©Copyright 2009, Pershing LLC, a subsidiary of The Bank of ...€¦ · for continuous improvement...

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©Copyright 2009, Pershing LLC, a subsidiary of The Bank of New York Mellon Corporation. Member FINRA, NYSE, SIPC. Trademark(s) belong to their respective owners. For professional use only. The information contained herein, including any attachments, is proprietary to, and constitutes confidential information of, Pershing LLC. It may not be reproduced, retransmitted or redistributed in any manner without the express written permission of Pershing.

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American Society for Quality

Pershing LLC – Quality Management OfficeService Level Management ToolsJames HalloranTim KeoughJulie KousenEvan LaHutaMichael Tornello

2009 International Team Excellence Award

Good morning, My name is Evan LaHuta, I am the Director of Quality Management at Pershing, LLC, a subsidiary of The Bank of New York Mellon. So that you don’t have to listen to just me for 30 minutes, I have key members of the Quality Management Office team with me today…Tim Keough, Julie Kousen, Mike Tornello, and Jim Halloran.

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Your Business Without Limits™

Pershing Overview

Pershing is a member of every major U.S. securities exchange, and its international affiliates are members of the Frankfurt, Irish, and London Stock Exchanges

Offer a comprehensive network of facilities around the world, which enables us to support financial organizations in approximately 64 markets and deliver dependable, 24x7 customer service

Over 5,000 associates who are highly focused on supporting the needs of our customers

Founded in 1939, Pershing, a subsidiary of The Bank of New York Mellon Corporation, is a leading global provider of clearing and financial business solutions

Service Excellence

Operational Support

Trading Services

Flexible Technology

Investment Solutions

Practice Management

Very simply, at Pershing, we process millions of financial transactions on behalf of our customers. They depend on us for speed, accuracy, and professionalism with every single transaction. We call that competency Service Excellence.

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Criteria4

Criteria3

Criteria2

Criteria5

Criteria1

Selectionand

Purpose

Service LevelManagement

Tools

Today we will walk you through the project that created our Service Level Management infrastructure and culture over the past two years which resulted in two critical service level management tools, The Quality Scorecard and Service Level Dashboard. These tools are used by our customers and Pershing management to drive Service Excellence, efficiency, and to compete in the ever-changing financial marketplace.

Let’s start at the beginning. The project selection and purpose.

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1A.a Types of Data & Tools Used to Select the Proje ct, & Why1

Pershing Project Selection Process

Analyze

Present

Validate

Decide

Measure

GatherData and Tools

Lost Business Opportunity

Service Level Performance ABOUT 95%

60% Likelihood to Recommend

CT Tree

Types of Data

Customer Feedback

Internal Feedback

Organizational Goals

Contract Requirements

Operational Reporting

RegulatoryRequirements

There was a variety of data that factored into the start of this project. Whether it was coming from customer feedback or operational reporting, it all was pointing to poorer financial results.

Service Level Performance was ABOUT 95%. We had manager estimates, not hard data. Our survey highlighted only 60% of customers were likely to recommend us.

These culminated in a lost business opportunity. A multi-million dollar prospect was in the final stages of decision making and chose a competitor. Our lack of attention to customer service was cited as the primary differentiator.

Lucille Mayer, our Chief Quality Officer (You’ll meet her later on-screen) assigned us the task of identifying what we could do to respond to this data.

We then turned to the proven 6-step Pershing Project Selection process to distill these inputs into viable project goals. Within the Gather phase, we decided to use a CT Tree analysis from our Six Sigma Toolkit

777


1A.a Types of Data & Tools Used to Select the Proje ct, & Why

CT Tree

1

Systemically measure critical customer interactions

Service Performance reporting on real-time basis

No manual data collection or reporting

Cost Efficient Reporting Process for Pershing and Our Customers

Provide framework for continuous improvement

Actionable data for continuous improvement projectEnable Continuous

Improvement

Increased transparency to customersPerformance Measurement Transparency

Defined and measurable service level targets

Performance Relative to Customer Expectations

Improved Customer Service

CTS (Goals)Drivers Need

The CT Tree helped us distill the data to help us focus on the key need, improving customer service.

The resulting drivers and goals were identified through discussion with the management team. We ultimately settled on 4 goals for our project. These qualitative goals would establish a starting point for true quality metrics and continuous improvement.

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1A.b Reasons Why the Project Was Selected1

> New business

> No current market leader for Service Excellence

Opportunities

> No transparency to customers of operational performance

> Limited data for management reporting

Gaps

Data and Tools

Lost Business Opportunity

Service Level Performance ABOUT 95%

60% Likelihood to Recommend

> Defined and measurable service level targets

> Increased transparency to customers of operational efficiency

> Provide framework for continuous improvement

> Systemically measure critical customer transactions

Goals

We also realized there were clear opportunities and gaps for us to address.

Expanding revenue and market share is key to Pershing’s commitment to our shareholders. In our business, there was no discernable market leader for Service Excellence. And there was limited data. Limited access to data for our customers and limited quality of data for our managers.

Through meetings and management consensus, we realized there was clear linkage from the data through to the opportunities.

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1A.c Involvement of Potential Stakeholders in Proje ct Selection1

Pershing Business Review

> New business

> No current market leader for Service Excellence

Opportunities

> No transparency to customers of operational performance

> Limited data for management reporting

Gaps





Goals

Pershing has a consistent procedure to ensure the potential stakeholders are involved in project selection. We presented to Business Review. This forum is made up of all Managing Directors across the firm and ensures their input is considered as goals are developed and projects are assigned.

It guaranteed us that the right players would be involved.

But now we had to make sure the project aligns with Pershing’s goals and strategies.

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1B.a Affected Organizational Goals, Performance Mea sures, and Strategies

1

Strategies

> Create a customer-centric quality service culture

> Consistently anticipates and exceeds our customers’expectations, building loyalty and trust

> Instill a measurements-based culture to foster objectivity and continuous improvement

Performance Measures

> Efficiency

> Cycle Time

> Accuracy

> Customer Satisfaction

To be the recognized

industry service

leader, creating

lasting competitive

advantage for our

Customers and

Pershing through

operational and

service excellence

Organizational Goal





Project Goals

For us that task was relatively easy. The Bank of New York Mellon, then Pershing, then the Quality Management Office maintain formal vision/mission statements that drive strategy, action, and resources.

As an organization that has grown up by processing billions, if not trillions of transactions, we stay focused on Efficiency, Cycle Time, Accuracy, and, of course, Customer Satisfaction. However the explosive transaction growth over the prior 10 years had created more volume than we could track manually. We needed this project to ensure continued success with these measures.

There was a clear linkage to our project goals.

But what type of impact would we have on the goals?

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1


1B.b Types of Impact on Each Goal/Performance Measu re

Strategies

Types of Impact





Project Goals

Increased loyaltyCustomer Satisfaction

Reduce defectsAccuracy

Faster turnaroundCycle Time

Minimize resourcesEfficiency

Improved marginsContinuous improvement

Increased loyaltyAnticipates customers’ expectations

Expanded management toolsCustomer-centric quality service culture

The types of impact vary from the tangible…minimize resources, faster turnaround, and improved margins. To the intangible…expanded management tools. All of these would contribute to our project and organization goals.

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1


1B.c Degree of Project Impact on Each Goal/Performa nce Measure

Strategies

Types of Impact





Project Goals

Increased loyaltyCustomer Satisfaction

Reduce defectsAccuracy

Faster turnaroundCycle Time

Minimize resourcesEfficiency

Improved marginsContinuous improvement

Increased loyaltyAnticipates customers’expectations

Expanded management tools

Customer-centric quality service culture

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Degree of Impact

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High (>20%) Medium (10%-20%) Low (<10%)��

We used management consensus and brainstorming to assess the degree of impact.

For a project to get funding at Pershing, it must have a minimum internal rate of return of 20%. Using that as a benchmark, we evaluated the impact to assess if the impact was above 10% to qualify as Medium and above 20% to qualify as High.

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Your Business Without Limits™ Page 13

Suppliers Inputs Process CustomersOutputs

2. Service Request Filled

1. Customer Service Request

3. Service Level Reporting

4. Service Level Review

>Account Holders

>Broker Dealers

> Investment Advisors

>Pershing Operations

>Pershing Technology

>Pershing Project Management Office

>Pershing Quality Management Office

>Satisfied Svc Request

>Unsatisfied Svc Request

>Customer Scorecard

>Pershing Dashboard

>Customer Request

>Pershing Ops Tools

>Target Service Levels

>Accuracy

>Technology Platform

>Customer Service Process

>Policies and Procedures

>Account Holders

>Broker Dealers



>Pershing Executives

>Pershing Account Managers

>Pershing Administration

SIPOC – Service Level Management Reporting

1C.a Potential Internal and External Stakeholders, and How They Were Identified1

We used another tool from our Six Sigma Toolkit to ensure we had identified all of the internal and external Stakeholders. The SIPOC.

Using the SIPOC to analyze the high-level Process Flow kept us focused on the full universe of Suppliers and Customers.

But a project team that large was impractical.

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1C.a Potential Internal and External Stakeholders, and How They Were Identified

��Pershing Project Management Office

��Pershing Administration

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Include as Project

Stakeholder?Knowledge of Opportunities

Knowledge of NeedsPotential Stakeholders

1

High Medium Low��

We evaluated the full list of suppliers and customers and brainstormed on what would make them a valuable stakeholder. We decided on those 5 components and ranked each.

We settled on stakeholders that had High/Medium impact on all 5 and picked 4 groups within our organization.

But what TYPE of impact would this project have on our stakeholders?

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1C.b Types of Potential Impact on Stakeholders, and How These Were Determined

1

Management and Customer transparency into performance

Data to improve associate productivity and process efficiency

Pershing Operations

Increased staffing required to support service level management

Data, data, dataPershing Quality Management Office

High cost to process this data real-time

Use of new technologyPershing Technology

Missed service levels could trigger SLA financial penalties

Transparency into customer experience

Pershing Account Management

BearishBullishStakeholders

Projects often have intended and unintended consequences on the stakeholders. To minimize surprises, we looked at the bullish and bearish positions for each.

Based on the detailed knowledge of our organization and discussions we were having with stakeholder representatives, we were most concerned with the Operations managers. Their concerns were driven from fear.

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1

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Degree

Pershing Operations

Pershing Quality Management Office

Pershing Technology


Stakeholders

1C.c Degree of Impact on Stakeholders and How This Was Determined

�� HighDisruptive level of change. Project is resource intensive, requires heavy training, staff redeployment, etc.

�� MediumCan be absorbed by existing staff and resources with moderate disruption

�� LowMinimal/No impact to resources and staffing

Degree of Impact

We used a qualitative scale to assess the degree of impact. It measured the degree of change required from each group…typically in staff and resources.

Through interviews and meetings with representatives from the 4 stakeholder groups, the Quality Management Office determined that the Operations group would have the highest level of impact.

They would require changes to policies, procedures, new training, and potentially staff redeployment. We had to stay focused on these managers as we progressed through this project.

Now Tim will walk you through how we identified improvement opportunities.

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Criteria4

Criteria3

Criteria2

Criteria5

Situation Analysis


Tools

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Focus Groups

2A.a Methods and Tools Used to Identify Potential Improvement Opportunities

Project Selection Process

Stakeholders

Project Team

2

Gather ValidatePresentAnalyze Decide Measure

Managers and Employees

The first priority during this step in the process was to add expertise to the project team. Stakeholders, who, as you just heard, are senior executives and leaders of large business units, assigned representatives from their business units to the project team to ensure they were represented on the project and to provide subject matter expertise.

The team then met to assess the situation and create a project plan using Pershing’s project selection process. Pershing’s standard project selection process is a template that is easily adapted to the needs of each project. For this step in the process, brainstorming, focus groups, and a Data Collection Form were the primary methods and tools used to identify potential improvement opportunities.

Our second priority was to assess the situation and review the project goals. The team decided to use Pershing’s four broad performance measures that Evan described a few minutes ago, as basis for brainstorming with the focus groups. Select members of the team then facilitated and participated in focus groups from each of the original stakeholders. The purpose of the focus groups was to review the four performance measures and, through brainstorming, create a list of improvement opportunities for each of the performance measures.

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2A.a Methods and Tools Used to Identify Potential Improvement Opportunities

Data Collection Form Interview Results

2

PerformanceMeasure

ImprovementOpportunities

> Efficiency 4

> Cycle time 5

> Accuracy 6

> Customer Satisfaction 5

Total 20

Focus Groups

Project Team Managers and Employees

20 potential improvement opportunities were identified during the focus group sessions and were listed on a Data Collection Form.

We then used one of our time tested approaches, one we have used during successful projects over the last 8 or 9 years, to quantify each of the improvement opportunities.

The team met with the focus groups a second time to assess each of the improvement opportunities. Each focus group was asked to rate their overall satisfaction with the performance of each potential improvement opportunity and how important it was to their business needs. Ratings were based on a 5 point scale and were recorded on the Data Collection Form.

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2A.b Analysis of Data to Identify Potential Improvement Opportunities

2

Critical Issues Summary:

1 Real time Service Level Management (SLM) monitoring

2 SLM reporting

10 Service level management governance

15 Standardized Service level agreements

3 Online SLM tools

Impo

rtan

ceLo

w

SatisfactionHighLow

Maintenance Issue

Secondary Issue Lower Priority Issue

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Using the five point scale from the Data Collection Form, the focus group results were plotted on a scatter plot chart to identify the improvement opportunities that would yield the biggest bang for the buck. Five improvement opportunities were identified; they were relatively higher in importance but lower in satisfaction.

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2A.b Analysis of Data to Identify Potential Improvement Opportunities

2

> Service level reporting

> Online tracking tool

> Transaction errors cause both Pershing and customers rework and slow processing

> Too many transaction requests are not in good order

Accuracy

> Associate knowledge

> Associate Customer service skills

> Associate customer service skills

> Associates lack a service orientation

> Associate professionalism over the phone

> Incoming customer calls transferred multiple times

Customer Satisfaction

> Issue tracking

> Standardize service levels and monitoring

> Standardize service levels and reporting

> Issue resolution turn around time

> ACH/Check processing time

> Exception Processing turn around time

Cycle time

Potential Improvement OpportunityDescription


Extract from raw data table

Next, the five improvement opportunities were reviewed in detail by the project team. The team screened out any improvement opportunities that already had solutions in progress, identified recurring themes, and ensured there was a consistent understanding of each opportunity among team members. Creating a clear and distinct definition for each opportunity and ensuring it was aligned with the project goals was a prerequisite task prior to submitting them to the Stakeholders for their evaluation.

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2A.c How Stakeholders Were Involved in Identifying Improvement Opportunities

2

> Align needs with quality goal

> Group needs into project opportunities

> Assess project opportunities

> Introduce project opportunities to stakeholders

– Validate opportunities

– Get feedback

> Select opportunity (Decision Matrix)

– Initiate project request

> Project rollout

Process Stakeholder Activities

1 Pershing Quality Management Office

> Problem Identification> Improvement Opportunity Identification> Team Selection> Project Selection

2 Pershing Technology

> Acting Project Manager> Project Plan> Assign Resources> Build Solution> Testing> Live production

3 Pershing Operations > Improvement Opportunity Identification> Solution Identification> Solution Selection> Evaluate Solution Impact

4 Pershing Account Managers

> Improvement Opportunity Identification> Solution Identification> Solution Selection> Validate Solution with Customer

Potential improvement opportunities and the analysis of the opportunities were communicated to the stakeholders via email. Concerns and questions were addressed via email or meetings with stakeholders as required. Stakeholders play a key role in finalizing the list of potential improvement opportunities; they are very skilled at scrutinizing projects to ensure the project team has thoroughly researched the improvement opportunities and that they are consistent with the project goals. Stakeholder approval took several rounds of questions and answers before the five potential opportunities were approved for further consideration.

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2B.a Methods and Tools Used to Identify the Final Improvement Opportunities

4 12335Importance Score (1-5):

Aligned With Quality Goal

Ease of Implementation

Ease of DevelopmentPotential Low Risk

Higher isBetter

Higher isBetter

Higher isBetter

Higher isBetter

Higher isBetter

Higher isBetter

15.51111.50.51Online SLM Tools

11.50.5110.510.5Standardize SLAs

160.522110.5SLM Governance

181.50.50.50.51.51.5SLM Reporting

191.50.50.51.511.5Real-Time SLM Monitoring

Weighted Score

Aligned With Project Goal





Higher isBetter

Higher isBetter

Higher isBetter

Higher isBetter

Higher isBetter

Higher isBetter




181.50.50.50.51.51.5SLM Reporting


Weighted Score


Narrow Options Final Selection

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Continuing down Pershing’s standard six-step approach, the results of the research for improvement opportunities were analyzed to narrow the options. A Decision Matrix was used to determine the final improvement opportunity.

We used the decision matrix to eliminate most personal bias from entering into the decision, ensuring an objective decision was made.

Decision criteria and weightings were established. Training was provided to the team members who were not familiar with how to complete a decision matrix. Each team member completed a decision matrix independently. The team then met to review the results and through consensus, provided final ratings of each opportunity.

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2B.b Analysis of Data to Select the Final Improvement Opportunities

2





Higher isBetter

Higher isBetter

Higher isBetter

Higher isBetter

Higher isBetter

Higher isBetter




181.50.50.50.51.51.5SLM Reporting


Weighted Score


Based on the criteria and weighting established by the team, two opportunities emerged with nearly equal ratings. After some discussion, a consensus was reached and the top two opportunities were selected. The two opportunities, Real-time Service Level Monitoring and Reporting, were mutually supporting and had strong alignment to the project goals.

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2B.c Identification of Improvement Opportunities, and Validation of the Final Improvement Opportuniti es

2



Stakeholder Consensus





Higher isBetter

Higher isBetter

Higher isBetter

Higher isBetter

Higher isBetter

Higher isBetter




181.50.50.50.51.51.5SLM Reporting


Weighted Score






Higher isBetter

Higher isBetter

Higher isBetter

Higher isBetter

Higher isBetter

Higher isBetter




181.50.50.50.51.51.5SLM Reporting


Weighted Score


After the decision matrix process was completed, an email was sent to members of the original focus groups, mostly leaders and managers from Pershing business units, to validate the findings. They were asked to review the data and agree or disagree with the recommendation. Upon receiving a majority of the responses, it was clear we had identified the most important improvement opportunities from their perspectives.

The decision matrix findings and recommendation were presented to the stakeholders. Stakeholders agreed with the findings and approved the final improvement opportunities recommend by the project team.

Julie will now walk you through our Solution Development.

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Criteria4

Criteria3

Criteria5

SolutionDevelopment


Tools

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3 3A.a Methods and Tools Used in Development of Potential Solutions

Methods


> Brainstorming

> Competitive Benchmarking

> Research

> Baselining

> Focus Groups

> Industry Comparisons

> RFD’s/Request for Demos

> White Papers

Tools

> Broad Input

> Detailed Solution Offerings

> Competitive Perspective

> Understanding of Market

> Variety of Options

Benefits

The key methods and tools used in our project selection process included competitive benchmarking and white papers…leading to productive brainstorming and focus group discussions. Focus Groups were the most beneficial, as referenced in our earlier improvement selection process. In this step, we expanded our Focus groups to include not only Pershing associates, but also our customers and industry experts.

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3A.b Analysis of Data Used in Development of Potential Solutions

3

> 100% of Pershing Operations indicated need for real-time service level data> Qualitative feedback:

– Solution needs to work for customers and Pershing– Measure as much as possible

Focus Groups

> Wish list, lessons learned, best practices Brainstorming

> Understanding of SLM tools used in other industries> Tool Options (Monitoring, Reporting, Real Time, Next Day, Productivity,

Staffing, Cycle Times, NIGOs)RFDs

> “TowerGroup: Superior Service Is Top Differentiator in Treasury Services”March 27, 2006

–Superior service quality is the number one differentiator for US financial institutions

> 48% of consumers indicate service has the greatest impact on their loyalty

White Papers

> Competition had limited Scorecarding capabilities– Manually generated data– Available for only select customers– Mostly volumes, few quality metrics

Competitive Benchmarking

Data Output

Data collected, both qualitative and quantitative, resulted in a multitude of information, data and options. Identifying key pieces of data- such as our current competition’s limited capabilities and the confirmation that superior service quality is the no. one driver for financial solution institutions, led us to a high level list of potential solutions.

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Improvement Opportunities Possible Solutions

> Manually Created Reports

> Online Ad-Hoc Data

> Auto Generated Report-Quality Scorecard

> SLM Reporting Dashboard

> Alerts

> Online Real-Time Dashboard

> Near Real-Time Dashboard

> Online Ad-Hoc Data

> Monitoring Board

SLM Reporting

Real Time Monitoring

3A.b Analysis of Data Used in Development of Potential Solutions

3

The outcome from this analysis was nine viable solutions. We examined these solutions for the opportunity to either develop in-house, purchase from a vendor, or a combination of both. This allowed the project team additional flexibility when determining a final decision.

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3A.c Criteria Used to Select Final Solution

3Higher is betterEase of useUsability

4Lower is betterInvestment requirementCost

1Higher is betterLevel of difficulty to implement the solution

Ease of implementation

2Higher is betterLevel of difficulty to build the solution

Ease of development

3Lower is betterLevel of risk to PershingLow Risk

3Higher is betterPotential to improve service quality

Potential

4Higher is betterLevel of alignment with Project Goal

Aligned with Quality Goal

5Higher is betterLevel of alignment with Quality Goal

Aligned with Project Goal

WeightMeasurementDescription

3

Driving consistency, the criteria utilized earlier for determining final improvement opportunities was applied in selecting our final solution. This core criteria was then expanded to include “ solution” specific criteria such as cost and usability.

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3B.a Methods and Tools Used to Select the Final Sol ution

Major Expenditure Request

3

Request for Proposal

Proof of Concept

Request for Proposal is our firm’s primary method for gathering financial information and technical capabilities from vendors and within Pershing. RFP’s result in our receipt of financial data such as licensing/software and hardware costs. These costs are entered into our corporate-mandated Major Expenditure Request form to calculate Internal Rate of Return, and capital and non-capital expenditures. In addition to this form, we used a second tool – the Proof of Concept (POC). POCsrequire each vendor to demonstrate the usability and functionality of their product within the Pershing environment. Our project team can easily compare vendors and the potential of each solution in meeting our needs.

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3B.b Analysis of Data Used in Development of Potential S olutions3

1233344


Ease of Development

Low RiskPotentialUsabilityCost

Align With Org

GoalWeighted

ScoreAlign With

Project Goal

4653422323Manually created SLM reports

4722433322Alerts

5335333423Online Ad Hoc Reports

5331543132Monitoring Board

5844534323Auto-Generated Reports

7423344155SLM Dashboard

7455445244Near Real Time Transaction Dashboard

8154455345Real Time Transaction Dashboard

8654555255Auto-Generated Scorecard

5Importance Score (1-5)

The project team analyzed the data by completing the Decision Matrix. This matrix rated each of the nine solutions against our selected criteria resulting in our best solution, the Auto-Generated Scorecard. Tim referenced this same matrix earlier when determining our final improvement opportunities.

Upon review, our Stakeholders raised concerns about customers having better transparency into Pershing’s performance than themselves. To address these concerns, the project team made the decision to include the second highest weighted solution, Real Time Transaction Dashboard, in our final solution selection. The Dashboard would allow insight into Pershing’s performance for our managers prior to reporting this performance to customers.

35


3B.b Analysis of Data Used in Development of Potential S olutions3

4

Align With Org

GoalWeighted

ScoreEase of

ImplementationEase of

DevelopmentLow RiskPotentialUsabilityCost

Align With Project

Goal

13 234 3

17.80.751.25110.75111Scorecard Self-Develop

18.01.50.511.51.51.511Scorecard Vendor 2

18.80.751.2510.50.750.511Scorecard Vendor 1

14.610.2510.750.750.7510.75Dashboard Self-Develop

22.80.751.7511.251.251.7511.5Dashboard Software 2

19.01.2511110.510.75Dashboard Software 1

5Importance Score (1-5)

We applied these two solutions against the Decision Matrix across their various technology options. For example, the Dashboard could be purchased from two vendors, or self-developed. The technology solution with the highest rating was selected.

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3B.c Involvement of Stakeholders in Selection of Fi nal Solution3

FinancialAnalysis

Proof of Concept(POC)

Decision Matrix

Organizer Contributor Approver

Operations

Account Management

Technology

Quality Management

Office > Operations

> Account Management

> Technology

> QMO

> Operations

> Account Management

> Technology

> QMO

> QMO

> QMO

> QMO

> Operations

> Technology

> QMO

Level of ImpactLow High

Project Team Stakeholders

Stakeholder involvement in the final solution selection process varied by expertise and role within the organization. Three types of involvement were identified: Organizer, Contributor, and Approver. Involvement was maintained through regularly scheduled meetings and email, with participation made as easy as possible using tools such as WebEx sessions. When low involvement occurred, personal meetings with Stakeholders were conducted to ensure they could identify…. What’s in it for me!

37


3C.a Final Solution, and Solution Validation3

Real Time Service Level Dashboard

Quality Scorecard

Our final solution was the net result of pairing of two solutions together. The Quality Scorecard is an auto-generated, on-line, report published monthly to all customers. This report reflects Pershing’s performance in meeting established target service levels in regards to operational processing cycle times down to the individual customer level.

The Real Time Service Level Dashboard offers real-time performance monitoring for Pershing’s Operations group. Ops Managers can now take action before processing items miss related target service levels, and also identify performance trends.

38


3C.a Final Solution, and Solution Validation

�

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Real Time Service

Level Dashboard

�Anticipation of Customers’expectations

�Management Tools

�Increased Loyalty

�Cycle Times

Quality Scorecard

Related-Expected

Impact

3

Stakeholder Consensus





Project Goals

The project team evaluated the final solution against our project goals and the expected impact from each goal. This evaluation was presented, reviewed and validated by our Stakeholders.

39


3C.bTangible and Intangible Benefits Expected to Be Realized3

Tangible Benefits

Establish baseline for continuous improvement of

speed and accuracy

Measure 400 processes

Produce monthly Quality Scorecard

for 100% of customers

Improve service level performance

to 95%

Intangible Benefits

Win new business

Increase customer loyalty

Improve quality culture

Increase customer satisfaction> Defined and

measurable service level targets




Project Goals

Specific benefits, both tangible and intangible, were identified through customer feedback gathered from Focus Groups and the evaluation of levels of service offered by our competition. Customers told us where we were and where we needed to be. We expected positive impact to our customer satisfaction rating, an increase in our loyalty scores, and new business and revenue.

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3C.c Use of Data to Justify Implementation of Final Solution3

20112010200920082007

IRR

Investment Expense

Operating Income

P&L Impact of Investment

Non-Capitalized Investment

Capital

Investment Summary

Committee Analysis

Major Expense CommitteeFinancial Analysis

Pershing’s standard process requires all final solutions to be approved by our appropriate committees. Our RFPs, White Papers and Focus Groups, combined with the Competitive benchmarking allowed for easy and clear presentation to these committees. The project team was accompanied by various project Stakeholders who offered expert insight and supporting testimony to the data presented.

Next, Mike will discuss the project implementation and results.

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Criteria4

Criteria5

Project Implementation

and Results


Tools

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4A.a Types of Internal and External Stakeholder Inv olvement in Implementation

4

Account Managers

Operations

Technology

Quality Management

Office

Develop Requirements

Provide Subject Matter Expertise

Resource Allocation

Design of Tools

Quality Assurance

Testing

Develop Service Levels, Targets,

ProcessesDesign Marketing Materials Present to Other internal

Committees

ServiceServiceLevel Level

CommitteeCommittee

Since this was a large scale project, a Service Level Steering Committee was developed with the goal to oversee the implementation. Each key stakeholder group was involved by assigning associates as team members. All other stakeholders were involved through presentations and approvals from other internal committees, with the account managers representing customers and prospects.

Some of the team’s primary responsibilities included developing requirements, testing, and developing the service level targets and processes.

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4A.b How Types of Resistance Were Identified and Ad dressed4

Pershing TechnologyCan we afford the costs and resource commitment?

Pershing Operations

We do a good enough job already !!

Account Managers

Do we want to expose ourselves to the financial risks if we fail on our service levels?

Financial Outline

Cost of Losing Customers Is Greater

Customer Feedback


CommitteeCommittee

During team meetings and committee meetings, concerns were raised regarding the implementation and solution, primarily from the Account Managers, the Technology team, and our Operations team. Our operations team gave the most resistance. They felt that their performance was already good enough, and the complexity to manage their teams through additional metrics would not be as beneficial to them. As a response, we reviewed customer feedback with them to show them the dissatisfaction with the current performance.

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Executive Committee Approval

Business Review Approval

Relationship Manager Approval

Technology Prioritization Committee Approval

4A.c How Stakeholder Buy In Was Ensured4

Committee

Pershing ExecutivesPershing AdministrationAll Internal Stakeholders

Pershing OperationsPershing Technology

Account Managers(Represent Prospective and Existing Customers)

Pershing Technology

Stakeholder Groups Addressed


CommitteeCommittee

Stakeholder buy-in was ensured through approval presentations to other internal committees. We presented to the Executive Committee, Business Review, which included all Operational Managers, our Relationship and Account Managers, and Technology team, which allocated the resources to us to implement this solution.

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4B.a Plan Developed by Team to Implement Solution4

Perform Continuous

Improvement

Perform Testing

Define Service/ Sources

Create Scorecard and

Dashboard

BenchmarkData

Assign Owners

Collect and Analyze

Develop Reporting

Engine


CommitteeCommittee

Pershing Operations teams set Service Levels

Beta Testing done by Customers and Steering Committee

Pershing Executives were involved in status updates

throughout the projectQuality Management Office

analyzed results and fostered continuous

Project Plan Developed

Pershing Technology

assigned resources

During the implementation phase, the team followed an eight-step plan, which covered the design and development of the reporting engine and interfaces, to user acceptance testing, and then to perform a continuous improvement analysis once implemented.

All internal stakeholders were updated through e-mail status updates. Each stakeholder group had specific responsibilities, such as Operations assigning the Service Levels and performing testing. External customers also assisted through User Acceptance Testing.

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4 4B.b Procedures, System or Other Changes Made to Implement the Solution, and to Sustain the Results

Project Goals Process Changes Results

> Defined measurable service level targets

> Identified process service levels

> Updated written supervisory procedures

> 495 processes have service levels defined ranging from 2 hours to 3 days


> Training given on Quality Scorecard and ad-hoc reports

> 100% of customers receive Scorecards monthly


> Wide variety of process performance reports

> Over 10 Six Sigma projects completed to reduce rework and cycle time

> Systematically measure critical customer transactions

> Built Service Level Engine> One million transactions are

measured monthly

Many changes were made that allowed us to ingrain a metrics based culture at Pershing, with the biggest shift coming from our Operations teams. Prior, they could have taken as long as they wanted to complete requests. Now, 495 target service levels are assigned and they changed their workflows to meet them. Managers are using the real-time dashboard and have included this within their written supervisory procedures. To ensure the results are sustained, numerous reports were created to monitor performance, and over 10 Six Sigma improvement projects have been completed based on this data.

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Validation of Measurement Systems

4B.c Creating/Installing a System for Measuring and Sustaining Results

Internal Beta Testing

Quality Scorecard Quality Cup

4

2008 Winner: Pershing New Accounts

Customer Beta Testing

Real Time DashboardPerformance Management

Sustaining the Results

The Measurement system was validated through Beta testing. First, our operations teams participated in an internal rollout to review how the transactions were being measured, and to begin updating their workflows. Then we conducted beta testing with our customers to get their feedback on the Quality Scorecard design and contents.

The constant monitoring through the real-time dashboard and monthly scorecard analysis has helped us to sustain the results. The establishment of the Pershing Quality Cup competition between departments helped us raise the bar. Each department is measured on speed and accuracy. Each month, the Cup is passed around to the winning department for that month and then given to the yearly winner.

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4 4C.a Tangible and Intangible Results Realized

Intangible Benefits Results

> Increase Customer Satisfaction

> Very positive feedback from customers

> Customers satisfied with increased speed to resolution

> Win New Business

> Quality Scorecard and Service Excellence now are part of marketing materials

> Customer Service is no longer seen as gap by prospective customers

> Increase Customer Loyalty > Personalized reporting for Top 20 customers strengthen partnership

> Improve Quality Culture

> Managers manage through metrics

> Quality Cup puts focus on Service Excellence

> Additional Quality Metrics are being captured

We’ve achieved plenty of positive intangible results from this project. The biggest is the shift in our culture to be more quality and customer focused. This has allowed us to improve our performance so much that when meeting with prospects, service is no longer a gap, but a differentiator.

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4C.a Tangible and Intangible Results Realized

Tangible Benefit: Measure 400 processes

4

Goal = 400

495 processes measured in

Dec 2008

As for our tangible results, we were not only able to meet all of our goals, but far succeed them past our management expectations. At first we started out measuring 347 processes, which accounted for 387,000 monthly transactions. By the third quarter of 2007, we were able to meet our initial goal of measuring over 400 processes, and as of December 2008, we measured 495 processes and almost 1 million transactions that month.

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Tangible Benefit: Improve service level performance to 95%

4C.a Tangible and Intangible Results Realized4

2007 goal = 95% 2008 goal = 97%

Tightened 42% of Service Levels

Tightened 10% of Service Levels

Our next expected result was to measure and improve service level performance such that the targets are met 95% of the time. Once we got adjusted, we met that goal for six straight months, but were not satisfied. We tightened 10% of the service levels and then in 2008 raised the goal to 97%. We then tightened the service levels again, this time for 42%.

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4C.a Tangible and Intangible Results Realized

Tangible Benefit: Establish baseline for continuous improvement of speed and accuracy

4

Pershing Target Service Level Breakdown

Same Day Next Day 2 Business Days 3 Business Days 4 Business Days 5 Business Days

January 2007 January 2008 August 2008

75% 98%Same Day or Next Day

The last tangible goal that we will review was to establish a baseline for continuous improvement, and as I just mentioned, we’ve were able to do this and tightened our service levels twice. Through Six Sigma and other improvement techniques, we have gone from 75% of our service levels being same day or next day processing to now over 98%.

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4C.b How Project Results Link to Organizational Goa ls, Performance Measures, and/or Strategies

4

PerformanceMeasures

Results

Efficiency

> Developed measurements of transactions sent Not in Good Order (NIGO)

> From January 2008 to March 2009, the NIGO % has been reduced from 6.5% to 5.3%

Cycle Time> One million transactions measured across 495 processes

> In March 2009, 98.6% of transactions met targeted service levels

Accuracy> Developed measurements of transactions reopened by the

customer in October 2007

> Our error rates have decreased from 4.5% to 2.0 %

Customer Satisfaction

> Our Likelihood to Recommend score has jumped from 60% to 78%

By developing a measurements based culture, with the dashboard, scorecard, and Quality Cup and continually striving to improve performance using Six Sigma, we are succeeding in meeting our organizational goal.

We have also seen excellent results from our other performance measures that we capture. We’ve improved efficiency by reducing rework by Pershing and our customers from 6.5% to 5.3%. In March of 2009, we met 98.6% of our Service Level Targets. Our error rates are down from 4.5% to 2.0%. Finally, survey results have shown our Likelihood to Recommend score jump from 60% to 78%.

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4C.c How Results Were Shared With Stakeholders

Pershing Operations

Pershing Quality Management Office

Pershing Executives

Quality Cup

Service Excellence Awards

Real Time Dashboard

Service Owner Council

Existing Customers

Prospective Customers


Pershing Technology

Top 20 Customer Analysis

Quality Scorecard

Marketing Materials

Quality Forum

4

As you have seen, the results and data from this project is wide spread and more than available to our customers and internal stakeholders. We have an internal Service Owner council meeting once a month for our Operations Managers to discuss any reporting or process issues. For our customers, we host a quarterly Quality Forum for them to discuss the Scorecard as well as hear updates on future improvements.

All of the hard work and effort from this project has really shown itself in the results that we have experienced. Now, I’d like to introduce Jim to discuss our team management.

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Criteria5

Team Management


Tools

5757


Suppliers Inputs Process CustomersOutputs

2. Service Request Filled

1. Customer Service Request

3. Service Level Reporting

4. Service Level Review

>Account Holders

>Broker Dealers



>Pershing Technology

>Pershing Project Management Office

>Pershing Quality Management Office

>Satisfied Svc Request

>Unsatisfied Svc Request

>Customer Scorecard

>Pershing Dashboard

>Customer Request

>Pershing Ops Tools

>Target Service Levels

>Accuracy

>Technology Platform

>Customer Service Process

>Policies and Procedures

>Account Holders

>Broker Dealers



>Pershing Executives

>Pershing Account Managers

>Pershing Administration

5 5A. How the Team Members Were Selected, and How They Were Involved Throughout the ProjectSIPOC – Service Level Management Reporting

To select Team Members, we referred back to the SIPOC created during the Project Selection phase.

The Suppliers and the Customers tell us the potential stakeholders in the process. For the project team, we focused on the key stakeholder groups, also identified in the Project Selection phase.

Participation of non-key stakeholders would be solicited on an as-needed basis, when their subject expertise would be required.

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5A. How the Team Members Were Selected, and How They Were Involved Throughout the Project

5

Stakeholder Activities Criteria

1 Pershing Quality Management Office

> Problem Identification> Improvement Opportunity Identification> Team Selection> Project Selection

> Experienced Project Manager> Background in Customer Reporting

2 Pershing Technology

> Acting Project Manager> Project Plan> Assign Resources> Build Solution> Testing> Live production

> Experience in Developing Customer Reports

> Understanding of Pershing Data Sources> Statistical Expertise> Experience in Application Platform and

Architecture

3 Pershing Operations > Improvement Opportunity Identification> Solution Identification> Solution Selection> Evaluate Solution Impact

> Experience with Cross Functional Projects

> Wide Breadth of Pershing Experience> Daily Interactions with Customers

4 Pershing Account Managers

> Improvement Opportunity Identification> Solution Identification> Solution Selection> Validate Solution with Customer

> Experience Across Multiple Market Segments

> Respected Leader

5 Pershing Project Management Office

> Overall Project Management> Develop requirements and specifications> Issue identification and resolution

> Experienced Pershing Project Manager> Knowledge across Operations Units

Having identified the key stakeholders by using the SIPOC, it was critical to involve the right associates in the project.

For each stakeholder, we identified the key activities they would be involved in, and the attributes desired of team members.

In general we were looking for people who had:

a) Experience in metrics and reporting.

b) Familiarity with Pershing applications and data sources.

c) A breadth of customer facing project and/or operational service experience

d) It was also critical the team members were well respected throughout the organization, to ensure they would receive the needed cooperation from other Pershing associates.

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> Operations managers> Operations associates> Account Managers

Service Excellence Training(2 Days)

5B. How the Team Was Prepared to Work Together5

Training Plan

> All Project Team Members

Service Level Management

Overview(2 Hours)


Pershing Business Technology Architecture

Overview(2 Hours)


Six Sigma Tool Overview(2 Hours)

Now let’s talk about how the team was prepared to work together.

We started by providing training for each team member in:

1. Service Excellence

2. Service Level Management

3. Pershing Business Technology Architecture, and

4. Six Sigma Tool Overview

This training laid the foundation for what we were trying to achieve, it equipped the team members with:

1. A clear and consistent understanding of what Service Excellence means to Pershing and our customers

2. The knowledge of how to define, establish, report and manage service levels

3. Insight into Pershing’s data architecture to help identify and evaluate potential data sources, and

4. A basic understanding of the Six Sigma, and other, tools that would be utilized throughout the project

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Stakeholder Objective Channel Frequency Owner

Project Champion -Lucille Mayer

> Bi Weekly Status > In person

> Tollgate Review

> Bi-weekly

> Tollgate TBD

Project Mgmt Office

Core Team Member > Adherence to Project Plan

> Resolve Issues

> In person meeting

> Emails

Weekly Project Mgmt Office

Customers > Provide Status

> Solicit Feedback

> Conference Calls

> Focus Groups

Monthly Project Team

Pershing Technology > Receive Status of Tech Initiatives

> In person/conf. call

> Emails

Weekly Project Team

Pershing Associates > Stress Importance

> Education

> Town Hall Meetings

Quarterly President/COO

BU Leaders > Provide Status

> Set Benchmarks

> Solicit Feedback

> Directors Meeting

> Service Owners Council

> Emails

Monthly Project Mgmt Office

Communication Plan

The Communication Plan included components for not just senior management and the key stakeholders, but for all Pershing associates

In addition to regular updates for the Project Champion, stakeholders and team participants, the communication plan included updates from senior managers at town hall type meetings.

It was important for every associate within Pershing to understand the importance of the Service Level Management initiative.

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> Familiar Pershing Architecture

> Foundation of tools and methodology

> Understand CTQ’s

> Aware of Progress, Status, Goals

High Performing Team




> Tollgate Review

> Bi-weekly

> Tollgate TBD

Project Mgmt Office


> Resolve Issues

> In person meeting

> Emails



> Solicit Feedback

> Conference Calls

> Focus Groups




> Emails

Weekly Project Team


> Education




> Set Benchmarks

> Solicit Feedback

> Directors Meeting


> Emails





> Tollgate Review

> Bi-weekly

> Tollgate TBD

Project Mgmt Office


> Resolve Issues

> In person meeting

> Emails



> Solicit Feedback

> Conference Calls

> Focus Groups




> Emails

Weekly Project Team


> Education




> Set Benchmarks

> Solicit Feedback

> Directors Meeting


> Emails


Communication Plan

> Operations managers> Operations associates> Account Managers

Service Excellence Training(2 Days)

Training Plan


Service Level Mgmt Overview

(2 Hours)


Pershing Business Technology Architecture

Overview(2 Hours)


Six Sigma Tool Overview(2 Hours)

The combination of the training plan and communication plan ensured that the team was prepared to work together.

The training laid the foundation for the tools and methodology that will be utilized throughout the project, as well as the main goals and objectives.

The communication plan ensured key stakeholders were aware of the project progress, status of key milestones, and changes to deliverables and the project timeline.

We felt real good about the team dynamics and their ability to achieve the goals of the project.

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5C. How the Team Managed Performance to Ensure Effectiveness

Project PlanAgenda, Meeting Minutes, Action Plans

5

Major Milestones

1. Viability Assessment

2. Approvals: Technology, Budget, Resources

3. Requirements

4. Design

5. Build

6. Test

7. Implementation

8. Validation

9. Reporting

Project Was Completed on Time and Within Budget!




> Tollgate Review

> Bi-weekly

> Tollgate TBD

Project Mgmt Office


> Resolve Issues

> In person meeting

> Emails



> Solicit Feedback

> Conference Calls

> Focus Groups




> Emails

Weekly Project Team


> Education




> Set Benchmarks

> Solicit Feedback

> Directors Meeting


> Emails





> Tollgate Review

> Bi-weekly

> Tollgate TBD

Project Mgmt Office


> Resolve Issues

> In person meeting

> Emails



> Solicit Feedback

> Conference Calls

> Focus Groups




> Emails

Weekly Project Team


> Education




> Set Benchmarks

> Solicit Feedback

> Directors Meeting


> Emails


Communication Plan

Meeting Topic: Service Level Management

Meeting Date: January 6, 2006 Kevin Keogh Michael Kennedy James Halloran Joe Luisi Barbara Korn Ken Greene Harry Zacher Melissa

Rockhill

Attendees:

Lami Garber

Absent: Latonya Ruth Kevin Stokes

ey items that were reviewed/discussed:

• Ken suggested it might be worthwhile for the help desk to conference on IBD System Admin and the field representative as a way to prevent future calls.

• Melissa would like to know which IBD’s call as well as if conversions increase the call volume.

• Lami suggested developing a pop up message with the telephone number for System Access.

• Kevin suggested an automated e-mail be generated to Pershing LLC whenever a user attempts to access a service for which they are not entitled.

• Harry stated that it would be helpful in selling new features and services if there was a way to capture who is trying to use premium content, for example.

• Melissa asked about an edit check in NPNX versus ASDS/PARADIGM to remind IBD Administrators that a profile needs to be added for certain applications by Pershing LLC.

• Jim suggested adding a message on the Help Desk voice menu directing users to call their home office for entitlement questions or problems. Mike expressed a concern that might confuse home office users calling for assistance in entitling id’s.

Decisions made: • Further discussions of these ideas is needed.

Meeting follow-ups: • Lami is going to gather the error message users get when they are not set for the relevant system.

• Kevin K. will provide a list of IBD’s that have generated calls. Open issues: Does another group(s) need to be notified of any decision or issues? If yes, which one(s)?

Other:

Now let’s discuss how the team managed its performance to ensure success.

The team managed performance by following the structure of the Project Plan and the Communication Plan:

1) The Project Plan identified major milestones and tasks for each phase, and who was responsible.

2) The project leaders held weekly status meetings.

3) Agendas, meeting minutes and action plans, were used to execute the Communication Plan, and manage the Project Plan.

This structured process ensured that milestones and deliverables were managed within the appropriate time frames, and any deviations from the plans were communicated to all stakeholders as necessary.

The end result was a project completed on time and within budget!

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Service Excellence and the Quality Scorecard

We feel great about the way the team executed this project:

• We identified key stakeholders early and involved them often throughout the project

• We applied the right tools at the right time to help with project selection, identifying improvement opportunities, solution development and solution implementation.

• We achieved all of the project goals, and most importantly

• Our customers are telling us they feel the difference

On behalf of the project team, and Pershing, we thank you for the opportunity to share our project with you.

We would now like to open the floor up for any questions.

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