline, and Why You Should Start Now

Mid-market financial service businesses are hampered by unnecessary complexity. One of our Principals refers to it as the “spaghetti underneath the website” – multiple systems that can’t talk to each other, often requiring tedious and demoralizing labor from staff.

Just as often the complexity is driven by external factors. Insurance brokers, for instance, may deal with a wide range of providers, each with their own systems, complexities, and idiosyncrasies.

We won’t pretend that it’s easy to straighten it all out. But it is more than achievable if you take a systematic approach. And, frankly, you can’t afford not to. While we are bullish about financial services in the near future and beyond, the sector will see undeniable pressures in terms of regulation, competition, and disruption.

But these pressures offer opportunities for the best to forge ahead. When you streamline your systems and processes – that is, improve integration with customers, suppliers, and service providers—you create a clear advantage over competitors.

The basic goals of streamlining are:

  • Greater efficiency
  • Lower costs
  • Automated decisioning
  • Clear, accurate, and timely reports
  • Excellent customer service
  • A platform for expansion

Of course, then there is the question of how to go about it. In our experience, the key is to focus on three areas: reinforcing leadership, knowing what you have, and creating a timeline.

First: Reinforce Leadership

Priority number one is to appoint someone with C-suite authority to have ownership of the streamlining project. Most executives are unlikely to have the time (or the inclination!) to run this particular show, but the project will never get off the ground without a real leader in charge.

And expect this leader to be deeply involved. Important decisions about processes, staff, systems, and vendors will be needed, including renegotiating contracts and hiring. These decisions will cut across departmental boundaries; the leader will need the time, authority, confidence, and competence to pull people together and to make changes happen.

It may be unrealistic to expect a CFO to do this, as they are too busy. Your IT head may have the knowledge but not the authority and people skills. The HR Director may not have the detailed systems knowledge. Even if there is no one perfect person at your company, there must be a clear leader regardless.

And set deadlines for delivery of specific improvements. You may decide on a stream of smaller improvements, or a large, transformational project, or both. Either way, unless you have clear deadlines, you can expect the project to be overtaken by other priorities.

Second: Know What You Want and What You Have

This step involves first understanding what you want to achieve. Then you figure out what you actually have and how well or badly things are working.

Your goals may include:

  • Lower costs. You want to save money by avoiding unnecessary labor and cutting waste. But if the aim is to reduce costs, then by how much?
  • Tighter security. When you eliminate the gaps and redundancies in your back end, you are also eliminating security weaknesses. Can you match this objective to an external standard?
  • More efficient compliance. When your systems communicate better, compliance becomes much less complicated. Can you identify the current gaps and cost of compliance and be clear about your targets?
  • New opportunities. With cleaner data and better reporting, you will uncover opportunities to upsell or cross-sell. Can you substantiate the value of the opportunity? Can you set targets?
  • More flexibility. With more efficient systems, your company can more easily expand and contract as the market demands. Are there growth targets that will be enabled by streamlining?
  • Improved morale. Inefficient systems create demoralizing extra work for staff, tension between departments, and drain your people’s energy. Streamlining frees up workers and whole departments to focus on what really matters—customers. Can you identify key people who you would like to see spending more time on more value-adding tasks?

After you are clear on your goals, you next establish what you have. List every software product your people are using – and we mean every product – so you have a clear picture of how your business operates.

This is usually an enlightening exercise for our clients. It’s when they learn what they are actually using, and where they are spending money for no reason. They will usually also see immediate, no-brainer steps toward greater efficiency and security.

Freeman Clarke has created a simple way of visualizing the technology that a business typically uses. We call it the Four-Layer System Model. Think of your technology as having four layers, one atop another:

  1. Customer applications
  2. Business applications
  3. Basic services
  4. Communication and connectivity

There will undoubtedly be “systems” within your business that are informal; for example, vital information could be in a spreadsheet or an Access database.

And some systems will not be delivered via technology. For instance, it is possible that your company still uses paper for stock control or manages and stores contracts in filing cabinets! These systems need to be identified as well – because part of streamlining will be making them more efficient with technology.

And look into what staff are using beyond what the company owns – for instance, if they use personal email accounts for business or vice-versa. (They made need reassuring that this is not a punitive expedition; it’s information-gathering to look for gaps in connectivity and security.)

Finally, how can you build on what is working. Perhaps you have third-party systems already helping your company, and their role can be expanded. Or a department whose processes are working smoothly, and it could serve as an example for other departments.

In the meantime, see our ERP and Integration Issues Knowledge Center

Third: Make a Timeline to Streamline

At this point your streamlining leader has a clear picture of what the company is currently using and where many of the snags originate. Now the CEO must empower the leader and team: give them the resources and the confidence to create a simple framework of twelve days, twelve weeks, and twelve months.

12 Days

There may be simple problems that the staff knows all about (maybe for years), but they have put off fixing them. Perhaps some persistent people issues need to be addressed by training or redeployment? Perhaps some old laptops need replacing, or you need a shared calendar, so it is clear who is on vacation? Maybe there is an ongoing “cold war” between two departments that you can end with a daily stand-up meeting?

Now is the time to identify the quick-fix problems and, well, fix them.

12 Weeks

Many important problems can be fixed in this middle stage. Focus your efforts on making them happen. This may involve bringing together suppliers, or some simple custom software, or use of a low-code integration tool.

Whatever the issues, you may need managers and staff to put aside their normal priorities. And the focus must remain on the problems; no blaming should be tolerated.

Within reason, be prepared to spend money to deliver these projects. But don’t overdo the scrutiny process – perhaps set aside a budget and then allow the team to spend as they see fit.

12 Months

What can’t be fixed in twelve weeks will likely require a more substantial project. Perhaps you need a number of system improvements, perhaps a big-bang replacement. Either way, your streamlining leader must define specific outcomes and justify the cost of each and every project.

Similarly, if external vendors are involved, then a tendering process will be necessary. External projects are especially inclined to fail, so these too need to be planned, owned, and managed, with specific timetables and deliverables.

Each of these deadlines will help to keep everyone focused and energized. Whichever project is at hand, ensure that everyone remembers that your customers decide what matters – and if you don’t get it right, a competitor will!

One Last Thing: Create a Culture of Efficiency

Having a senior person with authority over the streamlining project ensures that it remains a priority. It also helps to shift the culture of a company.

More efficient systems will lower costs and increase customer satisfaction. At the same time, you are reducing stress and frustration for your people. And if you want to retain these benefits moving forward, you’ve got to set an example for your staff. If they see the CEO or CFO allowing poor practice, they too will be lax. If they see you working toward efficiency, they will be conscious of it as well.

Much of the cultural challenge may be for managers to listen to people internally, and for these people to feel safe to express their frustrations, especially when they involve their own jobs. You will know it is working when staff feel empowered to ask questions and make suggestions, so that down the line you do not have another mess of spaghetti to clean up!


Financial Services Content Series: 

Introduction: Succeeding in 2023 (and beyond)
Part I: Security and Compliance
Part II: Back Office Streamlining
Part III: Get Digital Inside and Out Video
Part IV: Disruption and New Digital Customer Experience
Part V: Audio Discussion
Part VI:  Fast technology Review Offer


To find out more about how we could add value to your business, Contact Us and we’ll be in touch for an informal conversation.