Template:M intro work What will It look like

The head of documentation at a broker I once knew was offered free internal consulting time, ostensibly, to workshop what kinds of technology could be applied to her operation to enhance and streamline the documentation and onboarding process.

(Onboarding is a perennial thorn in the paw of any good-sized financial institution. It takes forever, is incredibly fiddly, covers many basic risks, but is regarded as a dead weight amongst revenue generating staff: a four-month period that essentially retards the basis business of making money.)

Free money and resources in a financial services organisation are rare so she leapt at the chance.

The formal business of documenting master trading arrangements across a full service global broker is immensely complicated. There are ten basic products, fifteen different counterparty types and over one hundred jurisdictions, so simply maintaining consistent templates is a monstrous business.

So the docs team head said, “this is great. A robust document assembly application will cut out an enormous amount of work”.

The internal consultant said, “perhaps so. But we should test that.”

What the consultant proposed was this:

Break down process

Divide the onboarding process, as best you can, into its major components. After Referral, KYC and Credit Sanctioning the file would hit the documentation team’s “milestone”. The doc team’s components were something like this:

1. Allocation to a negotiator
2. Liaise with Credit to finalise credit terms - often the file would carry incomplete instructions from Credit
3. Assemble and send draft
4. Await comments
5. Resolve comments, liaising with relevant internal stakeholders as required
6. Amend and send redraft
7. Repeat previous three steps until all comments cleared and agreement reached.
8. Compile closing memo containing record of all deviations from pre-approved template
9. Send for execution
10. Send executed document for filing and formal logging in firm’srisk systems.

Estimate critical path

Next three consultant said, okay, for each stage in that process, estimate the fastest possible time you could conceivably carry out that job, assuming you were doing it thoroughly, and all stars were aligned, and everyone on whom the process depends responds promptly and accurately.

Then estimate what would would expect the median time for that process, assuming normal operating conditions: normal amounts of confusion, delay, interruption and interpersonal interaction.

Then estimate a realistic bad outcome for each phase, where things did not go well at all. Not impossibly bad, but “within a range of actual experience” bad. (This could still be pretty bad: one organisation took four years to conclude a basic stock lending agreement between two European affiliates.)

Now, plot these three lines on a chart.

As you can see in each case, there is significant variation. The more requirement for horizontal interaction within the firm to complete the task, the greater the variance — because the negotiator lost effective control of the process.abd where the negotiator had to interact with people outside the firm, she lost total control of the process. Here the variance was greatest. With some clients, the process was resolved in a single round in a couple of days. With others, it could take months or even years.