At a Glance
- As the project with Renoir progressed, one of our banking clients increased accountability of sales activities with end-to-end management of their sales process under a single supervisor.
- Span of Control of managers increased from an average of 3.83 to 6.6 direct reports.
- Productivity increased by setting daily targets and short interval controls by supervisors
Background
Our client is one of the oldest and most diversified multi-finance companies in Southeast Asia, founded in the early 1980s. Its focus is on the financing of four- and two-wheeled vehicles, targeted at the middle and lower-middle segments of the economy. It also specialises in the finance leasing of heavy equipment.
The Challenge
Renoir was engaged to conduct an analysis in several of the client’s main branches, looking into their structures, productivity levels and collection performance. Some of the main findings were as follows:
- The existing structure had multiple branch management layers and an average Span of Control of 4:1, resulting in redundancies in duties and poor communication between units & layers.
- Manpower costs were increasing faster than revenue growth.
- A lack of a standardized management system in Marketing & Collection resulted in branches creating their own systems and staff determining their own work execution.
- Poor communication and work coordination in Marketing workstreams due to multiple departments working in silos.
- The absence of collection activity measurement and structured work process meant the collection team struggled to effectively collect payments
What We Did
As a result of these findings, the client commenced a 39-week project in partnership with Renoir, with three main objectives:
- Enhance revenue by increasing the number of loans generated per sales staff.
- Reduce the cost of credit by increasing the effectiveness of collections activities.
- Streamline the layers of management to reduce overhead costs of the growing branch network.
Initial Analysis
The initial 14-week Focus Process® phase focused on the identification and qualification of opportunities for a simplified marketing process, structured collection process, cost savings and accountability within the branch structure. Several workshops were conducted with all regional managers and department heads to review the benefits of the proposed New Ways of Working as well as the potential new structure.
“Renoir helped us to optimize our Management Control System which translated into higher staff productivity, better managed business operations and increased revenue.”
– Director
Following the acceptance of the New Ways of Working, the project team worked to implement them in two pilot regions consisting of 29 branches, and thereafter rolled them out into other regions.
Revised Span of Control & Restructuring
The project’s main impact was the restructuring of business units by product, meaning that end-to-end accountability from prospect generation to loan funding was under a single supervisor within a branch. This focus gave transparency to reporting structures and problem resolution within the branches.
Organizational layers were removed entirely, enabling Supervisors and Heads to more effectively manage the day-to-day activities of Marketing and Collections staff, thus freeing up the Branch Manager to focus on the overall local market strategy.
A new span of control policy was also implemented, so that each manager would have a minimum of four direct reports and a maximum of eight direct reports. This ensured that the number of managers required within a branch would be kept at an effective level.
Introduction of New Ways of Working
In conjunction with this new structure, branch staff and managers were trained in the New Ways of Working developed by the Marketing and Collections workstreams to more effectively conduct their day-to-day activities. Continuous improvement practices were used to ensure that each branch sustainably developed and enhanced their loans operations activities.
Daily targets for each staff position were determined to enable a shorter interval control of productivity at every stage of the sales funnel.
Improve Business Processes for Sustainable Growth: A Case Study
Redesigning Your Business, The Right Way
Improve Business Processes for Sustainable Growth: A Case Study
Redesigning Your Business, The Right Way
Has your Span of Control been optimised for productivity?
Quality Assurance & Prioritization of Accounts
Supervisors played a key role in developing their staff and ensuring that the applications that would come in in the right quantities and were quality assured. Performance was reviewed on a daily and weekly basis and action plans as a result of those meetings were followed up on consistently.
The working process for Collections was revised with a more structured scheme to enable prioritization of accounts, which successfully increased the number of visits made and the number of Promise to Pay obtained. Subsequently, more accounts were collected per collector and the number of accounts that rolled into aging buckets were reduced.
Enhanced Performance Management
Of key importance was that these changes were to be sustainable with improved performance management. Systematic audits and pulse checks by an After Care team were developed to ensure that the new structure and New Ways of Working were understood and that all staff were performing their roles and responsibilities with increased productivity.
Key Results
Operational expenses
↓ 6.5%
Revenue through additional productivity
↑ 16%
Collection roll rate
↓ 5.86% points
Additional assets value
↑ US$1.92 million
Average Span of Control
↑ of 3.83 to 6.6 direct reports
Uncollected amount
↓ 22%
Achieve an optimal Span of Control for maximum productivity.
