Opportunities for Improvement
Every thing we do has costs involved and this is referred to as Cost of Poor Quality (COPQ). If two processes are similar, the more efficient process will have a lower COPQ. One of the key objectives of process improvement is aimed at reducing COPQ. Studies revealed (based on hundreds of fortune 500 companies) that COPQ reduction opportunities in an organisation is somewhere between 20%-40% of the total operating expenses of an organisation. From the following table, we can see that many activities we performed are either do not add value to the customers and it contributes as much as 55% of expenses.
Working for NOBODY - 35% of expenses
- Customer Attrition
- Re-keying
- Transactions Answering Complaints
- Redundant Sales Calls
- Operations Errors
- Resolving Problems
- MIS Rework
- Implementation Delays
- Problem Investigations
Working for OURSELVES - 20% of expenses
- Quality project teams
- Audit
- Budgets
- Monthly Reviews
- Training
- Internal Meetings
- Finance and Admin
- Compliance
Working for CUSTOMERS - 45% of expenses
- Needs Analysis
- Executing Trades
- Accepting Instructions
- Presentations
- Corporate Actions
- Answering Queries
- Negotiation
- Fund Accounting
- Delivering Statements