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Reviewing your business operations

We spoke to Chris Baigent-Reed, director, Jigsaw Tree, about the way the consultancy initiates necessary change in an adviser firm’s operations

ABR: When you are asked to review a business do you tend to start with a blank sheet of paper?
CB-R: We have to look at what’s idealistic and what’s realistic. When we go into firms that have been operating for some time, often there will be parts of the business that are doing really well and we’ll get called in to review a certain area where maybe performance isn’t so good or there are issues to deal with. For some areas we will take a blank sheet of paper approach, but we tend to fall in line with Stephen Covey’s train of thought which is to start with the end in mind. So we will discuss with the company’s management how they see themselves as a business and where they want to be and we’ll really drill down with them on how to get there. Often they will have key parts of the foundation and we will build bridges to make sure all the business is operating effectively.
Key to that is making sure the firm has clarity in terms of its goals and how it wants the business and the people within the business to function and that the strategic direction is in place. And we look to keep the process as simple as possible.
When we look at business’ operations we’ll look at where the processes should start and end, the elements in between and where the technology can be integrated to make the entire process more efficient. In this scenario we will use a blank piece of paper.
However, where a business uses a series of spreadsheets to operate their business areas rather than using back-office technology, often what we’ll do is to help them migrate their processes on to the technology that works really well for them as opposed to using disjointed processes.

ABR: Typically, which areas do you start with when you go into a business?
CB-R: We always kick off with the operating structure. If we can get the operating structure right we know that everything else will fall into place. It’s making sure that the business tackles things In the right way with the right structures in place. So what we will often do is talk about the strategic goals of the business in relation to their business plan. Across this sector there are a lot of firms that don’t have a business plan, so we have a template that we work through with firms so we can identify what their strategic engagement should be.
Alongside the operational structure we look at the people operating within that firm. What we see in a lot of businesses is that they will find a good person and recruit them and create a role around them. They make the business fit the person rather than identifying the gaps in the business and putting the right people into those gaps. So we work with firms to put the strategy and recruitment in the right order.
Once we’ve looked at the operational structure and said here’s how the business should operate and here are the roles that fit into that operational structure, we then look at the processes that sit beneath those and then how technology really supports and enables those processes.
With one firm we went in to look at their processes around operational management, where they had been managing the business through a series of spreadsheets. What we enabled them to do was to transition that using electronic reconciliation, to streamline their business, enable better regulatory reporting and produce a detailed management information (MI) pack all through their back office. It’s really important that people hinge the business process with the technology that they use.
Tying that in to what the FCA talks about, which is the use of consistent robust processes, my view is that without the use of technology you can’t get everything to couple together.

ABR: How receptive are businesses to going through the review process and making the changes that are needed?
CB-R: When we bring people into a room together to start re-engineering their business processes the only thing we ask them to come into the room with is an open mind. Often what we find is that people are so wedded to their processes, even if they don’t work, they can’t believe that somebody could make their lives better by changing their business process.
It comes down to the fact that people inherently don’t like change. In that scenario, what we will do is demonstrate and prove why the change is necessary and how we can enhance what they do in the way we operate and by working alongside them.

ABR: What technology changes are typically necessary?
CB-R: Often what we do is take a longer term approach with a firm. When we first go in to see them I’ll ask what investment in technology they are making. What I mean by that is not the ongoing licence fee but rather what they invest in terms of training and adoption, so that they can use that technology to best effect. Often we’ll find that firms paid for the training when they took that technology on board but that may have been five or even 10 years ago and they haven’t invested since. The other thing we look at is the IT infrastructure and often we have to change that in order for the business to achieve its growth objectives in the longer term.

ABR: What’s the key driver underlying the change process?
CB-R: What’s key is increasing profitability. Increasing revenue is fine but if you’re not increasing your profitability then why are you in business? We’ve seen some really good results from firms that have gone through the business change process and been able to improve those bottom line numbers.

ABR: You launched an outsourced income reconciliation service earlier this year. How does that tie in with the business consultancy?
CB-R: Income reconciliation is a specialist area, especially now with adviser charging. What we wanted to do with this service is to take that pain and challenge out of the business. We’ve designed the service so we can offer it at a cost that is less than having to recruit someone into that role in the business. We have the expertise on board to fully support businesses transition the work through to us, also having done the right assessments and with the right back ups in place. The difference in terms of clarity of reporting, visibility, accurate figures and also taking away the headache of being able to support the production of the RMAR reporting to the Regulator, can add real value into a business in the way that they operate.


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