To Do More With Less, Banks Should Consider Lean IT
Is your bank lean? What does that even mean?
Being lean is all about creating as much value for the customer as possible by eliminating processes that consume time, resources and space. In a word: efficiency.
The concept is usually associated with manufacturing, but your bank can be a lean operation as well. And the best place to start is in your IT department. “On average, financial institutions spend more on IT than other industries do, but the value of their investment is often unrealized,” reports McKinsey Quarterly, the business journal of management consulting firm McKinsey & Company.
After all,every day, the IT function is becoming more and more important as a driver to deliver value to the customer. A more efficient – and more lean – IT department only increases that value.
Obviously, buying software without a master plan to integrate it into existing processes isn’t the way to go. Financial institutions need to “draw on lean operating principles [to] build the more efficient models that banks need today,” McKinsey counsels.
One way many financial institutions are realizing lean value in IT is through enterprise content management (ECM). ECM solutions, like document management and workflow, provide organizations with sophisticated process automation and case-based applications. It allows you to manage content according to your organization’s business rules and gauge the health of those processes in real-time, adjusting as necessary, growing leaner with each modification.
.Not only that, but by utilizing ECM to automate processes, you can reduce your reliance on paper, saving money on storage and shipping costs. And by using an ECM solution to integrate the core systems you use every day, you can increase the value of technology investments by giving them the ability to communicate with each other. You may even be able to replace wasteful legacy IT systems.
First step toward lean banking
When you begin any automation project, the most important step is the first one: streamlining processes. Otherwise, you might automate a messy process and end up with an automated messy process. That’s how the value of an IT investment goes unrealized.
The trick is figuring out how you handle your core operations. Think about your accounting and human resource functions. In those two departments alone, you have numerous opportunities to gain efficiencies by replacing inefficient paper-based processes with electronic documentation that can be automatically routed through processes from start to finish.
Procurement, fixed asset management, AR, AP, payroll, expenses, budgeting, recruiting, onboarding, performance and promotion management, policy and procedure administration – all these processes depend on documentation. Wouldn’t you rather have all of it centrally located and available to anyone who needs it with a simple mouse click instead of storing it in file cabinets or file shares?
By initiating lean concepts where important information is stored and shared – the IT department – here’s what your bank can accomplish with ECM:
- Streamline operations and improve collaboration among employees
- Reduce the time and cost of performing important business functions
- Tie together the technologies you use every day and give them the ability to communicate
- Improve the ability of the entire enterprise to share and act on corporate information assets
- Help comply with existing and pending regulations