Consumer Finance International Retail Banking Wealth Management LoBue Technology				Technology... BUSINESS PROCESS ANALYSIS FOR SYSTEMS DEVELOPMENT, INTEGRATION AND IMPLEMENTATION In an era of rapid change, financial service organization managers must streamline back office operations and develop flexible systems to effectively compete in today's market. Sandy Heitler discusses new tools and approaches to developing systems that actually accomplish business performance goals. THE NEED... BUSINESS-ORIENTED SYSTEMS METHODOLOGIES   Financial services companies have invested heavily in technology during the past 10 years to streamline back office procedures and improve customer service. But it has not produced the desired results. Managers have initiated systems design on a project-by-project basis, resulting in hundreds of stand-alone systems that are unable to communicate, are difficult and expensive to upgrade or enhance, and fail to meet the ultimate goal of the organization, which is to increase its client base and facilitate cross-selling. Historically, computer engineers used a complicated language and methodology they developed to direct systems design. Regardless of the industry, they used the same four-step procedure to deliver a new system. The process required a lengthy planning period to define the desired result, followed by months spent designing the system. Next, the actual writing of the code, along with continuous testing to correct problems and eliminate glitches often took more than a year to complete. This top-down approach is often referred to as "over the waterfall", because just as it is impossible to swim up Niagara Falls, the time and financial investment needed to complete each phase of the project make it prohibitive to reevaluate the plan at any time during development. As a result, the process itself is extremely inefficient, prone to delays, and often delivers a product that is out of date. Managers have learned the hard way that employees omit information if there is no space available on their screen. ENTER A METHODOLOGY SOLUTION... OBJECT- ORIENTED MODELING   Fortunately, a new philosophy called object-oriented modeling revolutionizes systems development. Instead of the traditional technology-driven approach, this process works from a business perspective, effectively bringing together business processes, business people and technicians. "We anticipate that in the near future, most systems development will use the object-oriented modeling method," says Sandy Heitler, a principal and Director of Information Services at LoBue Associates. "This model tends to produce sounder design, is easier for non-technicians to understand, and can substantially decrease maintenance costs during the life of the system." Object-oriented methodology holds that each task in a business has a certain behavior and defines these behaviors as objects. Each of these objects are unique, yet related, in much the same way that a parent and child are related. The objects are then used as building blocks to create a system that is connected but allows each cell to operate independently. This approach delivers a system that is constantly evolving, easy to maintain and flexible. For example, let's look at a basic customer bank account. It has a name, address, an eight-digit account code and other basic information. There are certain steps or behaviors that it performs for the bank. The first task, or object, is to bring the account to the teller's computer screen, an action behavior that programmers can deliver almost immediately after the project begins. Next, programmers create a cell to post a balance. Another object, or behavior is to calculate interest earned. Each of these additional requirements is a cell, or block, that can be added to the basic account cell at any time. Because each cell functions independently, if future growth at the bank requires that accounts be recorded with nine numbers, then the only reprogramming necessary is done at the account cell. All other cells continue to operate as previously instructed. This flexibility is critical for today's companies to succeed, but reconfiguring programs to an object-oriented model is not enough. ENTER THE FULL BUSINESS SOLUTION... BUSINESS PROCESS ANALYSIS   To maximize the potential of the object-oriented modeling methodology, organizations need to integrate systems development with all business process design. LoBue Associates has developed a program, called Business Process Analysis, (see chart below) that does just that. Through an in-depth examination of the organization's entire operation, all business functions are analyzed and unified business processes are designed. The program consists of two major segments: Data gathering is devoted to obtaining and recording a detailed insight and understanding of the organization's processes. All customer information documentation, product and service delivery systems, financial performance reporting materials and the people responsible for handling these processes are questioned. At the same time, possible ways to streamline systems and functions are analyzed. Detailed user requirements are recorded as object models to be used by programmers and systems designers. Each step is defined as a behavior and placed on the object model with a goal to integrate it into its current system and others as necessary. LoBue Associates is also aware of the special requirements organizations face and ensures that all critical domain information such as regulations, security issues and special rules, are included. This insight into the entire workplace is critical in the development of a system that maximizes performance of each procedure and employee. Once we build a completed object-oriented model, we then deliver recommendations for streamlined performance and enhancements of the current systems. The final result is a rationalization of the organization's operations and technology based on the needs of the business and the requirements of its processes. This new system eliminates incompatible systems, redundancies and poor information tracking. In conjunction with this examination, LoBue Associates also rationalizes existing procedures in an effort to streamline back office operations. Sub-processes, hand-offs, and the people needed to complete tasks are examined. An easy way to illustrate this activity is to look at the work a loan officer does for a bank. The first object on our model is the loan application. The loan officer receives this document, then conducts a series of tests or behaviors to determine the credit worthiness of the loan. We may find that the loan officer repeats some steps already completed by a previous employee and suggest ways to eliminate the redundancies. At the same time, each step the officer takes is defined as a behavior that can be placed on the object model, with a long-term objective to automate as much of this process as possible. Checking on the credit history, applicant's income, and risk factor of the applicant are all objects easily accomplished by the computer. With these new efficiencies in place, the loan officer can now handle a larger number of loans or spend more time serving customers. The computer can also be programmed to continuously monitor the loan. If it becomes delinquent, a cell can instruct the computer to issue letters to the borrower, rather than having the loan officer review monthly printouts. The cell responsible for tracking delinquent loans can also be used by the credit card, auto loan, or business loan department, eliminating the need to write a new code for each of the other departments. Consolidation, competition from non-traditional sources and an ever-more demanding public require financial service organizations to quickly meet the needs of their clients. "By integrating flexible systems and streamlined processes," concludes Heitler, "managers will be able to achieve the overall business performance to effectively compete in today's market." return
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