It pays to be Process Oriented!

One of the areas which most organizations talk about being important to their business but is relegated to being the pain point in their day to day operations is processes (the other close competitors would be compliance & technology, although the first one does manage to have considerable power). In spite of the initiative taken, once in a while, by a well meaning business unit head or a CEO, processes in any organization remains, unfortunately, something which is good to have – let’s have it, document it and forget about it. Why bother about it when the business is making money eh?

Well, with mammoth financial institutions having a history of more than a century folding up within just a week, people will now wake up to the importance of having a laid down process and following the process to a T.

How many times in our career have we come against an argument that we are losing business and so why don’t we tweak that process a little bit? Well it definitely works that way in most organizations but the perpetrators are too short sighted to see and understand that in the long term it ends up hurting the very business that they were clamouring to build.
Not that these venerable institutions didn’t have a risk management process. Assuming that would be a childish if not an imbecile thought. But the real question is how much of importance was given to the laid down processes in the mad run for generating business and making money.

Financial institutions which should worry about three different costs – cost of funds, cost of operations and cost of compliance, by ignoring to follow the processes unknowingly ends up adding to the cost of operations which ultimately adds to the cost of funds and when things get out of control, finally to cost of compliance!!