Journey of Transformation

1. Journey of Transformation Liam Ward AMP Head of Operations HR

2. About AMP • Since 1849 AMP has been the leading independent wealth management company in Australia and New Zealand. • AMP operates four core businesses: Financial Advice, Superannuation, Banking, Investments, Life Insurance & Retirement Services. • AMP are helping more than five million customers in Australia and New Zealand own tomorrow. • AMP manage A$159 billion in assets for our customers. • AMP has around 945,000 shareholders. • 6,000 employees across Australia, New Zealand and Asia help service our financial planners, customers and shareholders.

3. Our Current World is Rapid Discontinuous Change ING slashes 7,000 jobs, CEO leaves January 26, 2010 Japan in crisis as jobs slashed February 1, 2009 Australian budget to go into deficit as financial crisis wipes $115bn from tax revenue AAP February 02, 2010 Korean exports shrink by one-third February 2, 2009 - 3:03PM Nikkei slumps on news of factory slowdown 日経は日本メーカーの売り上げ低迷のニュースにより深刻な状況へ January 30, 2009

4. The start of the Journey (Why?) • Due to the GFC there was a need to aggressively reduce our unit cost to be inline with ING Global targets. • There was little understanding of process frameworks and how they related to our performance. • During 2008 INGLJ Operations found the need to place a greater structure around the daily operations of its Contact Centre, Underwriting and Administration areas. • Improving productivity ,increasing the quality of service provided to customers while reducing the cost per transaction all became key measurements.

5. Creating the Transformer Program • A detailed 4 week audit of the Operations area in November 2008 was conducted to identify operational improvements. • Through this process it was identified that there was not a solid performance governance model. There were a number of challenges to this: • Only a small number of our processes were identified and mapped. • Process knowledge mainly stored in peoples heads. • There was no common process governance. • Inconsistent performance indicators. • Lack of visibility of day to day workload. • Quality of output not consistently assessed in all areas of Operations.

6. There were four main initiatives which formed the Transformer Program. The aim of the program was to make ING Life Japan a best practice Operations environment. The initiatives were; Streamline the complexities of processes. Implement a Management Operating Methodology. Introduce a Quality Assurance Program. Increase Employee Engagement. Transformer Program The key objective of the Transformer program was to: “To be recognized as having a best practice operational area within the ING Asia Pacific Region”

7. Goals of Process Improvement • Create a Business Process Framework for the Operations area based on best practice models. • Review all activities from a value-add perspective for our customers and apply Lean Principle to them. • Eliminate waste, over burdens & unevenness. • Visualise value streams, processes and daily workload. • Train & involve all employees to be Process Improvement key value creators. • Reduce headcount by 30% • Reduce overtime by 14%

8. Business Process Framework Matrix (BPFM) • The BPFM is an excel tool that holds all the operational specifics to a process. • This tool is used to provide full visibility in priority setting for process improvements.

9. Optimization Modeling Business Process Framework Life-Cycle Monitoring Execution Creating a BPF Life Cycle • Business Process Framework (BPF) is a management approach focused on aligning all aspects of an organisation with the wants and needs of clients and stakeholders. Design

10. Process Library • An intranet site was created on Share Point to provide the information to all Operations employees. • The contents within the site; • AS-IS process maps • TO-BE process maps • Training materials i.e. guides

11. One Touch & Lean Kaizen • Through the BPF process we identified three key objectives: • Reduce the unit cost of our transactions; • Reduce the number of touch points in our processes; and • Involve every employee in Operations to participate in the process improvement journey. • As a result we created two programs to run under the Process Improvement banner. The programs were to run concurrently while complementing each other in optimising our existing processes. • The programs; • One Touch • Lean Kaizen

12. Lean Kaizen Program Concept • Eliminate the waiting time and unnecessary interruption. • Focus on true customer value, eliminate excessive over-quality. • Take “pull principle”, change “push principle”, to eliminate over-processing. • Leveling workload imbalance and train the employees to be multi-skilled to work a broader range of processes. • Identify the wastes, leveraging bottom up approach, and collect Kaizen ideas from all employees to fix them. • Encourage all employees to be essential Lean drivers.

13. Lean Kaizen Program Organization Program sponsor :COO Project sponsor : Division Managers Facilitator: Business Transformation Team UW 1 UW 2 CS 1 CS2 CS3 CS4 CS5 CS6 CC1 CC2 CC3 OpB1 OpB2 Process Owner

14. Project Schedule

15. One Touch Transformation • In total there were 18 processes in Administration that had been chosen which covered 96% of the transaction volumes. • The selection of these processes were determined by volume and risk to the business. • All Administration Processes have been defined by either Major or Minor Processes. • The Definition: • Major – Any and all processes with a transaction volume higher than 100 annually or monies coming in/out of the business. • Minor - Any and all processes with a transaction volume less than 100 annually or no payment related activity.

16. Step 1 Step 2 Step 4 Step 3 One Optimization Transformation 1.Complete current Service Expectation’s (SE)& Process Maps 4. Communicate & Train on the New Processes One Touch 2. Complete New Maps & Time SE’s 3. Seek Approval & Signoff of One Touch Processes

17. 5S as essential wisdom to be implemented • 5S is an improvement process, originally summarisedby five words beginning with S, to create a workplace that will meet the criteria of visual control and lean.

18. Management Operating Methodology What is a Management Operating Methodology (MOM)? • The MOM is a framework within which employees do their work • It is a consistent, reliable and integrated system for planning, decision-making, executing and reporting on client activities

19. MOM Tools • A key to the success of the MOM is the ability to visualise the business. • There are four main tools; • Master Schedule – an excel based tool that incorporates forecasts, daily schedules and a monthly summary of resources. • Daily Reporting – a hybrid of our mainframe systems and Excel. The daily report displays the results for the previous day by each team. • Whiteboards – displaying team results and communications. • Huddles – daily meetings to discuss results and plan for the day. • These tools are critical to driving a focus to exceed our goals for our clients, employees and shareholders.

20. MOM in Action (Daily Huddle)

21. Quality Assurance (QA) The Quality Assurance Program consists of four major components.

22. Benchmark study of Life Insurance companies in Japan In a recent benchmarking survey conducted on the Japanese insurance industry ING Life Japan was number 1 in all key measurements of productivity, service and performance.

23. One Touch Results Through the introduction of One Touch there have been significant improvements in processing times across all processes.

24. Human Capital Improvement Since the introduction of the Transformer Program there have been strong productivity improvements which have lead to a redistribution of our human capital. The total cost of the Program so far has been equivalent to 4FTE.

25. Questions?