Process Design and Efficiency: Evidence from Retail Banking
Posted: 3 Jul 1998
Date Written: January 1996
This paper presents a methodology which determines the role of design in calculating the efficiency of service delivery processes. The efficiency of these processes is determined by using a variation of frontier estimation (DEA-like) techniques. The methodology is then applied to a particular service delivery process in retail banking. The methodology allows us to address the question of how much inefficiency in a business process is due to the wrong process design, and how much is due to the right design, poorly executed. Consistent with our expectations, the results show that no single process design dominates. However, for a particular institution, the methodology demonstrates the tradeoffs, and in fact offers specific recommendations, for either improving an existing process or radically changing to a different design.
JEL Classification: C13, G21
Suggested Citation: Suggested Citation