Journey of Transformation

Liam WardAMP Head of Operations HR

• Since 1849 AMP has been the leading independent wealth

management company in Australia and New Zealand.

• AMP operates four core businesses: Financial Advice,

Superannuation, Banking, Investments, Life Insurance &

Retirement Services.

• AMP are helping more than five million customers in Australia and

New Zealand own tomorrow.

• AMP manage A$159 billion in assets for our customers.

• AMP has around 945,000 shareholders.

• 6,000 employees across Australia, New Zealand and Asia help

service our financial planners, customers and shareholders.

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About AMP

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ING slashes 7,000 jobs, CEO leaves

January 26, 2010

Japan in cris

is as

jobs slashed

February 1, 2009

Australian budget to go into

deficit as financial crisis wipes

$115bn from tax revenue

AA

P

February 02, 2010

Korean exports shrin

k

by one-third

February 2, 2009 - 3

:03PM

Nikkei slumps on news of factory slowdown日経は日本メーカーの売り上げ低迷のニュースにより深刻な状況へ

January 30, 2009

Our Current World is Rapid Discontinuous Change

The start of the Journey (Why?)

• Due to the GFC there was a need to aggressively reduce our unit cost to be inline with ING Global targets.

• There was little understanding of process frameworks and how they related to our performance.

• During 2008 INGLJ Operations found the need to place a greater structure around the daily operations of its Contact Centre, Underwriting and Administration areas.

• Improving productivity ,increasing the quality of service provided to customers while reducing the cost per transaction all became key measurements.

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• A detailed 4 week audit of the Operations area in November 2008 was conducted to identify operational improvements.

• Through this process it was identified that there was not a solid performance governance model. There were a number of challenges to this:

Only a small number of our processes were identified and mapped.

Process knowledge mainly stored in peoples heads. There was no common process governance. Inconsistent performance indicators. Lack of visibility of day to day workload. Quality of output not consistently assessed in all areas of

Operations.

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Creating the Transformer Program

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There were four main initiatives which formed the Transformer Program. The aim of the program was to make ING Life Japan a best practice Operations environment. The initiatives were;

1. Streamline the complexities of processes.

2. Implement a Management Operating Methodology.

3. Introduce a Quality Assurance Program.

4. Increase Employee Engagement.

　

Process Improvement

Management Operating

Methodology

Quality Assurance People

Transformer

Program

The key objective of the Transformer program was to:

“To be recognized as having a best practice operational area within the ING Asia Pacific Region”

Transformer Program

Goals of Process ImprovementCreate a Business Process Framework for the Operations area

based on best practice models.Review all activities from a value-add perspective for our

customers and apply Lean Principle to them.Eliminate waste, over burdens & unevenness.Visualise value streams, processes and daily workload.Train & involve all employees to be Process Improvement key

value creators.Reduce headcount by 30%Reduce overtime by 14%

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Process

Hierarchy

Transaction Service Level

Service Expectati

on

Annual volume

Process Map

Has this process

optimized?Memo

Paying Out

Surrender 2 Days 10min 54383 Y Y

Policy Loan 2 Days 15min 4304 N N

Paid Up 2 Days 5min 1204 N N

Cancelation of rider 2 Days 6.5min 197 N N

Amount reduction 2 Days 9min 2541 N N

Correct Bank Account information 1 Day 8.5min 173 N N

Paying In

Billing/Paying-in Type A 1 Day 7min 52523 Y Y

Billing/Paying-in Type B 1 Day 7min 1889 Y Y

Billing/Paying-in (Group) 1 Day 11min 518743 Y Y

Alteration

Change of Address 2 Days 2min 33754 Y Y

Change of Name 2 Days 4min 3832 Y Y

Change of Date of Birth 2 Days 4min 69 Y N

Change of Owner 2 Days 6min 1837 Y Y

• The BPFM is an excel tool that holds all the operational specifics to a process.

• This tool is used to provide full visibility in priority setting for process improvements.

Business Process Framework Matrix (BPFM)

Business Process Framework (BPF) is a management approach focused on aligning all aspects of an organisation with the wants and

needs of clients and stakeholders.

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Modeling

Execution

Business Process

Framework

Life-Cycle

Monitorin

g

Opt

imiz

atio

nDesign

Creating a BPF Life Cycle

An intranet site was created on Share Point to provide the information to all Operations employees.

The contents within the site; AS-IS process maps TO-BE process maps Training materials i.e. guides

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Process Library

Through the BPF process we identified three key objectives:

1. Reduce the unit cost of our transactions;

2. Reduce the number of touch points in our processes; and

3. Involve every employee in Operations to participate in the process improvement journey.

As a result we created two programs to run under the Process Improvement banner. The programs were to run concurrently while complementing each other in optimising our existing processes.

The programs;• One Touch• Lean Kaizen

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One Touch & Lean Kaizen

Eliminate the waiting time and unnecessary interruption. Focus on true customer value, eliminate excessive over-quality.Take “pull principle”, change “push principle”, to eliminate over-

processing.Leveling workload imbalance and train the employees to be multi-

skilled to work a broader range of processes.Identify the wastes, leveraging bottom up approach, and collect

Kaizen ideas from all employees to fix them.Encourage all employees to be essential Lean drivers.

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Lean Kaizen Program Concept

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ProcessOwner

UW 1

Program sponsor : COO

Facilitator:Business Transformation Team

Project sponsor : Division Managers

UW 2 CS 1 CS2 CS3 CS4 CS5 CS6 CC1 CC2 CC3 OpB1 OpB2

Lean Kaizen Program Organization

Tasks Mar Apr May Jun Jul

1 Hold Lean Program 2010 Briefing session

2 Hold Kick off meeting （ Present the Project charter）

3 Do Lean Office Assessment (AS-IS)

4 Create AS-IS value stream map

5 Decide the Kaizen Point

6 Set the "Lean Metrics“ (Target)

7 Create TO-BE value-stream map

8 Validate the TO-BE value stream map

9 Set the Action plan/Training plan

10 Train the staffs

11 Pilot

12 Do Lean Office Assessment (TO-BE)

13 Measure the result

14 Implement Optimized Process

15 Monitor the new process

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Project Schedule

• In total there were 18 processes in Administration that had been chosen which covered 96% of the transaction volumes.

• The selection of these processes were determined by volume and risk to the business.

• All Administration Processes have been defined by either Major or Minor Processes.

• The Definition:

Major – Any and all processes with a transaction volume higher than 100 annually or monies coming in/out of the business.

Minor - Any and all processes with a transaction volume less than 100 annually or no payment related activity.

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One Touch Transformation

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Step 1

Step 2

Step 3

Ste

p 4

4. Communicate & Train on the New Processes 1.Complete current Service Expectation’s (SE)& Process Maps

One Touch

2. Complete New Maps & Time SE’s

3. Seek Approval & Signoff of One Touch Processes

One Optimization Transformation

ＳｏｒｔRemove unnecessary items

Set in OrderArrange necessary items for easy

And efficient accessSustain

Education to ensure thatEveryone follows ①-④

StandardizeCreate guideline to ensure keeping ①-③ every day

ShineCleaning everything

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• 5S is an improvement process, originally summarised by five words beginning with S, to create a workplace that will meet the criteria of visual control and lean.

5S as essential wisdom to be implemented

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What is a Management Operating Methodology (MOM)?• The MOM is a framework within which employees do their work• It is a consistent, reliable and integrated system for planning,

decision-making, executing and reporting on client activities

Management Operating Methodology

• A key to the success of the MOM is the ability to visualise the business.

• There are four main tools;1. Master Schedule – an excel based tool that incorporates

forecasts, daily schedules and a monthly summary of resources.

2. Daily Reporting – a hybrid of our mainframe systems and Excel. The daily report displays the results for the previous day by each team.

3. Whiteboards – displaying team results and communications.4. Huddles – daily meetings to discuss results and plan for the

day.

• These tools are critical to driving a focus to exceed our goals for our clients, employees and shareholders.

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MOM Tools

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MOM in Action (Daily Huddle)

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The Quality Assurance Program consists of four major components.

Complaints- Complaints handling- Reporting of complaints

- Action plans to reduce complaints

Quality Control- Check and approve 100% of all critical transactions

- All approvals are captured in a data base

- Rework is captured and reported on

Voice of Customer - Survey Customers

- Reporting of Net Promoter Score

- Action plans to reduce complaints

Quality Monitor Program- Conduct quality reviews on all client service value chain

- Report quality results

- Action plans to reduce errors

Quality Assurance (QA)

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00:0005:0010:0015:0020:0025:00AHT （min）

# of CALLS/CSR/DAY

In a recent benchmarking survey conducted on the Japanese insurance industry ING Life Japan was number 1 in all key measurements of productivity, service and performance.

Benchmark study of Life Insurance companies in Japan

Process As is SE One Touch SE Benefit per Transaction (sec)

Benefit per Transaction (%)

Change of Beneficiary 985 630 ▲ 355 ▲ 36.0

Change of Name 1200 768 ▲ 432 ▲ 36.0

Change of Owner 1507 1065 ▲ 442 ▲ 29.3

Change of Address 453 250 ▲ 203 ▲ 44.8

Re-issue of Policy 1 800 519 ▲ 281 ▲ 35.1

Re-issue of Policy 2 933 456 ▲ 477 ▲ 51.1

Fund Switch 1 by phone 597 573 ▲ 24 ▲ 4.0

Fund Switch 2 by mail 886 646 ▲ 240 ▲ 27.1

Withdrawal 334 283 ▲ 51 ▲ 15.3

Re-issue of Policy 1 800 519 ▲ 281 ▲ 5.1

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Through the introduction of One Touch there have been significant improvements in processing times across all processes.

One Touch Results

Division 2009 2011

Contact Center 37 30

POS 74 39

UW 56 24

Op’s Total 167 93

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Since the introduction of the Transformer Program there have been strong productivity improvements which have lead to a redistribution of our human capital.

The total cost of the Program so far has been equivalent to 4FTE.

Human Capital Improvement

Questions?