Banco Compartamos

Expanding Financial Institution Opens Bank Branches 11 Percent Faster

Banco Compartamos (Compartamos) leads the Mexican and Latin American markets in issuing microloans to entrepreneurs. In June 2006, Compartamos received a bank charter and is developing a new set of policies, procedures, and products to ensure bank regulatory compliance. To help Compartamos in its transition and realize its growth goals, the bank is expanding its portfolio of services and opening new branches. The Methods & Procedures (M&P) Group is responsible for the development, review, approval, and distribution of bank policy including the documentation required to open and operate new branches. To develop a more secure and accurate document lifecycle, Compartamos is using the 2007 Microsoft® Office system. Compartamos expects to reduce the cycle time to draft and approve M&P documents and anticipates a reduction in branch opening time by 11 percent, from 90 to 80 days.

Situation

The financial institution Banco Compartamos (Compartamos) leads the Mexican and Latin American markets in issuing very small loans, also known as microloans, which provide individuals access to finances that will help them start businesses. Microloans are extended to individuals who are often unemployed or are living in poverty. These individuals usually cannot meet minimum requirements—such as collateral, employment, or sufficient credit history—to qualify for a typical bank loan, and therefore have no access to traditional credit. Compartamos is a socially oriented company, with a mission to stimulate economic development in communities and help individuals finance the start of their own businesses.

In order to meet the financial needs of Mexico's micro-entrepreneurs, Compartamos and the worldwide microfinance organization ACCION International formed a strategic alliance to help Compartamos transform into a regulated banking institution. This new regulatory status has given Compartamos the ability to develop a completely new portfolio of products and services for its banking customers.

Business Priorities

Compartamos’s vision is to obtain, by 2008, 1 million loan customers, as well as to increase its service portfolio beyond loans. To accomplish its goal, Compartamos has identified specific business priorities that include:

• Expanding the products and services that its branches offer.
• Expanding the number of branches.
• Ensuring compliance with Mexican banking regulations under which it must operate.
• Cost-effective regulatory compliance 

For Compartamos to reach its goal of obtaining 1 million loan customers by 2008, it was important to re-evaluate processes and ensure that it was maximizing speed and efficiency when opening new branches. As part of the process to open a branch, Compartamos realized it needed to improve the step of providing administrative documentation on banking policies and procedures to those new branches.

Challenges in Managing the Methods & Procedures Process

When running and opening a new branch of Compartamos, the bank needs to ensure the continuity of the products and services it offers. An important part of this is providing banking procedures and policies; operational instructions; and information on products and services such as instruction manuals, product guides, guidelines, and forms.

At Compartamos, the Methods & Procedures (M&P) Group is responsible for creating, updating, reviewing, approving, and distributing this information, which is referred to as M&P documentation, to all employees in the company. This responsibility is enormously complex because Compartamos has 3,000 employees who can submit M&P requirement change requests to the central M&P group, which consists of only 6 people. The M&P group is then responsible for drafting, making changes, circulating changes through the appropriate review and approval process, and distributing the modified version to field employees. Throughout this process the M&P Group needs to track changes and approvals done on the M&P documents.

Ensuring that all branch employees have all the updated M&P documentation has become an increasingly important process for Compartamos. Since it has recently been granted status as a chartered bank, the current M&P documentation now needs to be changed to comply with banking regulations. These banking regulations require that banks be able to provide an audit trail including tracking of the development and distribution of banking procedures and policies.

It is beneficial for Banco Compartamos that the M&P process is efficient because this will help us offer new products in less time. This gives us a competitive advantage over other banks. Miguel Angel Tena Calderon IT Development LeaderBanco Compartamos

However, the exiting M&P process was manual and paper-based, which caused issues with versioning and traceability. Juan Manuel Chavez, Manager of the M&P Group at Compartamos, describes the difficulties of the process: “The drafting and approval of the Methods & Procedures documents used to be a highly manual and paper-based process that was very time-consuming and difficult for tracking the review and approval.”

M&P documentation was drafted through a combination of paper and electronic copies, which made tracking modifications during this phase very difficult. Changes made when editing, or additions made by various contributors, were not always reflected in the final draft version. Security was also an issue since any employee could make changes to the documents without defined security levels or access rights for readers or contributors. Reviewing and approving documentation was completed through a manual hand-off, e-mail, or fax exchange, which made it difficult to track the document’s status. The M&P Group experienced challenges in making sure the right people were reviewing and approving the documents.

The process was time-consuming and costly, and distributing M&P documents to all employees and bank branches was slow and inefficient. Eventually, this could cause delays in offering and launching new products or services, or cause discrepancies in the operations between different bank branches. Delays and discrepancies also sometimes created a negative impact on the customer’s perspective of Compartamos’s quality of service. Finally, since the bank was not able to easily track or provide audit trails for the documentation, it did not comply with banking regulations.

Figure 1 is a brief overview of the business processes by which the leaders of the M&P Group of Compartamos run their business.

Figure 1. Methods & Procedures management process and subprocesses

 

 

 

 

 

 

 

Critical Success Factors for the M&P Process

An efficient M&P documentation process is essential for Compartamos to be able to bring new products and services to the branches and its customers faster. Chavez identified several critical success factors and associated key performance indicators (KPIs) for managing the M&P process:

• Improve speed-to-market (KPI: average days to open branch (from planning to opening).
• Accelerate the time to launch a new branch (KPI: time to reach 1,000 clients for a branch, break-even point).
• Ensure M&P documents meet regulatory requirements (KPI: cost of compliance: average cost per audit per branch, costs saved by being compliant).
• Reduce time to create or update M&P documents (KPI: days to draft and approve M&P document, days from receipt of request to distribution of updated M&P).

Miguel Angel Tena Calderon, IT Development Leader at Banco Compartamos, comments on the critical success factors: “It is beneficial for Banco Compartamos that the M&P process is efficient because this will help us offer new products in less time. This gives us a competitive advantage over other banks.”

The identification of the critical success factors for the M&P process helped Compartamos recognize some areas of improvement for the process.

Solution

In order to address these areas of improvement to accelerate and ensure the security of the M&P process, Compartamos engaged Micronext, a Microsoft® Gold Certified Partner. Compartamos adopted a solution to accelerate, facilitate, and track the M&P process. During their pilot, Compartamos deployed Microsoft Office SharePoint Server 2007 and Microsoft Office Professional Plus 2007, including Microsoft Office Word 2007, Microsoft Office Excel® 2007 spreadsheet software, Microsoft Office Outlook® 2007 messaging and collaboration client, Microsoft Office InfoPath® 2007 information gathering program, and Microsoft Office Visio® 2007 drawing and diagramming software.

See Figure 2 for a detailed description of how each step of the M&P process (as detailed in the Process Level 2 of Figure 1) is improved, resulting in a specific benefit.

Figure 2. Breakdown of improvements and benefits for each step of the Methods & Procedures process

Step	Activity	Current Process	Business Process Improvement	Benefit
1	Draft M&P	M&P documents were being created through a combination of paper and electronic copies. Modifications made to documents were difficult to trace.	Administrative documents can be created quickly and easily using pre-built forms and using commonly used content for documents.	Manual paper-based process can now be done electronically and changes to documents can be tracked.
2	Review and approve M&P	The process to relay documentation to be reviewed and approved was manual or through e-mail or fax. It was difficult to track and manage who had access to the documents. It was also difficult to make sure that the right people were reviewing and approving documents.	Documentation can be easily tracked and individuals can be prompted through a workflow and e-mail when their review and approval is needed.	The review and approval cycle time has decreased significantly and documents can be easily tracked and managed throughout the process.
3	Distribute M&P	M&P documents were distributed through e-mail and fax, which created versioning issues. It was difficult to get access to documents.	Documents can be stored in a centralized repository so that employees can search for the latest version of specific documents.	Versioning issues will be improved. The time required to find documents will decrease significantly.
4	Modify M&P	Modifications were not effectively managed so that employees may have had earlier versions of documents.	Modifications can be made electronically through features such as Track Changes.	Modifications can be done faster, eliminating much paperwork.
5	Redistribute M&P	Distribution of modified M&P documentation was done through manual, e-mail, or fax exchanges, which caused issues with traceability and versioning.	Redistribution is done by storing documentation in the central repository and through e-mail alerts of modifications to new versions.	Redistribution is quicker and employees can be assured they are working from the latest versions.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business Strategies and Tools Used to Enhance the M&P Process

By working with the newest productivity tools from the 2007 Microsoft Office release, Compartamos was able to improve and automate almost the entire documentation of the M&P process and to enhance its cost effectiveness, timeliness, and security.

Streamlined M&P Creation, Review, Approval, and Updating

The solution will allow Compartamos to streamline M&P document creation, review, approval, and updates.

The drafting and approval of the Methods & Procedures documents used to be a highly manual and paper-based process that was very time-consuming and difficult for tracking the review and approval. Juan Manuel Chavez Manager, Methods & Procedures Group, Banco Compartamos

Office Word 2007 will facilitate the creation of professional-looking content by combining a comprehensive set of writing tools with an easy-to-use interface. Building Blocks in Office Word 2007 can be used to assemble documents from frequently used or predefined content such as disclaimer text, pull quotes, sidebars, cover pages, and other types of content. Using Quick Styles and Document Themes, employees can quickly change the appearance of text, tables, and graphics throughout the entire document to match a preferred style or color scheme.

Features of Office SharePoint Server 2007 and Office Outlook 2007 will allow the M&P group to expedite the process of creating, reviewing, and approving documents, as well as making updates to them. To accelerate the process, the M&P Group can use document workspaces to manage the workflow and tracking required in developing bank policy.

Compartamos will be able to take advantage of built-in automated workflows in Office SharePoint Server 2007 for initiating, tracking, and reporting steps of the M&P process, including document review and approval, issue tracking, and signature collection. Important alerts and task information can be displayed in the document, helping to ensure that workflow steps are properly followed.

Tracking and Historic Control of Documents to Fulfill Banking Regulations

Using Office SharePoint Server 2007, the M&P Group can standardize workflow processes and facilitate tracking of bank policy development in order to meet banking regulations. The integration of Office SharePoint Server 2007 and Office InfoPath 2007 with automatic e-mail notifications from Office Outlook 2007 enables initiation, participation, tracking, and reporting, which help fulfill banking regulations.

Appropriate Security Levels for All M&P Documentation

Office SharePoint Server 2007 improves the safeguarding of information by allowing document management and compliance policy definition through access rights at a per-item and per-user level. In addition, the Information Rights Management applicable to Microsoft Office documents helps prevent the misuse of confidential information. While all information is available to the company through advanced search capabilities, the functionality will only show search results that are appropriate for the user’s access rights.

Advanced Search Capabilities for Employees to Find M&P Documentation

With search results that correspond to security permissions, Office SharePoint Server 2007 lets users go beyond documents and across document libraries to unlock information, find people, and locate expertise in the company. Office SharePoint Server 2007 provides the ability to find relevant content in a wide range of archives and formats. Office SharePoint Server 2007 also enhances the ability to easily search for and find M&P documentation online by enabling a centralized, company-wide library of documents that provides a consistent mechanism to organize, categorize, and navigate content.

Improved Information Gathering of Change-Request Data

With Office SharePoint Server 2007, the M&P Group can create, maintain, and analyze custom workflows related to the collaborative process of gathering information on change requests. Electronic forms provided through InfoPath Forms Services are an integral part of this workflow. The electronic InfoPath Forms make it easy to collect and validate the information that drives this business process. Office InfoPath 2007 improves the aggregation of M&P change request data by enabling an organized and repeatable method to capture change request information. Data validation, screen tips, and conditional formatting in Office InfoPath 2007 also help enable employees to collect the right information. The change request forms will be used by the M&P Group to manage change requests from employees on creating or updating new bank policies.

Implementation of a Measurable M&P Process

The Office Visio 2007 drawing and diagramming software makes it easy for the M&P Group to visualize, explore, and communicate complex information. Using Office Visio 2007, the M&P Group can create and visualize an optimized process flow, which will enable employees to effectively document, design, and better understand the M&P process.

Complicated text and tables that would have been hard to understand can be communicated easily through Office Visio 2007 diagrams. The bank staff can save these diagrams in PDF format files or as Web pages and efficiently share and communicate the information across the bank. The M&P Group can use the wide variety of diagrams in Office Visio 2007 to understand, act on, and share information about organizational systems, resources, and processes throughout the group and even the entire bank. All features work together to make the M&P process measurable by visualizing bottlenecks and the optimal process and tracking its progress.

Benefits

Through the implementation of the 2007 Microsoft Office system, Compartamos expects to experience several improvements in its M&P process. With the new automated workflow, the Compartamos M&P Group will be able to relay important information regarding branch openings and operations leading to faster branch openings. (See Figure 3 for the KPIs for the new M&P process.)

Figure 3. Expected impact of the key performance indicators for the M&P process

Key Performance Indicator	Type of KPI Impact
Time to open branch	Increase revenue
Time to reach 1000 loan customers	Increase revenue
Time to draft/approve M&P document	Decrease costs
Cost to train each employee on M&P process	Decrease costs
Cycle time of the M&P process	Decrease costs
Cost of compliance	Improve compliance

 

 

 

 

 

 

 

Tena Calderon comments, “Our customers were requesting more product and service offerings, such as savings accounts, insurance, and other types of credit. With the more efficient M&P documentation process, we will be able to bring the products that our customers demand to the bank branches more rapidly in order to satisfy their needs.”

Reduced Time to Open a New Branch

Chavez says, “It will be easier to create the product guides and other product documentation necessary for the new branches in preparation for the rollout of five new products in 2007.” As a benefit of the workflow and document management solution, Compartamos expects to reduce the time required to open a new branch by 11 percent, from 90 days to 80 days.

Compartamos will be able to distribute M&P documentation faster and more securely. Doing so will allow all Compartamos employees to access the most up-to-date instruction manuals, product guides, forms, processes, procedures, and any other kind of administrative documents required to open a new branch and begin providing products and services.

Improved Compliance to Banking Regulations and Reduced Compliance Audit Costs

The drafting and approval of the Methods & Procedures documents used to be a highly manual and paper-based process that was very time-consuming and difficult for tracking the review and approval. Juan Manuel Chavez Manager, Methods & Procedures Group, Banco Compartamos

The document management solution helps Compartamos meet the regulatory requirements of its new banking role. The solution allows the bank to track documents and communication and audit trails. Now, Compartamos can readily address regulatory requirements for all documentation, including project management, security, and more.

Compartamos will be able to track and maintain document history. Version control features will allow the manager of the M&P Group to better manage all documents and follow up more easily on the recommendations provided by audits. Following up on audit recommendations makes it much easier to comply with banking regulations and can help prevent fines associated with noncompliance.

Increased Operational Efficiency and Employee Productivity

Compartamos has replaced paper-based, manual processes with the automated workflow and document management solution, streamlining its processes and reducing the time previously required to create, review, and approve documents.

In addition to achieving operational efficiency, Compartamos also expects increased employee productivity. Because each document can be assigned with exclusive permissions (to readers, approvers, collaborators, and editors), Compartamos’s employees will take less time locating and accessing documents they need. By seeing and working only with the documents that they need, employees can increase their overall productivity.

Reduced Cost to Train Employees

Compartamos will be able to reduce the time required to train new employees on M&P because they will be familiar with the user interface of the 2007 Microsoft Office system products. Additionally, employees will find it easier to create, use, and find documents. Features of InfoPath Forms will help reduce the time employees need to build and become familiar with a certain form especially when managing M&P change requests. A centralized library will allow employees to access and learn how to use documents faster. Since less time will be spent training employees on the new solution, Compartamos will also be able to decrease training costs.

Higher Customer Satisfaction

Accelerating the M&P documentation process will allow Compartamos to bring new products and services to the branches more quickly. In addition, the process will help ensure that each branch has the information and documents it needs for each new product, service, or banking regulation. Chavez describes how the accelerated M&P documentation process will increase customer satisfaction, “The biggest advantage that the solution provides Compartamos is to accelerate the rolling out of new products. For the past two years, we have been trying to offer the products and services, such as savings and home improvement loans, that our customers are requesting. The new regulatory status has enabled us to provide these products and services. Now with this solution, we will be able to offer them even faster.” Because Compartamos will be able to offer new products and financial services faster, and its customers’ needs and demands will be met, those customers will also be more satisfied.

Partner Profile

Micronext, created in 2001 and based in Mexico, is involved with information technology consulting, services, and solutions. It focuses on private- sector companies, as well as educational organizations. Micronext is a Microsoft Gold Certified Partner.
 
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About Business Value Assessment
This business value research study was developed by Capgemini using the Microsoft Rapid Economic Justification (REJ) Framework to assess the business value of the 2007 Microsoft Office system.

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For more information about Micronext products and services, visit the Web site at:
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For more information about Banco Compartamos products and services, visit the Web site at:
www.compartamos.com