DoL Self-Assessment Part 2: The Gap Between Your Current and Future States

In our last posting, you assessed the degree to which you understand how you currently sell your products and what interdependencies exist between the new business process and internal technology, processes, and information. If not, refer to DoL Self-Assessment, Part 1 which focused on the foundational importance of knowing the variations and details of your processes and supporting actors, technologies and information to ease implementation of new requirements. Once you have this information, it is time to assess your organization on “Need to Know” area #2.

Let’s continue your self-assessment with Need to Know #2.

“Need to Know” #2 – How will your internal processes change, and what resources are needed to support them?
Once you have a good understanding of how you and your distribution partners sell today, you must isolate the areas that need to change internally to support new functions or are unnecessary moving forward. Your processes, internal data, and supporting technologies must align with future requirements to streamline the current selling styles of your advisers. Identify what your new process will look like, and note new actions, actors, or organizational inputs. This will highlight the differences between current and future state, and determine what parts of your process must be redesigned.
As you begin to evaluate your internal processes and redesign a new process, answer the following questions. Give yourself 2 points if you can answer “yes,” 1 point if you can answer “no” or 0 points if you answer “I don’t know” for each letter. Keep track of your total to find out your Redesign-Ready Score at the end of the assessment.

1. Do you know the new requirements that are not supported by your process?
You will likely have new steps to add, new data to review, and new skills required in the internal process. For example, your new business teams may need to discover whether there is already a Best Interest Contract in place. Each external process will have corresponding steps to create a seamless workflow.

2. Do you know how to change your process to adapt to these areas?
Document the future state but be careful not to over document. It is easy to spend too much time documenting internal processes that are simply going to be replaced. You want to balance the time spent analyzing existing processes with the time spent creating and documenting the ideal processes.

3. Do you have the right skills and staff in place to support new and significant complexity in your new business process?
If you previously had a single new business process for all your products and distribution partners, this is not the case anymore. You will have different processes depending on whether the new business is qualified or non-qualified. You might also have different processes depending on which distribution channel is sending the business to customers. Keep track of needed resources that are currently unavailable, or that may have large organizational impacts on the business.

4. Are you prepared to make required compliance checks within new business?
The new business process will have additional checks that need to take place, particularly if the BICE is being used. Many changes will need to occur, for example. Service teams will need to make sure that the Transaction Disclosure was presented, and that it is consistent with what was sold to the client. You will need to have the compliance checks documented and built into the training and technology for the new business staff.

5. Do you have right systems to support your processes?
Don’t neglect the opportunity to automate many of these steps. If you have a workflow system, expect to have many more routing rules and new process trees. Also, make sure that if decisions need to be made along the way that you either automate these or provide the relevant data for your service teams to make the appropriate decisions.

Look at the answers you have and tally your total.

Ready for Redesign = 8-10. Scoring within this range means you are aware of the resources and capabilities your organization will need in the future to implement requirements successfully. Moreover, some of these resources and capabilities exist within your process today. If there are any remaining gaps in the current state process, document them now. Then, move forward with prioritization and execution of required redesign or technology enhancements.

On the Road to Redesign = 3 to 7. You have knowledge of some elements needed to implement new requirements, however, still lack an understanding of the nuances that exist within advisers, selling styles and process steps. Failing to account for these details will result in a future process that is neither effective enough nor considers all organizational needs. Highlight the above questions you answered “no” or “I don’t know” too and identify what specifics you still need to answer to satisfy internal strategies. Fill in the gaps and move forward to process redesign.

Redesign Rookie = 2 or under. Scoring within this range means you currently have a weak understanding of the complexities your organization will face implementing DoL requirements. Further, you are unaware of how well your current business processes align with these complexities or how they can be incorporated. Identify all capabilities your future process must have and use them to conduct a gap analysis of your current state and desired future state.

Redesigning processes early will allow you to adapt quicker and sooner than competitors. It is not too late to begin reviewing how your current state must change for the future. At NEOS, we know that a comprehensive understanding of process gaps and needed capabilities will streamline organizational redesign, decision making and implementation. Read more about assessing your current state in our whitepaper, “Right Sizing Your Current State Assessment.

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