SEP - Solutions

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SEP Solutions

Traditional approaches to business process transformation are often experience-based, and insufficiently leverage hard process data. On the other hand, data-driven approaches such as Six Sigma in isolation have limits - as they tend to emphasize incremental, not radical, improvements. That’s why Genpact’s SEPSM methodology harnesses our 15 years of experience and the data from millions of transactions, and combines them with a strategic view of business processes – a view laser-focused on what generates business impact, and not what improves any part of a process.

SEP measures and benchmarks the metrics that have material impact on the chosen business outcomes. It then helps prioritize and execute on a range of process, analytics and technology interventions that are known to impact that business outcome. In doing so, it makes any transformation effort more agile, targeted and ultimately more timely and cost-effective – an approach clearly more suited to our times of volatility and uncertainty.

SEP covers business processes across industries and enterprise-wide functions as outlined in the figure below.

CFO Suite

The Genpact CFO Suite has been designed to provide three main business benefits that directly impact the bottom line of an organization. The CFO suites help improve key business outcomes in sourcing, procurement, order-to-invoice cycle time, financial accounting, and reporting.

Order to Cash
The Order to Cash (O2C) SEP provides companies selling in a B2B environment with a road map to best-in-class performance on key business outcomes such as Days Sales Outstanding (DSO), revenue dilution (cash yield as a % of sales), order to invoice cycle time, customer satisfaction, and cost of processing a sale.

Key business challenges we address:

  • Lack of single, unified true customer view resulting in downstream errors
  • Contract non-compliance leading to revenue and billing leakage, compliance issues
  • Low order fulfillment accuracy
  • Delayed order to delivery lead times
  • High percentage of order cancellations
  • Inventory write-off and pricing dilution

Source to Pay
The Source to Pay SEP measures the client organization’s process effectiveness in indirect materials and creates a roadmap for achieving best-in-class performance on key business outcomes such as sourcing (identifying buying strategy, negotiating, and contracting), procurement (buying the materials), and payment (generating and paying invoices).

Key business challenges we address:

  • Lack of visibility into organizational spend
  • Inadequate forecast of business requirements and non-availability of products
  • Compliance issues (internal, preferred vendor, contract terms compliance)
  • Reduced administrative and procurement cost
  • Delayed payments and non-PO invoices

Record to Report
The Record to Report SEP not only focuses on time taken to report the financials but also drives compliance, controllership, and accuracy. The Record to Report SEP is designed to improve various sub-processes such as journals, reconciliations, sub-ledgers, inter-company, fixed assets, closing, consolidation, reporting, FP&A, tax, treasury, etc., to achieve the final objective of reducing time to report for a customer. It can help increase the reliability of financial statements, lower the cost to close, and provide efficient financial analysis.

Key business challenges we address:

  • Standardization of financial controls across businesses/regions
  • Increased transparency into inner working and greater disclosure
  • Easy adaptation to changing regulations for reporting, e.g., IFRS
  • Reduced cost of finance overhead for the business
  • Financial predictability and accurate management information enabling real-time decision-making capability

IT Suite

The IT SEP suite targets the CIO/CTO's key business outcomes such as increasing the remote resolution and improving end-user productivity by reducing the mean time for resolving and decreasing incidents that flow into the service e-desk.

IT Helpdesk
IT Helpdesk SEP suite helps improve CIO/CTO's key business outcomes for managing a helpdesk. IT Helpdesk SEP focuses on driving operational efficiency and effectiveness to optimize the IT function of an organization, and helps customers create a road map for achieving best-in-class performance by reducing the contacts per user and cost per resolution and enhancing end-user productivity.

Key business challenges we address:

  • Optimize costs and the Total Cost of Ownership (TCO)
  • Ensure appropriate IT governance framework
  • Isolate the real issues to reduce helpdesk calls
  • Track reported problems and their outcomes

Enterprise Suite

Enterprise SEP helps optimize three macro-processes: collections, customer service, and hire to retire. Collections SEP helps customers achieve best-in-class collections performance. Hire to Retire SEP helps optimize processes in hiring, training, human resources, and employee productivity. Customer Service SEP helps customers build a best-in-class process from the time the customer is enrolled and an account is set up to a continued loyal relationship.

Collections SEP covers B2C end-to-end collections process. It is designed to help clients achieve best-in-class collections performance by uncovering the hidden inter-dependencies in the collections value stream across areas such as receipt and application of payments, collection analytics, early and late stage collections, skip tracing, recoveries, and account closure.

The targeted end state is a truly robust collections model characterized by best-in-class operational efficiencies, optimal pre-call efforts, and high workforce productivity.

Key business challenges we address:

  • Operational ineffectiveness: low productivity of collector workforce
  • Sub-par return on collections investment
  • Customer satisfaction challenges
  • Increased NPAs and write-off’s resulting in increased gross losses
  • Negative P&L impact resulting in high cost of collections

Hire to Retire
Hire to Retire SEP (H2R) covers hiring, training, and HR globally. It focuses on aligning people processes to the business outcomes of staffing the right person at the right time, driving employee engagement and optimizing people productivity.

Key business challenges we address using Hire to Retire SEP:

  • Reduced cost per hire
  • On-boarding and integration challenges
  • Reduced cost of HR per employee
  • Talent management and talent development costs
  • Payroll automation

Customer Service
Customer service SEP looks at the end-to-end relationship with a customer, from the time a customer is enrolled and an account is set up to a continued loyal relationship. To manage the efficiency and effectiveness of this value chain, robust capacity planning and process management are important, which is why we believe in starting from there. Customer Service SEP helps an organization identify the performance measures and performance drivers critical to success that significantly roll up to delivering the business outcome.

It also provides the framework for continuously optimizing the customer service operations through various cost reduction opportunities for eliminating calls, promoting self-service options (IVR, Web), and better resource planning for contact centers.

Key business challenges we address:

  • Inconsistent customer interaction through different touch points
  • Reduce cost to serve
  • Strong interplay between customer stickiness and portfolio size
  • Operational ineffectiveness due to low productivity and high cost per contact
  • Low revenue generation through each contact

Vertical Suite

Retail Banking
Mortgage Origination (Application to Disbursal)
Application to Disbursal SEP deals with client organizations' processes’ effectiveness within Mortgage Origination. This comprises a sequence of activities from the time an application is received to any process stage that the product or service is active. Application to Disbursal SEP creates a road map for achieving best-in-class performance on key business outcomes such as Business Risk/Compliance (identifying portfolio risk and being compliant), Turn Around Time (reduced touches between processes), and Pull Through Rate (percentage of loans that successfully convert from Application to Disbursement) resulting in decreased cost to originate mortgage loans.

Key business challenges we address:

  • Reduced cost to originate mortgage loans
  • Reduced cycle time from point of sale to funding; volume addressed
  • Compliance issues/changes (internal and external)
  • Poor conversion rate from application to disbursement
  • Lack of positive borrower experience

Mortgage Servicing
Mortgage Servicing SEP measures client organizations' process effectiveness in investor portfolios, comprising a sequence of activities from the time a loan is funded to the time the product/service is paid in full or no longer being serviced. Mortgage Servicing SEP creates a road map for achieving best-in-class performance on key business outcomes such as regulatory compliance (adherence to regulatory guidelines), Turnaround Time (reduced touches between processes), and Borrower Experience (positive customer service) resulting in decreased cost to service mortgage loans.

Key business challenges we address:

  • Cost of servicing
  • Reduced cycle time for workout assistance review; volume addressed
  • Compliance issues/changes (internal and external)
  • Poor conversion rate for converting non-performing loans to performing
  • Lack of positive borrower experience for client brand

Unsecured Lending Origination
Unsecured Lending SEP provides an end-to-end single view across the origination process including marketing, sales, credit risk, and new application processing, thus enabling financial institutions to solve their larger business challenges and implement and track strategic initiatives through an integrated approach.

Key business challenges we address:

  • Reduced cost of acquisition
  • Improved quality of application sourced and approval rates by segment-based marketing
  • Optimized risk capital
  • Decreased time to process a new application
  • Better underwriting standards and portfolio management

Consumer Credit Risk
The role of risk management has evolved from preventing loss to enabling business growth and profitability. Consumer Risk SEP deals with the risk management continuum in the consumer finance space and various aspects of credit risk impacting the consumer business as a whole. It spans policy and governance, risk identification and assessment, portfolio management, control, reserving, and reporting. The suite also creates and establishes a policy framework and a portfolio quality review mechanism, identifies regulatory compliance requirements, and creates processes for the same.

Key business challenges we can address using Consumer Risk SEP:

  • Concentration risk and degradation of portfolio quality and constant surge in credit losses
  • Tightened regulatory norms and close scrutiny, which poses a challenge to the top-line growth
  • High cost of risk management resulting from the lack of an effective risk management structure to influence the right decision at the right time

Campaign Execution and Management
Campaign Execution and Management SEP deals with the effectiveness of marketing programs for consumer banking organizations and creates a roadmap for achieving best-in-class performance by improving key business outcomes such as return on marketing investment and time to market. It is designed to help clients achieve best-in-class marketing program performance by measuring and optimizing sequential sub-processes starting from program design, list and data sourcing to tracking program performances and recommendations for future campaigns.

Key business challenges we address:

  • Sub-optimal return on marketing investment
  • Right customer targeted through the right product and the right channel
  • Lower product penetration of existing customers
  • Declining response rate and profitability of marketing acquisition programs

P&C Claims
P&C SEP is designed for the auto and homeowners market segment, focusing on improving not only the efficiency of the claims process but also the effectiveness of the claims function. P&C Claims SEP improves insurance carriers’ performance on loss ratio, claim expenses handling ratio, customer satisfaction, and end-to-end settlement cycle time.

Key business challenges we address:

  • Low percentage of Straight Through Processing (STP) resulting in longer settlement time
  • High number of Not in Good Order claims (NIGO) causing productivity issues
  • Loss leakage due to fraud
  • Poor estimate and adjudication quality resulting in loss leakage
  • Challenge of managing multiple vendors within the claims cycle – impacting settlement time and high claims handling expense
  • Loss leakage due to poor subrogation process

Life Insurance: Application to Issue
Life insurance companies face numerous business challenges, including increasing costs per benefit placed, high cycle times of up to 90 days, slow underwriting processes, high customer attrition rates, and legacy systems integration and data validation issues. Applications to Issue SEP provides a framework for acquiring customers by focusing on objectives such as maximizing the placement rate, minimizing the cost of acquisition, and improving producer and customer satisfaction.

Key business challenges we address:

  • Cost reduction in new business acquisition
  • Customer retention and business growth
  • Operational inefficiencies in customer retention and business growth
  • Optimum use of capacity and service levels during significant volume volatility
  • Improved system integration to improve access and flow of information
  • Changes in underwriting rules

After Market Services
After Market Services SEP drives best-in-class performance across the entire service life cycle by increasing service revenue, reducing service costs, and improving customer loyalty. After Market Services SEP is designed to improve various sub-processes such as field service, warranty management, parts management, contact center, product returns and refurbishment, and service contracts. The suite delivers business impact by providing a centralized service support platform for effective local execution with the right mix of people, process, and technology.

Key business challenges we address:

  • Inefficient management of contact center processes, contracts, warranty, parts, and field services
  • Lack of visibility into cost to serve
  • Low success rate in meeting service-related metrics such as first time fix, first call resolution, etc.
  • Inability to manage or control parts inventory on a day-to-day basis requiring heavy warehouse and logistics coordination
  • Multiple technology systems (legacy, web based) leading to inefficiencies

Direct Procurement
Direct Procurement SEP evaluates the client organization’s effectiveness in managing direct materials. Direct Procurement SEP creates a road map for achieving best-in-class performance in key business outcomes such as availability of material (forecasting, demand planning, developing sourcing strategy, negotiating, and contracting), procurement cost (buying processes), and payment efficiency (generating and paying invoices).

Key business challenges we address:

  • Lack of resources to manage all of addressable direct spend
  • Limited accuracy of forecast for direct material demand
  • Ineffective demand planning that leads to material unavailability and poor on-time delivery
  • Limited use of technology, workflows, and other IT tools to improve the productivity and effectiveness of direct spend management
  • Compliance issues (lack of contracted vendor usage, limited contract terms compliance)

B2B Sales and Contract Management
B2B Sales and Contract Management SEP maximizes profitability, a key metrics for managing a portfolio of B2B contracts. The challenges in the current economic scenario are to explicitly address uncertainty, have a systematic structure for monitoring the operating margins, and having a dynamic and iterative process to make best use of the available information.

Key business challenges we address:

  • Lack of efficient process for opportunity identification and effective pricing leading to poor win rates
  • Inaccurate forecasting of failures and maintenance events and the associated cost resulting in poor pricing of service contracts
  • Sustenance of profitability of long-term service contracts as an ongoing challenge for maintenance service providers
  • Billing leakage, non-compliance, and inefficient processes resulting in revenue loss

Commercial Banking
Commercial Lending
Commercial Lending SEP focuses on the effectiveness of prefunding and post-funding operations in commercial lending globally, which comprises activities from the time the customer walks into a store to obtain a lease or loan for small to mid-ticket equipment to the time the lease or loan is closed. They involve application input, underwriting, contract generation, booking/funding, billing, cash application, customer servicing, collections, and asset management. Commercial Lending SEP impacts key business outcomes such as deal conversion, income leakage, cost to serve, delinquencies and losses, and customer satisfaction.

Key business challenges we address:

  • Increased revenue by improving the deal origination conversion rate
  • Improved cost of operation by reducing rework and wasted effort
  • Reduced delinquencies and credit losses
  • Improved operating margin by focusing on major non-price price levers
  • Improved dealer and end-consumer satisfaction

Commercial Credit Risk
Commercial Credit Risk SEP enhances the effectiveness of highly complex and integrated processes through best-in-class industry practices for key functional areas in the Chief Risk Officers’ domain. The focus is to enable credit risk processes achieve the highest level of operational excellence, comply with key regulatory requirements, minimize cost of risk management, and be a driver for balanced growth with profitability. Commercial Credit Risk SEP approach impacts business outcomes by understanding and working on the inter-links between various credit risk functions (i.e., Policy and Governance, Risk Identification and Assessment, Monitoring, Reporting, Control and Mitigation), strives to break down organizational silos causing inefficiencies, and drives effectiveness through synergies.

Key business challenges we address:

  • Lack of a robust portfolio monitoring and review system, absence of proactive early warning triggers, and inadequate use of appropriate portfolio segmentation techniques
  • Inadequacy of risk reporting for internal and regulatory purposes
  • Poor model (PD, LDG, and EAD) management practices and absence of stress testing framework
  • Absence of systems for creating appropriate deal documentation (pre- and post-funding) for internal compliance and regulatory requirements
  • Sub-optimal deal underwriting policies, procedures, and methods impacting turnaround time, approval rate, and deal funding
  • Problem of integrating and consolidating data and multiple source systems; creation of “Golden Source” due to redundant databases, legacy/acquired systems, differential data systems architecture, use of market and third-party data, etc.
  • Broken credit risk (lending) processes – communication and data flows impacted by departmental silos, manual processes as opposed to automated ones, extensive elaborate reconciliation activities, intuitive/judgmental process vs. systemic, inadequacy or absence of process performance measurement systems (metrics and dashboards) and reporting – impact assessment

Trade Promotions
Trade promotions is the second biggest P&L cost item for most consumer goods companies after Cost of Goods Sold. Trade Promotions SEP deals with the end-to-end process across promotion planning, execution, settlements, and post-event evaluation. The key focus of the Trade Promotions SEP suite is to improve the return on investment in trade promotions and process visibility and to minimize leakage across this process.

Key business challenges we address:

  • Effectiveness of trade promotion activities measured given the dynamic nature of how promotion decisions are made by retailers
  • Low end-to-end visibility across the trade promotions process
  • Lack of verification and validation to prevent unauthorized expense or non-compliance by retail trade partners

Capital Markets
Collateral Management
With increasing focus on the collateral management function by industry participants and regulators across the globe, Collateral Management SEP enables enterprise to achieve best-in-class performance on key business outcomes such as minimizing exposure against a counterpart default, increasing funding capacity, complying with the regulatory requirements including internal policies, and reducing the total cost of ownership.
Collateral Management SEP provides end-to-end capabilities to transform the collateral management function and to benchmark your collateral management process against industry best practices. This will be delivered by using domain expertise to reengineer the process, to provide analytics, transaction processing, and technology capability for meeting rapidly evolving requirements.

Key business challenges we address:

  • Reduced locked-in capital within the regulatory framework
  • Front office and treasury funding desk liquidity risk management function aligned with collateral management objectives
  • Lack of a single view of the counterpart credit risk exposure across asset classes
  • Lack of a single view of the collateral inventory and categorization of collateral
  • Process and technology efficiency for managing complex processing of collateral optimization, transformation, substitution, collateral earnings and making infrequent margin calls, standardization of valuation across the firm
  • Collateral process managed within the turnaround time
  • Regulatory initiatives for standardization and transparency in Over the Counter (OTC) derivative and Federal Reserve Bank of New York initiative to eliminate same-day credit in repurchases (repo) market

Client Account On-boarding
Client On-boarding and Account Management (COBAM) SEP deals with the process of on-boarding a client entity and activating it in the system to do business with the firm. COBAM SEP enables firms to review and refine underlying processes, technologies, workflows holistically in terms of their impact on business outcomes such as improving revenue assurance, client servicing, regulatory compliance, and reducing operational costs and risks.

Key business challenges we address using our COBAM SEP:

  • Lack of single customer view for improved counterpart exposure calculation and cross-sell opportunities
  • Manual, fragmented, and inefficient processes and platforms leading to operational inefficiencies and reduced data quality
  • Paradigm shift from account centric to customer centric environment
  • Back-logged remediation and reviews on on-boarded entities and corresponding documentation
  • Adoption of regulatory mandates such as Legal Entity Identifier (LEI), Entity hierarchy, FATCA compliance

Smart Enterprise Processes - SEP Solutions

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