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Recovering Lost Revenue
Making Good Money from Bad Process
EXECUTIVE SUMMARY
Revenue Mining
Progress through cost controls has defined the financial services sector for well over a
decade. In an austere climate of uncertainty, reducing underlying costs has been the
knee-jerk reaction to maintain a healthy bottom-line.
But step back and take a look at the bigger picture; cost savings are not the only game
in town. Take a more proactive approach. Generating new revenue and recovering
lost income is infinitely preferable to once again reactively trying to get even fewer
resources.
Enterprise Exponent

Money and valuable resources are lost or wasted through process inefficiency. Across
a modern enterprise, the amounts lost grow exponentially. This paper discusses
strategies and mechanisms by which revenue can be generated through a wholesale
evaluation and refining of processes across the global business.
Demanding that an already over-stretched internal resource pool suddenly increases
the efficiency of its operations in order to recover lost revenue comes with no
guaranteed success. In this respect, man organizations are turning
to external independent third parties to take on this role. Often, this
is conducted under a shared revenue model with the outsourced
partner taking a percentage of recovered revenue no win no fee.
Checking Behind the Sofa
Recovery of lost revenue can take many guises. From ensuring
that invoices are correct and are paid o time to renegotiating 3rd
party services. From auditing and recovering payment processing to
consolidating company-wide payments centrally. There is lost money
hidden deep within current operations where no one has looked.
Data Domain Delivery
TABLE OF CONTENTS
Executive Summary ............................1
Falling Through the Cracks ................2
Show Me the Money ..........................4
Staying on the Front Foot .................. 5
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FALLING THROUGH THE CRACKS
Cut, Cut and Cut Again
The prevailing mantra across all business sectors for the last two decades has been that of reducing costs. Efficiency is a by-product
of a streamlines operation and profits rise as the outlays reduce it is simple mathematics. The received wisdom is that by cutting
overheads in a tightly controlled fiscal environment maximizes customer returns and retention. On the bang-for-your-buck scale, cost
cutting produces the cheapest explosive blast.
On past evidence, cost cutting presents a strong argument. Assuming production levels and prices remain stable, with a lower
cost foundation the revenue and profits will necessarily rise. The recent recession has only poured oil onto the fire. In a climate of
uncertainty and austerity, who could argue against a strategy of stringent cost cutting? The result is too often the wholesale slashing
of any perceived ancillary tasks that may be surplus to strategic requirements along with the staff and support systems that go with
them. Many business analysts have made fine careers offering sage advice on how and where to make the necessary incisions.
Cost Myopia
But is the focus on cost reduction somewhat short-sighted? The diverse goals of financial institutions
operational efficiency, corporate revenue, customer satisfaction and global expansion are not
necessarily directly correlated to a lower cost base. Taking an excessively myopic view by focusing
exclusively on costs leaves other potentially more productive avenues unexplored.
Money is lost or buried deep within the processes. For years the operational focus has been keeping up
with product complexity in an expanding market that is still suffering the aftereffects of the 2008 crisis
and subsequent regulation.
All too often, concentrating on cost cutting comes from a reactive strategy, the need to make more with
less. But a more proactive philosophy acknowledges the need to promote efficiency, maximize revenue
and accelerate growth, but sees revenue generation and optimization as the way ahead.
Panning for Gold
Undiscovered seams of potential revenue are everywhere. The question is more about willingness and ability to find and resolve
them. The routine internal processes adhered to by financial institutions have been incrementally adapted over the decades. The
constant evolution is testament to the fact that these processes are never perfect or 100% watertight. The global marketplace is in
a constant state of flux with changing customer demands and regulatory mandates. Corporate strategy also drives the underlying
information flows, further adding to the potential for process inefficiency in the interest of meting short-term goals. We are left with
an environment that is rich in potential for improvement.
Todays dynamic market complicates an organizations ability to uncover lost revenue. This is further confounded by the need to
maintain diligence to ensure inefficiencies do not get rolled-into future process evolution. An initial sweep will inevitably reveal many
low hanging revenue opportunities. However, on-going attentiveness is needed to make process excellence part of business-as-
usual. Outsourced vendors are ideally placed to scratch the revenue-recovery itch, and often can take the relationship a step further
as financial institution turn to 3rd parties to generate revenue i the form of an extended customer list and running additional revenue
generating services that would be impossible internally.
The move to increased efficiency demands maximizing all chances of revenue. It is time to focus on new revenue generation and
cost optimization across the enterprise.
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The Paradigm Gear Shift
In the rush to promote fast growth and throughput, current processes are geared up to maximize processing speed for the minimal
cost outlay. But maximizing efficiency is not necessarily the same thing as promoting growth and processing speed. Costly shortcuts
are inevitable in the pursuit of processing more transactions with fewer resources.
Uncovering the multitude of inefficient process steps across a wide array of disciplines and business units
is daunting and requires a radical shift in mind-set. Analysts are no longer focused on cost saving, but cost
wastage. Where is money being lost? Where could revenue be generated? Where can established costs
be trimmed? Where can losses be minimized?
Increasingly, major institutions are refocusing on uncovering hidden revenue potential locked into their
business processes as a way to make money. In an environment where costs have already been stripped
to the bone, making the subtle shift to refining established processes with a view to generating more
revenue offers great potential for both easy quick wins and long term sustainability. Those that ignore the
overlooked revenue across the enterprise risk losing a significant competitive edge.
An Objective Viewpoint
The potential for revenue generation from inefficient process flows and steps, across all lines of business and geographical regions,
is huge. But the prospect of conducting such a widespread review and analysis is as daunting as the potential rewards are rich.
Uncovering bad process steps and inefficient information flows is tine consuming with no guarantee of success and with little tangible
benefit to those resources that take part in the process. Couple that with the fact that the available workforce is already at full stretch
given a prevailing climate of cost reduction, and we see a situation where most institutions are impotent to act.
Maintaining uninterrupted services is obviously a top priority. So if business-as-usual is to continue unaffected, many institutions
are looking to external outsourcing specialists to either assist or take on a primary role in revenue discovery. As specialists in
process workflows for multiple organizations, domain experts are best placed to objectively review processes and information flows
to uncover inefficiencies. Operating in a global environment for a diverse customer base positions specialist outsource service
providers as the ideal partner to find lost revenue.
Enterprise Perspective
Uncovering costly process inefficiencies demands a multi-pronged attack. The potentially rich seams of
revenue that are hidden under the covers inevitably come in several forms. Some are simply trimming
the fat from unnecessary steps or duplicated processes, but the scope must look wider to include
multiple departments and relationships. Professional outsource providers are ideally places to ask the
right questions of internal process owners as well as external information providers. And given the cross-
departmental nature of most business processes, and independent expert can take a more holistic view
based on international best practices.
No Win, No Fee
When re-evaluating business process efficiency; the returns are largely unknown. There are no tangible
guarantees that the revenue generated will cover the cost and inconvenience for the effort. However, many outsource providers who
are accustomed to such initiatives confidently offer their services on a percentage model; in place of a conventional fee, the partner
will take a percentage of the new revenue that is generated. This bullish confidence has been effective in convincing many institutions
to look a little closer for lost revenue. Aligning the analysts with the institutions revenue goals and interests removes the risk that may
have blocked progress in the past.
Contact eClerx:
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SHOW ME THE MONEY
Even the most progressive financial institutions will admit that
they operate in a volatile environment governed by procedural
flows and regulations that are far from perfect. Perfection is a
destination we may all aim for, but equally we realize that, by
definition, we can never actually arrive. There is always ample
room for improvement.
Given the diverse stakeholders involved in daily operations,
each with their own departmental concerns and focus, the
scope for improvement is as big as the capacity to recover
wasted revenue. From mundane bureaucratic loopholes to a
thorough re-evaluation of 3rd party relationships, the range
is wide and deep. Often it is just a matter of developing
an enterprise-wide mentality rather than thinking from a
departmental perspective. Some example areas where
significant results can be gained are detailed below.
Getting What You Pay For
There is money to be made from simply collecting invoice
revenue on time. A late payment means a lost opportunity
for interest and reinvestment income. Given the potentially
large sums involved, a few days
with reduce capital can have a
significant effect when extrapolated
across a global institution. Similarly,
paying bills on time is demanded,
but paying early loses money.
Financial institutions receive large
numbers on invoices from 3rd
parties for services rendered. It is
virtually impossible to review every
invoice to guarantee every detail
is correct. Do the invoiced services
and receipts match the contract details? Are the rates charged
in line with the rate card? Do the receipts match the invoices?
Line managers could spend multiple days per week validating
and approving all invoices, but reality prohibits this. Typically,
institutions will check a small (random) sample of invoices in
the hope of catching at least some of the errors.
The one thing worse than paying your bills would be paying
your bill twice. Even assuming such errors are found, capital
adequacy has been affected and the reimbursement process is
costly wasteful on many levels. Duplicate payments occur for
many reasons: multiple inconsistent vendor records, multiple
invoices wit different details, invoices processed through more
than one payables team, missed or overlooked rebates and
discounts, or basic foreign exchange mistakes. Without an
enterprise-wide perspective for invoicing, duplicate payments
are inevitable. Typically, departments maintain their own
relations with 3rd parties and therefore invoice separately.
Suppliers may be less rigorous in their controls, but is not
their duty to manage their customers finances, so more care
is needed. Evaluating historical logs of payment practices, as
well as centralizing payment service does much to close the
loopholes. It demands an ongoing process of audit and timely
recovery of revenue.
Revenue recovery for duplicate payments is typically quoted at
around 0.1%. This results in potentially recouping around 1m
annually based on an annual expenditure of around 1b.
From Silos to Pooling
Modern financial institutions, especially those operating
internationally, can often operate as multiple single entities that
conduct their daily business in isolation. Different departments
or geographical operations may take identical data feeds
from 3rd parties, or maintain their own payment and trading
operations.
Pooling similar services, irrespective of internal or regional
divisions, results in bigger collective muscle in contract
negotiations and removes paying twice for the same
thing. Similarly, numerous departmental payments can be
amalgamated into a smaller number of larger payments.
Reducing the net number of wire transfers saves costs and
SWIFT transaction fees.
Reviewing the time of day that payments are made can make
a big difference to costs. Paying later in the day, or splitting
urgent real-time urgency from overnight batch transfers
optimizes the operations to reflect business revenue needs.
Netting settlement payments across the organizations offers
similar savings and promotes process efficiency. The key is
to move away from business departmental silos and view the
entire enterprise as a homogeneous whole. By paying at the
optimal time reduces lending needs and reflects a truer picture
of capital adequacy obligations as well as having a positive
impact on the cash standing in corporate bank accounts.
3rd Party Renegotiation
External vendors often provide ancillary services as well as
mission critical facilities to major financial institutions. Such
partnerships typically grow and develop in a haphazard
manner, often filling a niche or urgent requirement, with little
or no central control. Are the full implications of all 3rd party
contracts fully understood? The relationships and service levels
institutions have signed up for may be out of date and not
applicable to a modern environment. There may be new
providers of content that offer more advantageous terms for a
lower rpice. An urgent review of data sources, content providers
and analyst research support will reveal multiple loopholes
where revenue is lost for ineffective services. Taking a more
complete view of the corporate needs and renegotiating from
a stronger position adds weight to the discussion.
The IT systems and software package utilized at banks are
again often diversified across the organization. Hardware
and software licenses are duplicated across regions and
departments. By amalgamating all corporate requirements a
firm has a stronger negotiating position from which to extract
more advantageous terms. The IT sector is the most dynamic of
all industries; hardware and software evolve at alarming rates.
Relying on historical agreements is costly as service levels and
expectations change fast. Compare and contrast to ensure a
better and cheaper service for the whole enterprise.
Contact eClerx:
Americas EMEA APAC
+1-212-551-4150 +44-0-207-529-6000 +65-0-6225-2988
Learn more at www.eclerx.com/fs
@eClerxFS
bdteam@eclerx.com
STAYING ON THE FRONT FOOT
All business sectors evolve and keeping pace is a full-time job. The insatiable rate of change is partly to blame for the fact that many
modern financial institutions are operating processes that are costly and wasteful of resources, and often do not address many urgent
concerns. New ways of trading are always emerging and new trade types must be supported. New channels are developed allowing
customers to interact a new and more dynamic levels. But, supporting these developments costs money and demands expertise.
Customer expectations grow alongside and institutions that fail to keep pace may find the competition too much.
Uncovering lost revenue in poorly maintained or outdated processes is not a one-time fix. Of course there will be low hanging fruit
that can get a quick fix to deliver significant savings, but that is just the tip of the potential revenue generation. To keep pace and
maintain absolute diligence on the entire process lifecycles across multiple lines of business demands dedicated specialists, either
internal or external.
Outsourcing Assistance
Once the initial cleanup has occurred it is essential that there is no return to the old ways. Many institutions
are now looking to outsource services providers to take on some or all of the process optimization. Tasks
such as invoice checking, rate card evaluation, invoice chasing, etc. may be easily outsourced. With a
3rd party as part of the business-as-usual processes, the review and analysis applied can increase.
The outsourcer can review actions on a trade-by-trade basis for a price that would be unfeasible from
the corporate head-office. As market specialists, the outsourcer can provide extensive summaries and
management information reports on incomings vs. outgoings. Workflow tools orchestrate the process
flows and ensure adaptability to future unknowns.
Going One Step Further
Many progressive financial institutions are going further by engaging the outsource partner as a customer lead-generator. So rather
than being limited to chasing customer invoice payments and trade conformity, the outsourcer is also responsible for filling up the
banks sales pipe. With affordable resources developing prospects for the banks sales team to contact, internal costs are kept low
and valuable in-house resources are used with precision.
With physical contact with customers at a premium, many organizations face the very real danger of
becoming disintermediated from their customers due to a lack of web presence. Outsourcers again can
provide a valuable and skilled resource pool for website content creation and audit, as well as setting up
programs to monitor social media networks to ensure a high quality customer experience.
On another tract, outsource service providers can add muscle to business areas that may be neglected
due to manpower shortages. Client reporting may be seen as a key differentiator, but potentially too
expensive to maintain consistently. The data analysis needed is a specialist task and it may not be a feasible
proposition to launch such a service. An outsource partner can bridge that gap providing the fundamental
mechanisms and processes to offer consistent high-end reporting to broad customer base.
Partnering with an outsource services provider enables financial institutions to uncover and recover substantial revenue through
closing loopholes and cracks in processes that drain resources. But outsourcers can go a step further and allow the provision of
services that would not have been viable otherwise.
Contact eClerx:
Americas EMEA APAC
+1-212-551-4150 +44-0-207-529-6000 +65-0-6225-2988
Learn more at www.eclerx.com/fs
@eClerxFS
bdteam@eclerx.com
Reasons to be Cheerful
With costs spiraling, diversified institutions are increasingly looking at their underlying internal process inefficiencies as a route to
making significant savings. Poor or badly designed and implemented business processes have a tendency to bite you twice; first with
increased unnecessary resource usage, and second, by obfuscating the true costs and even concealing wasted and unnecessary
expenditure. Recovering list or overlooked revenue can provide a rich seam of saving without the need to directly cut costs or
reduce resources or assets. By re-examing established processes, reviewing vendor invoice payment procedures and renegotiating
contractual obligations, an organization can recoup significant savings and generate new revenue.
But given the pressures to maintain the current levels of service with an already overstretched resource pool, many institutions are
unable to devote the time and energy needed to uncover lost revenue. An outsource vendor can provide the much needed expertise
and manpower to drive a campaign of reevaluation, reassessment and renovation. With projected revenue savings ranging from
1m to 5m annually, depending on expenditure, cost optimization and new revenue generation are the cornerstones of a modern
efficient operation with long-term benefits.
About eClerx
eClerx provides critical business operations services to more than 30+ global Fortune 500 clients, including many of the worlds
leading financial services firms, online retail and distributors, interactive media and entertainment, high tech and industrial
manufacturing, travel and leisure, and software vendors, through operational support, data management and analytics solutions.
Incorporated in 2000, eClerx is Indias first and only publicly listed knowledge processing (KPO) company and is today traded on
both the Bombay and National Stock Exchanges of India. eClerx was ranked as one of Forbes Asias 200 Best Under a Billion
List and named as finalist in Teleos Most Admired Knowledge Enterprise award. eClerx employs over 6,000 employees across
its six Indian delivery centers and offices in Mumbai, Pune and Chandigarh plus global client relationship locations in New York,
Philadelphia, London, Silicon Valley, Austin, Dublin and Singapore.
For more information, visit www.eclerx.com.
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