Case Study: Performance Excellence Improves Mutual Fund Accounting

Opportunity: A major New York City mutual fund organization required extensive and time-sensitive "back-office" processing to enter transactions, clear trades and to provide information to its clients. Data entry, corrections and trade clearance represented high-volume transaction processing functions. Each transaction could represent substantial monetary value, and the costs of errors or delayed handling could be extensive. Three operations were particularly important; namely, accurate entry of client trade information, timely and accurate processing of corrections, and timely report delivery to clients. Even though the processes for these operations were well developed, their successful execution remained highly dependent upon consistent human performance. Concerns over customer complaints and excessive processing errors emphasized the need to find ways to improve these performances.

Performance Excellence Audit: Reviews of operational procedures, critical incidents and meetings with clients identified several issues which could impact operations effectiveness:

Operating and Management Process Improvements: Three key performances were defined: timely report delivery to clients; accurate entry of client trade information and corrections, and timely processing of corrections. Working with clients, operations management and operations personnel, policy statements were developed, and guidelines were established for each of these key deliverables. To improve process assurance, methods of tracking performance on a daily and summary basis were developed, and results were graphed daily. An exception checklist was developed for clients to use to evaluate the services they received, and they were provided lists indicating specific individuals who could be contacted for assistance.

Results: Over a four-month period, the percentage of reports which were delivered to the trading exchanges by agreed-upon times increased from 74% to 86%. The percentage of client corrections requested which were not processed on-time decreased from 5% to less than 1%. The total number of re-corrections required decreased by 55%, and the percent of re-corrections required due to data entry errors decreased by 26%. The percentage of days on which re-corrections were required decreased by 68%, while the percentage of days on which re-corrections were required due to data entry errors decreased by 77%. Overall, the percentage of data entry errors on trade entry decreased 32%.

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Revised: April 13, 2008.
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