TQM Application in Financial Services

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TQM Application in Financial Services
CEM 515

• By
• Ali Al Mansour
• January 6, 2007

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Outline

• Introduction
• Service vs. Manufacturing
• Key Financial Services
• Elements to Successful TQM Implementation in
  Financial Services
• Benefits from TQM Implementation
• Barriers to Implementing TQM

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Introduction

• Born in early 1980, Japanese Manufacturing
  Companies
• Defined a quest for excellence, creating the
  right attitudes and controls to make prevention
  of defects/errors possible and optimize customer
  satisfaction by increased efficiency and
  effectiveness.
• Studies support TQM applicability in the service
  industry
• Applicability in the financial institutions.

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Service vs. Manufacturing

• Intangibility
• Difficult to measure and standardize
• Delivery and consumption happen simultaneously
• Customers sensitivity to quality.

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Service vs. Manufacturing Literature Review

• Beamount et al (1997) found that service firms
  use fewer quality management tools.
• Woon (2000) found lower level of TQM
  implementation
• Hug and Stolen (1998) found that service
  companies apply TQM selectively as opposed to
  manufacturing.

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Literature Review contd

• Study conducted by Daniel Prajogo, Monash
  University, Australia. 194 managers in service
  and manufacturing companies

Manufacturing
(n102) Service (n92) Variables
Mean SD
Mean SD Mean
difference Leadership
3.69 0.76 3.82
0.89 -0.13 Strategic
planning 3.55 0.88
3.59 0.93
-0.04 Customer focus
3.87 0.72
3.97 0.65
-0.10 Information and analysis 3.55
0.84 3.53
0.92 -0.02 People management
3.31 0.79
3.57 0.80
-0.26 Process management 3.63
0.71 3.56
0.70 0.07 Product quality
4.22 0.51
4.17 0.59
0.05
Note Significant at p lt 0.05
Source Daniel I. Prajogo, International
Journal of Service Industry Management
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Key Financial Services

• Processing time of key products e.g. loans, new
  accounts, ATM cards, credit cards, cheque
  encashment
• Waiting time in a queue, downtime
• Handling customer complaints
• Staff friendliness and efficiency
• Diversity of products
• Hidden charges reasonability
• Accuracy and timeliness of statements and
  accounts records
• Promptness in answering customers inquires
  through phone, email, etc.
• Online system availability
• Diversity of investment products e.g. mutual
  funds, thrift plans, trusts, mortgages, etc.

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Elements for Successful TQM Implementation in
Financial Services (Soft Aspects)

• Customer focus- needs, loyalty
• Professional skills through well designed
  training programs.
• New technology
• Process Innovation
• Top management commitment
• Communication
• Empowerment
• Attitudes and behaviors

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Benefits from TQM to Financial Organizations

• Quality awareness in the organization
• Higher quality services products
• Skillful employees
• Satisfied employees-gt satisfied customers
• Cost effectiveness
• Profitability

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Barriers to Successful TQM Implementation In
Financial Services

• Subjectivity
• External uncertainty
• Intangibility of products
• Lack of recourses
• Short term goals
• Lack of training
• Lack of communication

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Questions?Thanks!