Workflow techniques to optimize your operations

With today’s emphasis on cost take-outs and managing more with less, managed solutions firms are more challenged than ever to optimize operations. However, the opportunistic nature of how advisor and distribution relationships are formed among participants means that key operational processes often develop organically. While many experienced operations professionals excel at quickly establishing procedures for supporting new business, over time, consistency among critical process flows decreases. Documentation of procedure may no longer be in sync with the actual procedure followed.

It can therefore be difficult for management to know where to begin looking for opportunities to increase productivity by optimizing processing. In this article, we’ll discuss techniques for workflow analysis that can help operations managers establish a baseline of existing processes and identify potential areas for reengineering and optimization.

Inventory critical processes

Begin by creating an inventory of target processes for analysis. Focus on critical processes whose reengineering has the potential to result in significant cost savings or risk reduction. These processes may be ones that are repeated most frequently in the organization (such as handling client distribution requests), or they may be ones that occur less frequently but are exceptionally sensitive (such as communicating model changes to an overlay manager or sponsor).

If analyzing multiple processes, try to select those that are associated by participants involved, data used, and frequency of occurrence. For instance, if choosing to analyze the client distribution process, it might also make sense to analyze the tax harvesting process because of the overlap of participants and data, and the fact that both types of requests may be received multiple times each day. However, including the monthly fee reconciliation process in the project would add to the participants and data to be considered, without adding much insight to the analysis of the other processes, so could be saved for a separate project. It’s best to keep the number of processes studied to not more than three of four to avoid getting bogged down in the analysis.

Capture current state workflows

Once the processes for study have been chosen, it’s time to capture information about the workflow and tasks in each. It’s important to make sure the analysis is robust, and considers enough variations in business use cases. Define significant business dimensions in order to create a matrix of scenarios to be covered. For instance, in our example study of distribution and tax harvest requests, we might create a matrix of investment products and sponsor programs as a checklist for cases to study. If the size of the dimensions is large, it might not be possible to study all the cases. Choosing which cases to study using the matrix can help ensure there is sufficient representative coverage of sponsors and products.

The challenge now is to see the work with a fresh set of eyes, and not to rely on too many assumptions about what is currently being done. One way to accomplish this is to begin by interviewing the participants and having them explain verbally how work reaches them, the tasks they perform, and to whom the work is transitioned. Structure the interviews around the cases in the matrix you’ve created. Use the notes taken as a guide for next observing the participants in performance of their tasks, asking questions about actions observed that were not described in the interviews.

Armed with notes from interviews and observations, we’re ready to begin diagramming the current processes. Many operations professionals are comfortable documenting workflow processes with conventional flowcharts. However, we recommend using swim lane diagrams. Like flow charts, swim lane diagrams use symbols like boxes for activities and diamonds for decision points. However, swim lane diagrams identify the participants involved in horizontal bands across the page. The bands look like the lanes in a swimming pool, hence the diagram’s name. By aligning the activity boxes in participant swim lanes, not only are participant groups documented, but a left-to-right reading order is maintained and the time sequence of activities is clearer. Below is a swimlane diagram of our example distribution process.

In addition to creating swiml anes for the teams like portfolio administration and trading personnel who participate in the process, include a swim lane for any significant system with which the participants must interact to complete their tasks. Tasks that involve collaboration among participant teams, or require participants to use a system, should be drawn to overlap the associated swim lanes. If two collaborators are separated by another swim lane representing a group or system that doesn’t participate in an activity, draw parallel boxes in each collaborating swim lane and connect them with a dotted line.

Finally, although the time sequence of the swim lane diagram should be correct when read from left to right, it’s also important to note any activities that require an interval of time to pass before they can transition. For instance, after selling securities to harvest tax losses, an interval of 30 days must pass before the securities can be bought back. Use a clock image or similar icon next to these sorts of activities and make a note of the duration that must be waited.

Next steps

Now, we have a set of swim lane diagrams mapping our current state client distribution and tax harvest processes for a variety of product and sponsor scenarios. In our next article, we’ll talk about how to analyze these diagrams to identify potential opportunities to optimize process efficiency.