Business process analysis report is a document describing the day to day operations of the business. It encompasses workflow diagrams corresponding to the historical processes of the organization (Donnel, 2013). The complete report serves the different purpose of analyzing activities of an organization to improve its efficiency, validating an agreement concerning workflow conduct and ensuring effective and quality service administration.
The main report focus is geared towards State Farm Bank Company located in Australia. Three bank processes will be covered and presented in table form using relationships and cross-functional diagrams. The processes comprise of account opening, cheque issuing and loan processing respectively. The loan process will further be analyzed to identify the common errors that occur and appropriate recommendations considered to correct it. The analysis criteria will major on evaluating the tightness and dependency of the loan process to other processes within the banking system. Service blueprinting and bottlenecks will also be considered to identify and verify the problem encountered during the loan application and processing.
1.1. The Organization Overview
State Farm Bank is the chosen organization for the report; it is a mutual company in the United States of America containing more than 63 thousand employees and servicing over 80 million customers (State Farm Bank, 2018). The company’s loan processing services frequently record errors during and after the process.
1.2. Mission
The company’s mission is to offer quality and efficient services, establish mutual trust and relationship with its customers. Gain financial strength and be an integral part of the economic world.
1.3. Target Market
The company has more than 19000 independent contractors and offer its services to the surrounding United States population with more than 83 million personal and business banking accounts registered under the account opening services.
1.4. Strategy
The strategic mission is achieved by:
Offering quality banking services.
Improving the infrastructure used within the banking premises.
Deploying, training and maintain skilled employees.
Establishing customer friendly atmosphere within the organization to enhance the loyalty of clients.
Promoting the surrounding community with other services such as education sponsorship.
2.0. Business Process Identification
A business process is a set of coordinated activities in an organization with the aim of achieving a common goal. According to Donnell (2013), It involves inputting, processing and outputting day to day operations to accomplish the company’s’ mission and objective.
2.1. Account Opening
The account opening process can either be achieved online or manually through downloading the banking application or at the help desk at State Farm Bank respectively. The deposit accounts could either be fixed, savings, reinvestment and recurring depending on the one you need (Santoshi, 2016). The process of account opening involves visiting the nearest branch of State Farm Bank, picking the account opening form, and filling it up while signing the appropriate places. Attaching the required documents and presenting them to the bank employees for the verification process.
2.2. Cheque Application and Clearing Process
Cheques are forms of cash payments provided by banking companies. It can either be electronic or printed. Cheques are obtained by writing request letters to the bank manager after which it is approved and the checkbook issued to the customer. Check clearing process is dependent on the type of clearing; return or interbank clearing. Check clearing process portrays cross-relationship and cross-functional processes (Santoshi, 2016). The return check clearing process is mirrored towards unpaid balances hence the customer’s withholding it will receive a debit on his account. The interbank clearing is all about transferring the funds to another branch within the originals customer account.
2.3. Loan Processing Process
Loan processing service is the foundations of State Farm Bank; every customer opens an account, deposits money in their savings account in the form of check or cash and expects to be offered loans according to their financial status (State Farm Bank, 2018). Loan issuing process depicts high dependency on both account opening and checks application process.
3.0. Relationship and Cross-Functional Maps
3.1. Relationship Maps.
Account opening relationship map
Check application accept
Reject
Bank cheque clearance relationship map
Yes
No
Yes
No
Loan issued
Loan processing relationship map
3.2.Cross-Functional Relationship Maps
Account opening cross-functional relationship map
Customer
No
Account opening manager
Yes
Issue ATM
Cashier
Yes
Cross-functional map for check processing process
Customer
Cash processing desk
Bank manager
Yes
Yes
Loan processing cross-functional relationship map
Customer
Employee
Deputy Manager
Manager
Collects Loan Application Form
Yes
NO
YES
4.0.Analysis of the Processes
The analysis will major on the loan processing cross-functional model to determine the disconnects, organizational interface, inputs, and outputs. The loan processing cross-functional disconnect is first identified between the guarantors signature availability and loan approval service. There is no arrow confirming if the guarantors signature are available and legit for the manager to continue with the approval process. Further, a disconnect is also identified at the same place affecting the loan approval process; there should be an arrow to indicate the loan termination process if the guarantor's signatures are not available or in case they are fabricated.
A disconnect is also identified after the loan application rejection, to remedy it, the map should direct the clients on the next action after the application has been rejected. For instance, inserting the arrow from the application rejection box to the customer's new application box to offer them a chance to attempt the application for the second time after meeting the terms and conditions. There is also a disconnect after the loan approval process since it is not a guarantee that the manager will approve the loan, especially in cases where the guarantor's signatures were faked, the map should, therefore, contain an arrow directing the applicants to the first step which is collecting new loan application forms in case the manager fails to approve their loan.
The disconnects not only results to errors within the system but also compromise it such that understanding the whole process becomes cumbersome, according to Hess and Kemerer (1994), loan application and processing should be precise and straightforward for its quality to be maintained. From my analysis, the whole process is time-consuming and tiring to both the applicant and the individuals responsible for processing the loan. The application form has to regularly circulate from the applicant to the loan department, to the deputy manager and finally reach the manager for approval.
4.1. Tightness and Dependency
According to Schokry (2010), tightness is established when there is a relationship between phases of a process while dependency results in cases where a process completion can only be achieved when other stages are complete. Reflecting upon my loan application and approval process, there is a tightness and dependency between all stages of the process. The overall approval process depends on the completion of other phases.
4.2. Bottlenecks
Bottleneck encompasses a department performing to its capacity and cannot withstand an additional operation (Schokry, 2010). The bottleneck is generally observed at the management department; the manager coordinates almost all the activities revolving around loan processing, cheque approval and error correction within the banking system.
4.3. Service Blueprinting
Service blueprinting, according to Schokry (2010), is a diagram portraying all details and services included from the customer and organization perspective. It indicates the different touch point of components within a process and presents the customer with varieties of options to choose. The service blueprinting in loan processing is only identified in the loan application and loan issuing (Learning Space Toolkit, 2018). The customer directly interacts with the service only when he submits the loan application form and after the loan approval when issuing is taking place.
A line of visibility can also be established between the customer application process and manager issuing the loan. Meaning the processes above the line should focus on all activities revolving around the application process while the operations below the line should ensure the success of the application is determined, therefore service blueprinting should be deployed to reduce the commotion and time wastage during the whole process.
4.4. Process Measurement
Process measurement is a crucial factor deployed in organizations to determine the quality of services offered, the delivery speed and the velocity (Calli, 1992). Process measurement can be used in an organization to ascertain if the set goals and objectives are met. Upon reflection on the loan processing map, product measurement was not deployed. The average time taken to complete the loan application and issuing process was not considered, the number of loan applicants per day was not recorded as well as the number of times the applicants repeated the application process. However, the applicants who managed to secure a loan were considered in the measurement map, and the amount of credit each applicant received was also captured during the measurement schedule.
The speed of delivery identified within the loan processing map was slow; the process took a whole week since the application had to be circulated for signatories and verification across different departments. The velocity processing measuring tool was also implemented to approximate the time wasted during the loan approval process. The whole process was approximated to have taken a week. Therefore, we determine the total operating hours per day which is 8 hours and multiply with the number of operational days; that is five days then divide by the total number of days averaging to 8hours longer compared to the application process which the applicant submits within an hour.
5.0.Discussion
After evaluating the loan application and approval process, it is established that the organization has to address some issues to improve its efficiency and performance. The loan approval process should be improved, and service delivered promptly, the documents verification phase should be administered using a verification machine that can differentiate the legitimate and fabricated documents. The several disconnects identified should be fixed to avoid system errors during the process.
6.0.Conclusion
The organization must frequently asses its processes to determine the vulnerabilities and mitigate appropriate strategies to succeed in improving its services. Both the employees and managers need to establish a policy on how to facilitate and ensure a smooth and efficient processing system is obtained.
Recommendations
Installing the loan approval system in the organization to avoid time wastage and reduce errors during the process.
Establishing a team specifically to concentrate on the organization's processes and critically asses the risks encountered during processing operations.
Provide monthly organizational reports to determine the company’s weaknesses and focus on improving them.
References
Calli, J.F. (1992). TQM for purchasing management. New York City: McGraw Hills.
Learning Space Toolkit. (2018). Service blueprinting. Retrieved from https://learningspacetoolkit.org/services-and-support/service-blueprint/index.html
Santoshi, M. (2016). How to open a bank account. Retrieved from https://easybankingtips.com/how-to-open-savings-account/
Schokry, A. (2010). Basic tools for business process design. Retrieved from http://site.iugaza.edu.ps/aschokry/files/2010/02/Dr._Abed_Schokry_IU_GAZA_Dep_Introduction_to_Production_PD_8.pdf
State Farm Bank. (2018). Bank online with a name you can trust. Retrieved from https://www.statefarm.com/finances/banking
