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Judy Ward
Judy Ward
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Working Smarter

ABN AMRO raises its lockbox operation's productivity with help from Demos Solutions.

Despite the addition of staff, by 2004, Amsterdam-based ABN AMRO Bank's U.S. lockbox operation could not keep up with its growth. And ineffective productivity-measurement tools made it difficult for the bank to identify areas that needed improvement, according to Barry Barretta, a group senior vice president at ABN AMRO's ($896 billion in assets) Chicago-based receivables-management division.

"We had a mix of automated and manual measurement tools that were developed in-house," Barretta says. But, "We did not have the data in a real-time fashion." And the tools did not consider the varying complexity of each employee's work. "That was not necessarily viewed as fair by the staff," Barretta adds.

An Outside Review

So ABN AMRO contracted Demos Solutions (Norwell, Mass.) for an operational review. During the review, Demos used its own StaffSmart Enterprise workforce-management solution, a software suite that enables companies to model and review processes, and analyze capacity and scheduling to identify opportunities for improvement. The solution can be licensed by clients and is available on an application service provider (ASP)-basis, according to Demos.

Since the bank already licensed the StaffSmart software for its retail branches, and the lockbox operations group had an existing relationship with Demos sales representatives, the bank did not conduct a formal RFP process, according to Barretta. "We had a meeting of the minds philosophically, so we asked them to give us a proposal," he says. The companies negotiated the review's parameters in winter 2004. "We knew the payback was going to be there once we agreed on the scope of the work," Barretta says.

ABN AMRO gave the go-ahead to Demos in spring 2004. "We liked their approach, their tools and how they think as an organization," Barretta says. "They use data and fact gathering to base their recommendations on - they base it on real analysis."

Demos started the review in mid-May 2004 and completed it in late July. "They spent time gathering data on the types of processes in our department and historical volume, then did a breakdown by day and hour and compared it against staffing and the schedule for the previous 60 days," Barretta explains. "They came up with an optimized staffing schedule and made recommendations on some processes they felt could be improved."

Most of Demos' recommendations were implemented in the third quarter of 2004. The bank adjusted staffing schedules - for example, some lockbox staffers transitioned from a traditional work week to working 10 hours a day, four days a week - and through overtime reductions and attrition (that is, there were no layoffs), ABN AMRO reduced head count from an equivalent of about 300 full-time employees by 6 percent, resulting in $660,000 in savings, according to the companies. Additionally, the lockbox operations group increased its operating margin by 38 percent.

As important, notes Barretta, the bank fine-tuned its productivity measurement. "On any given day, we could see how a shift performed the day before," he says. "We could monitor it much more closely on an ongoing basis."

Now, the lockbox group plans to "take a very hard look" at purchasing the StaffSmart Enterprise software so that managers can use it regularly, Barretta relates. "As banking gets more competitive and there is more focus on cost, ... it provides a good tool to stay on top of how that landscape is shifting, and to be able to adjust our staffing accordingly," he says.

Snapshot

Institution: ABN AMRO Bank (Amsterdam).

Assets: $896 billion.

Business Challenge: Increase productivity of U.S. lockbox operations.

Solution: Demos Solutions (Norwell, Mass.) consulting services and StaffSmart Enterprise workforce-management software.

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