Of course with a ‘built' solution there is complete accountability, although there are those that would hold that to be a two-edged sword. The difficulty, as the reader may by now be realising, is that accountability is usually determined with regard to very few benchmarks - delivery on time, to budget and to specification. In most large financial firms, politics plays an important role and we should not underestimate the political pressure on projects to be ‘under-defined' in order to give leeway for cost overruns and such like. I was commissioned by a pensions provider in the retail space to review a new deployment for its usefulness in the market. The pension company operated using a diverse sales force, arranged in branches with the sales force segregated by level based on their income producing performance. Not an uncommon model. At the top level were sales people capable of earning over £250,000 a year in commission income alone. As is also common, the company concerned wanted to try to both streamline the sales process and reduce costs at the same time. The problem at the time was that the sale could only be confirmed using the client's signature on the pension application form and the sales methodology was based on a fairly long cycle time to sale with assessments of risk and several meetings between first meeting and closing the business.
The firm was finding an unacceptably high level of NPW. Overall, management therefore had little real control over the sales process and more importantly could not help management to improve productivity. Their response to these market conditions was to provide their sales force with a new laptop-based computer application designed to make the process of selling pensions more efficient. Pension sales in the retail sector are typically based on fear, so the usual model is to provide several ‘illustrations' based on a client's perceived priorities, to create a raft of products, among which is almost certain to be a pension, which ultimately meets the financial needs of the client. The illustrations must conform to a model of risk provided by the Financial Services Authority (FSA) in terms of expected growth in asset or fund value. The net result was an application suite, to be used by a range of salespeople to speed up the process. As I analysed the application, it was clear that, in theory, this application would be revolutionary. In order to make the senior management's information more clear and supposedly to help the salesperson manage multiple contemporaneous sales, the application had the ability to note any and all sales activity by either the client or the salesperson. The application had communications technology so that inbound and outbound business-related calls were routed via the laptop. So, once a client's details were entered, an inbound call could be related to a client and the length of the call automatically monitored. The salesperson would then have to allocate the call to a type of activity.
Conversely, all calls made by a salesperson would be recorded as to time and duration so that the salesperson could later allocate the call to an activity. Finally, once a month all these data would be uploaded centrally to be analysed by management with a view to improving performance. As far as selling was concerned, if the client wanted to sign up, the data collected could be used to populate the relevant form at head office and subsequently sent to the client for signature. At the time of sale, using a portable mini printer, the salesperson could get a commitment by having the client sign a print out that confirmed that they wanted to proceed. My observation was that there were several things wrong with this implementation, which hopefully the reader has already spotted. First, the psychology of this deployment is completely wrong. While a successful implementation would undoubtedly deliver excellent results, it was never going to be a successful implementation because it doesn't reflect the psychology of sales. I later fund out that the IT department had designed this application without consultation with any sales person. It showed.
A good sales person has only one interest - selling. Anything, including administrative work, that detracts from time spent with a client won't work because there's an inbuilt antipathy towards it. Second, having the system effectively do a time and motion study on the salesperson was counterproductive. The designers had designed the system to a level of granularity that would not be supported in practice, nor had they considered the cost involved in having senior managers analysing the mountain of data that would be delivered as a result. They had also not considered that sales people would be highly unlikely to use the level of consistency in data entry (e.g., all calls in and out must be logged) necessary to make the mountain of data valid at the analysis stage. The clients in all this also had a problem. No-one had asked them what they thought of automating this process. The vast majority of people in the United Kingdom do not have a pension, but the majority of those who start looking for one, do so in middle age. It is rare for the young to plan ahead that far. At this age, most are married with the male as the main financial decision maker. So, the constituency of potential clients have an age and gender profile that mitigates against this technology. The generation after them would think nothing of buying a pension completely on-line with no human intervention at all. The generation before them would be highly untrusting of a sales process that included any technology. The generation concerned however, did not fit nicely into the gap. Because the regulatory structures required (and still do) a hard signature, all the technology benefits grind to a halt as separate processes have to be built to parallel a technology process with the manual one required in law. It is also true that the market perception of financial sales was not enhanced by this technology because it devalued the personal relationship between client and salesman and devalued the product. If it is just a case of crunching numbers, anybody can do that and clients are quick to realise this.
Attempts to build in a sort of pseudo-skill by having a ‘risk analysis' questionnaire which defines the allocation of assets for a given portfoloio simply did not work in psychological terms. So, all in all, the company spent £2 million developing a solution without reference to its user base, client base and the broader aspects of market morphology. The lesson is twofold. First, in a build project, the greatest danger lies in presuming that because you work in the industry means you know how the industry works. The second danger is that you fail to create an independent review body which can slow or stop activities that may be logical, but which don't add value (at best) and actively detract from value.
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