The company is a 110+ year-old leading provider of life insurance, diversified retirement services and employee benefit solutions and is a member of a multinational insurance holding company. With over $20 billion in Assets Under Management (AUM), $8 billion in annual revenue and over 900 employees, the company also offers a unique portfolio of traditional fixed and indexed annuities.
The financial services company was struggling with their traditional monthly processes as tasks were overwhelming and too time-consuming, requiring a substantial amount of work to be completed within tight deadlines and with little margin for error. The company wished to better understand the pain points and problem areas related to their systems, technology and resource dependencies, as well as to understand alternative operating options to mitigate significant staff turnover and execution challenges resulting from poor data quality, manual processes and conflicting priorities.
As a result, the client engaged Baker Tilly to perform a process and operating model assessment to identify operational and technical bottlenecks and inefficiencies.
Baker Tilly conducted a series of job shadowing and process discovery sessions, including time studies, to gain a comprehensive understanding of the company’s current work processes, task allocation, timing and methodology in order to measure the established durations and complexities of specific activities. Baker Tilly then categorized each activity as value-added or non-value-added and applied duration(s) to determine that over 65% of the department’s time was spent on non-value-added activities such as the identifying, locating, downloading, copying and pasting of data for reports.
To decrease the amount of time spent on non-value-added activities, Baker Tilly presented the company with various operating model enhancements and automation opportunities to consider implementing, as well as a quantifiable analysis illustrating the potential savings from implementing each solution. The analysis included the annual cost per employee, the proportion of employee time allocated to various processes assessed and the proportion of time devoted to non-value-added tasks. Baker Tilly also factored in the expense of the proposed solution(s), alongside the portion of wasted team time that would be mitigated through the implementation of process improvements and technology solutions.
Operating model recommendations focused on streamlining a combination of people and processes, technology, or a hybrid mix of improvements to people, processes and technology. High-level categories of recommendations included:
People and processes
Technology
The company chose to move forward with implementing a data and calculation automation solution to help streamline processes by replacing manual data acquisition, routine calculations and formatting, while freeing up the capacity of team members to refocus on other areas of the business, reducing the need for expanded personnel and minimizing the impact of turnover. This solution also allows the company to aggregate data into a centralized location, enabling the team and additional stakeholders enhanced reporting capabilities to drive better data-driven decision making.
Once implemented, the percentage of time spent on non-value-added activities is expected to be reduced to near zero. By adopting the solution as designed, the payback period where anticipated savings from reducing the company’s inefficiencies would cover the cost of solution build and implementation within the first year of operations, after which it is anticipated the organization will see annualized savings (or opportunity to take on additional activities) of around $800,000 to $1 million a year in cost reduction resulting from non-value-added activities and activity redistribution throughout the existing team.
