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Company: Computershare - July 2003
Theme: Feature article

Title: Computershare cuts costs and enhances service through process improvement

Share registrar Computershare recently completed a six-month project designed to improve service to customers, reduce costs and introduce process measurement. Spurred on by pressure from its parent company in Australia, and the internal process issues that emerged as a result of the merger of Computershare with rival Mercantile registrars last year, CEO Frik Vermaak took a firm stand in January this year to implement change. As a result, Computershare has reduced costs by 30 percent, streamlined its workforce and, through increased productivity, is offering a better service to clients.
Says Vermaak, “The fact that in comparison with Computershare’s companies globally we used far more resources, was a key indicator that change had to take place. The financial market in South Africa has undergone significant change recently and it meant we needed to adjust to our external environment by adapting our internal processes accordingly with a complete business process redesign.”
To identify a partner to guide and implement the project, Computershare consulted with other players in the market. After a selection process, Proudfoot Consulting was chosen based on their knowledge of processes, thoroughness and the tools they would apply, and leave behind.
The Proudfoot style of consulting is very ‘hands-on’ and Computershare employees soon felt the first stirrings of change after a task team was formed, comprised of dedicated members of both companies, and Project Sekusile, meaning ‘New Dawn’ was born.
Proudfoot’s business process redesign methodology guided the task team, but the softer issues threatened the project’s success. Change inevitably spells fear, and the union capitalised on this to obstruct the process, resulting in a three-day strike and little cooperation in the early information-sharing sessions. Computershare empowered its communication, human resources and industrial relations departments to do what it took to ensure the process went forward. The ‘no-work-no-pay’ policy brought an end to strike activity, and comprehensive, ongoing communication eventually secured the buy-in from employees.
“Staff realised that change was essential to the company’s survival, and that it would positively impact on their daily lives, so we were able to take hands and face it together,” says Vermaak.
The project began with brown-paper critiquing of the existing processes. With ongoing staff involvement, activities were identified and staff interviewed to establish where problems occurred.
“Every activity was observed and analysed in terms of volumes and frequency, and an hourly allocation made to each. All in all, more than 100 workflows were reviewed, resulting in 300 improvement critiques,” says Computershare’s Re-engineering Manager, Charnré van Zyl.
The process unfolded to reveal data around all core activities. This data formed the basis of the AIM management system - Assign, Input, Measure – an enduring tool enabling productivity measurement, planning and, ultimately, tighter management control over departmental processes and people. A forecasting model was developed that is volume-driven and links back to historical information. “By highlighting skills gaps and ensuring the necessary training takes place, the company is getting more out of every individual,” comments Proudfoot Project Manager, John Mullany. “Computershare is now cultivating generalists who are able to step into other departments at peak times, thereby reducing the need to recruit temporary staff.”
Areas of low productivity were uncovered and decisions taken whether to train or incapacitate staff.
“An important part of communication with management and staff meant defining productivity,” says John. “Companies still picture a factory assembly line when we talk about productivity. The mindset had to be changed to relate productivity to a transaction-based environment. About 70 percent of a South African organisation’s costs go to labour. In Australia, for example, this percentage is less than 50. Through a project such as Sekusile, the link between productivity and cost-saving becomes obvious.”
To reach its targets, Computershare had to reduce its staff complement by more than 150. A large portion of this number was temporary staff, and a many elected to take voluntary retrenchment. At the end of the day only 33 involuntary retrenchments were necessary.
But this was a heavy cross to bear. “Computershare engaged the Joint Education Trust to provide emotional and financial counseling in workshops conducted in their mother tongue. They left the sessions with the tools to face their circumstances and identify opportunities. The company also put funds aside so that each person could acquire new skills,” explains Vermaak.
“Project Sekusile was a success and will have a lasting effect,” says Vermaak. “The cost-saving objective was achieved and a sound measurement process now exists. With the AIM system and daily departmental meetings, management has current scientific data with which to manage, plan and forecast, and staff know what their role is within the organization and what their outputs are every day,” says Vermaak. “As for productivity, we are getting there. Initial analysis showed that some departments were incapable of operating at a higher rate, and even these are showing significant progress. Improved service levels are at the heart of everything we do. The effects of Project Sekusile will become increasingly evident to our clients.”
And none of this required new technology. The AIM system is run on Microsoft Excel, so anyone can use it.
Project Sekusile won’t end with the departure of Proudfoot. A Continuing Process Improvement (CPI) team, made up of three members of the original Project Sekusile task team remains as a permanent fixture at Computershare. Having benefited from Proudfoot’s knowledge and skills transfer, they will ensure that the areas of concern highlighted in the AIM reporting will be fed back into the process and dealt with.
“Project Sekusile has certainly brought Computershare together,” adds Tom Cook, Proudfoot Operations Director. “When we came in, Computershare was an example of a failed merger. It isn’t anymore.” ENDS.