Ateneo Graduate School of Business

Master in Business Administration – Standard Program

Operation Management (S18)

ASSET MANAGEMENT GROUP

IMPROVEMENT ON SALES PROPOSAL PROCESS

Submitted to:

Prof. Apolinar Ng

Submitted by:

Alialy, Ruy
De Guzman, Gizelle
Madrona, Mary Ahn
So, Hanzelle Louise
I. INTRODUCTION

The Kaizen philosophy in the service organization follows a straightforward with a goal of
eliminating waste in a process. That is, eliminating the non-value adding activities while trying
to continue to find ways in improving its process in order to discover value adding opportunities
for an organization.

For the topic of this paper, we will be focusing on the current situation of the Asset
Management Group- Retail Sales which relies heavily on customer information in order to drive
successful sale with its foreclosed assets. In this regard, information flow is highly valuable for
the team but the existing information flow and approval process, has becoming more and more
problematic for the team (highly dependent on manual encoding with too many
checkers/approvers) and a source of complaints from customer (due to slow turnover of
property).

Our aim is be able to apply the kaizen philosophy of “continuous improvement” to BDO
AMG-Sales team’s existing sales proposal process to improve their current situation by making
the problematic areas visible and reduce non value adding activities and develop a more
standardized process to expose value adding activities to its existing process.

II. COMPANY PROFILE

BDO is a full-service universal bank in the Philippines. It provides a complete array of

industry-leading products and services including Lending (corporate and consumer), Deposit
taking, Foreign Exchange, Brokering, Trust and Investments, Credit Cards, Corporate Cash
Management, and Remittances in the Philippines. Through its local subsidiaries, the Bank
offers Leasing and Financing, Investment Banking, Private Banking, Rural Banking, Life
Insurance, Insurance Brokerage, and Stock Brokerage services.

BDO’s institutional strengths and value-added products and services hold the key to its
successful business relationships with customers. Its branches remain at the forefront of
 setting high standards as a sales- and service-oriented, customer-focused force. BDO has one
of the largest distribution networks, with more than 1,000 operating branches and over 3,000
ATMs nationwide.

Asset Management Group-Retail Sales is the unit responsible for the marketing and
selling of bank’s acquired properties. These properties are known in the banking industry as
Real and Other Properties Acquired (ROPA). It is composed of one (1) Head, fifteen (15) Sales
Officers (SOs) and two (2) administration staff. Sales Officers are grouped into three (3) teams.

There are three stages in the selling process, the first is the bidding stage, the second is
the approval stage from Unit Head/Group Head, and the third is the approval stage from the
Top Management.

III. STATEMENT OF THE PROBLEM

The average number of sales transactions per month for the entire retail sales unit is
twenty-five (25). In connection with its sales approval process, the turnaround time for any
client to receive a Notice of Approval (NOA) is eighteen (18) days. This very long process is
one of the complaints from the clients. Existing process flow using cross-functional process
map (see next page)
IV. OBJECTIVES

In order to address the delay, this paper aims to provide the process analysis to determine
the bottleneck and at the same time to make recommendations

V. ANALYSIS OF THE RELEVANT FACT

The relevant facts are anchored on: (1) Information gathering, (2) Preparation of Sales
Proposal, (3) Checkers and reviewers, and (4) Issuance of Notice of Approval (NOA).

1. Information gathering

In this regard, the Retail Sales unit has no access to the current Management
Information System (MIS) system being used by Asset Management Group (AMG) for
acquired properties in connection with the pertinent data/information. In view of this, Sales
Officers (SOs) have to resort to manual gathering, meaning have to get information from
other units which have access on the system.

Details Present Time

Process Responsible Unit Improvement Ideas*
of (Minutes)
Proposed

Information Gathering 3,360

Secure the price folder AMG-Pricing 0.17 Y

Secure the data/information on adjusted AMG-Operations/ Automate
book value/annual expenses/caretaker’s Records/ Expense Unit 480 Y
details and Property Admin
Secure the NFIS/BAP (credit checkings) Reassign
AMG-Documentation 2,880 Y
reports

This process entails sending e-mail to concerned units for which the response time
from the source units is about a day the earliest and five days the latest. Once the pertinent
data/information are on hand already, then the preparation of sales proposals begins.
2. Preparation of Sales Proposals

SOs have to incorporate manually the pertinent information/data gathered in word

document format. The computation for the financial analysis is being done manually as
well.

Details Present Time

Process Responsible Unit Improvement Ideas*
of (Minutes)
Proposed

Preparation of Sales Proposal 120

Preparation of Sales Proposal (including Automate
120 N
the attached forms)

This manner of preparing the proposals sometimes is susceptible to errors and

mistakes.

3. Checkers/approvers

Sales Proposals made are endorsed to different units for review on the
data/information, and at the same time for approval.
 Details Present Time
Process Responsible Unit
of (Minutes)
Proposed

Routing to Checkers/Approvers 1,705

AMG-Operations/
Review of data on book value Records/ Expense Unit 5
and Property Admin
Review of sale proposal by Property
AMG-Property Admin 60
Admin Head
For approval of Sales Unit Head AMG – Sales 20

Review of sale proposal by Remedial Remedial 960

For approval of AMG/Remedial Group
AMG/Remedial Group 480
Head
Executive Committee
For final approval of Top Management 180
(ExCom)

In this aspect, it is very important to point out here the availability of Unit Head, the
office location of Remedial Group and the schedule of presentation to Top Management.
Unit Head comes to work thrice a week only, hence sales proposals can be endorsed to
her in three-day period only. The office of Remedial Group is located in the adjacent
building, and the time consumption of any messenger to bring the proposals to her is about
5 to 10 minutes. The schedule of presentation to Top Management is every Friday only.

4. Issuance of Notice of Approval (NOA)

The issuance of this document to clients is facilitated by Documentation unit.

However, SOs and Unit Head need to have initials on it.
 Details Present Time
Process Responsible Unit
of (Minutes)
Proposed

Issuance of Notice of Approval (NOA) 3,360

Preparation of NOA AMG-Documentation 2,400

For checking of NOA AMG-Documentation 480

For initial of Sales Unit Officer/ Head AMG – Sales 480

Documentation Unit has no access as well to the MIS system of AMG, thus its way
of preparation of NOA is quite tedious because it has to go over all the pertinent
data/information again. Likewise, the preparation of it will start only once the approved
sales proposal folder is delivered to the documentation officers. The delivery usually takes
about 3 to 5 days.

SUMMARY OF TASKS

Total Duration Minutes 8,545

Hours 142
Days (8 working hours) 18

It shows indeed that the bottleneck confines to: 1> the task for the information
gathering, and 2> the task for the issuance of Notice of Approval (NOA).

VI. SOLUTIONS AND JUSTIFICATIONS

Firstly, on the MIS system being used by AMG. Access must be given to both Retail Sales
and Documentation units. This system has to be enhanced as well. This includes
incorporation of templates for the Sales Proposal and Notice of Approval. Access must be
given as well to Retail Sales and Documentation units.
 The access to be given is a feasible solution because SOs will no longer request
data/information from the source units (the ones tasked to encode them in the system). When
it comes to templates, once they are incorporated in the system, then only few fields are left to
be filled up and these are the name of buyer, the offered amount, the referrer and the
justifications of the proposal. Manual computation for the financial analysis will be eliminated
likewise since templates have fields for the computation.

Secondly, other tasks must be eliminated already since they are considered as redundant.
These include the review being made by Remedial and the requirement of initials of SOs on
the Notice of Approval (NOA)

The review by Remedial officer prior to the endorsement to Remedial Group Head for
approval is redundant because this task is being done by AMG Property Admin Head already.
For the initials of SOs and Unit Head on the NOA, since the sales proposals have been
prepared by SOs and approved by Unit Head, then this requirement of initials must be
eliminated already because it does not serve any purpose or bearing. This is in consideration
of the fact that SOs most of the time are not in the office and the Unit Head being in office for
thrice a week only.

To illustrate this, here is the proposed process.

 Details Present Time
Process Responsible Unit Improvement Ideas*
of (Minutes)
Proposed

Information Gathering 1,440

Secure the price folder AMG-Pricing 0.17 Y

Secure the data/information on adjusted AMG-Operations/ Automate
book value/annual expenses/caretaker’s Records/ Expense Unit 0 Y
details and Property Admin
Secure the NFIS/BAP (credit checkings) Reassign
AMG-Documentation 1,440 Y
reports
Preparation of Sales Proposal 30
Preparation of Sales Proposal (including Automate
30 N
the attached forms)
Routing to Checkers/Approvers 740

AMG-Operations/ Eliminate
Review of data on book value Records/ Expense Unit 0 N
and Property Admin
Review of sale proposal by Property
AMG-Property Admin 60 N
Admin Head
For approval of Sales Unit Head AMG – Sales 20 N
Eliminate
Review of sale proposal by Remedial Remedial 0 N
For approval of AMG/Remedial Group
AMG/Remedial Group 480 N
Head
Executive Committee Simplify
For final approval of Top Management 180 N
(ExCom)
Issuance of Notice of Approval (NOA) 495
Automate
Preparation of NOA AMG-Documentation 480 Y

For checking of NOA AMG-Documentation 15 Y

Eliminate
For initial of Sales Unit Officer/ Head AMG – Sales 0 Y

Variance Analysis summary

SUMMARY Analysis
Tasks Present process Proposed process Variance %

Information gathering 3,360 1,440 1,920 57.14%

Preparation of Sales Proposal 120 30 90 75.00%
(including the attached forms)
Routing to Checkers/Approvers 1,705 740 965 56.60%
Issuance of Notice of Approval 3,360 495 2,865 85.27%
(NOA)
minutes 8,545 2,705 5,840 68.34%
hours 142 45
days ( 8 working hours) 18 6
 The summary shows that with the enhancement of MIS system, access to the system is
given to both Retail and Documentation units, and elimination of other tasks, the underlying
benefits are the following.

1. Significant reduction on the processing time by 68.34%. From 18 days to 6 days.

2. Manual intervention will be minimized. Hence, the encoding of data and errors in
computations will be reduced.
3. The number of reviews to be made on the encoded data/information in the sales proposals
and in the Notice of Approval will be reduced.

VII. RECOMMENDATIONS

Our group is recommending the following:

1. The enhancement of the current MIS system in order to incorporate templates for the sales
proposals and Notice of Approval.
2. Access is given to Retail Sales and Documentation unit.
3. Elimination of tasks that are considered redundant and of no purpose or bearing.

VIII. REFERENCE

BDO-Unibank-2016-Annual-Report-Financial-Supplements.pdf, BDO Philippines 2016