Operational Strategies and Challenges of Bank Windhoek

To analyse the operational strategies, risks, and challenges that Bank Windhoek faced, this report uses the operations performance objectives in relation to its pursuit for delivering quality customer experience and innovative portfolio of financial services. In its way towards becoming a process-focused company, this paper analysed the bank through the different components of the supply network design.

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This report concludes with a warning for the company about the risks of transitioning into a process-focused organisation in the banking industry. Without the careful management of risks and the challenges that come along running a financial company, strong leadership and a vision, the ideal company aspired for would be difficult to reach. There are, in addition, some dimensions that this report did not touch, including security and the integration of the companys plans into the whole business system.

In light of the organisational gaps that need to be addressed, particularly security, the company highlighted the importance of evaluating flow through the network to determine what steps must be taken when considering various operations-based strategies, relocating, and capacity-building efforts.

Operations and Process Management: Bank Windhoek (Namibia)

Introduction

Bank Windhoek is facing its toughest decade amid rising competition, shortage of skilled staff, transforming into an innovative and process-led company, and ensuring better customer experience. As well as other bigger challenges, the only Namibian-owned bank must remain as a stable, efficient and risk-free provider of financial services to its clients. It is also faced with the pressure of satisfying its customers needs in a fast and dependable manner while helping its suppliers and partners improve the services they offer.

The bank was chosen because of its complex yet complicated network of financial services business on top of the holding groups other businesses that would allow for an investigation of its process improvement philosophy. The key strategic decisions that often influence the design of this supply network will be examines in as much as the role of the operations sub-components.

The operational issues of the bank will be analysed in this report using relevant operations and process management concepts, such as the five basic performance objectives. The remainder of this report deals with some potential steps that Bank Windhoek might consider pursuing to perform better and remain efficient in the financial industry through the configuration of its supply network design. Finally, the last portion of this report presents the conclusions .

Operational Background

Founded in 1982, Bank Windhoek is the flagship brand of Capricorn Investment Holdings (CIH) Limited that captures 30 percent of the Namibian banking sector. As well as the sole locally-owned bank in Namibia, Bank Winhoek is the recognised leader in their countrys financial services market. It also prides its wide spectrum of banking products and services portfolio (Capricorn Investment Holdings, 2015).

The banks core philosophy is grounded on reaching a controlled responsible growth. The Bank Windhoek also reinvests its profits while remaining relentless in exploring new possibilities and employing innovative strategies to better serve its constituents. Its relentless investment in technology was aimed at providing faster and better services, more choices, as well as improved convenience and functionalities to their customers (Le Roux, 2014).

The higher-than-ever expectations for banks to perform better in the Namibian market have set the bar higher for Bank Windhoek to meet the growing needs of its customers. On the macro-level, the bank is expected to play a meaningful role in its countrys economic development, as well as in helping strengthen grassroots communities. Bank Windhoeks commitment to Namibia and its people are manifested in its Together we do better brand slogan (Capricorn Investment Holdings 2015).

According to AllAfrica.com, Bank Windhoeks total asset grew 17.6 percent as of last 2015, propelled by the growth in loans. Its bank advances of 16.7 percent was brought about by the growth in overdrafts and commercial mortgage loans. In addition, the banks total risk-based capital adequacy ratio of 15.8 percent is well above the minimum regulatory cap of 10 percent (AllAfrica.com 2015).

For the last six months ending December of 2014, the banks gross profit jumped by 20.2 percent to N$342.6 million. After-tax profit of the bank grew by 19.3 percent to N$319.7 million. Bank Windhoek also reported that bank loans and advances surged by 18.2 percent to N$22.1 billion at the back of non-performing loans ratio pegged at 0.66 percent. During the financial year in review, however, the bank indicated that its 13.3 percent expenditures increased, which was just in line with its expected spending (Le Roux, 2014).

Strategic Operations Issues and Challenges

The massive economic changes and trends seen in the Namibian banking sector has given Bank Windhoek considerable pressure to improve efficiency, increase dependability, and lower its bank charges rates. First, calls to innovate and position itself as a cutting-edge banking player against newcomers and traditional rivals have become undeniable. In fact, in an interview by Windhoek Observer to Christo de Vries, the banks managing director says that resource investment in technology and electronic channels for delivering products and services to clients remain a top priority in Bank Windhoek (Le Roux 2015).

Faced with these challenges, the bank finds that its current business strategy is not enough. It also have to address concerns about increasing shareholder support, loyal client portfolio, and skilled workforce to make its foothold in the sector unchanged. The next major challenge to the bank is the wave of skilled labor shortage. To address the latter concern about human resources, the Bank Windhoek need to map a clear human resource management strategy to attract and retain highly-qualified and high value talents in its sector.

The third concern of the bank is coming up with a clear business strategy to ensure that its banking portfolio is strong, differentiated, and strategic. According to its own report, Bank Windhoek would have to build on its strong brand reputation and to expend whatever it took to enhance customer service experience. To this end, the company has lined up a comprehensive competitive strategy plan in 2014. It indicated that it would focus on developing a sound sustainability and reporting framework to address the challenges in local community building and brand building (Bank Windhoek 2015).

The fourth issue that the bank faces is the need to focus on integrating strong governance. Finally, there is the need to address risk and control frameworks, the keys to accelerated operational efficiencies (Le Roux 2015).

Operations Performance Objectives Analysis of Bank Windhoek

Financial companies concerned with satisfying customers can strategically undertake strong initiatives by making available their diverse portfolio of financial products and services seamlessly in all channels at the best charge rates possible. These operational strategies should also extend to third-party outsourced services to improve the services they offer. Using the five performance objectives namely, quality, speed, dependability, flexibility and cost (Slack, et al., 2001) we will apply all these to the operations of Bank Windhoek.

Standard of Quality. Centralization of the various group support functions in the Bank Windhoek Holdings group have been finalized for improved efficiencies, leading to quality shared service capability (Bank Windhoek 2014). In the same report to shareholders, Bank Windhoek prides that it applies for favorable credit ratings from external organizations, reflecting the positive credit risks of financial instruments that it offer to the market.

Speed. In this performance objective or the bell weather of doing things fast in order for the service to be provided or consummated without delay. In response to the fast-changing customer behaviour, Bank Windhoek saw itself in urgent need to address the customer requirements through providing seamless services and services that suit the preference of customers (e.g., customization and personalization) that were once unthinkable a decade ago. Its concrete steps include the banks investment in innovations that would allow Bank Windhoek to operate in multiple electronic channels. Through increased expenditures for information technology and capacity building the company has improved customer experience (Bank Windhoek 2014).

Dependability. Meeting the expectations of customers makes one company a reliable partner of customers (Slack, et al., 2015). To see whether this performance objective is at the heart of every Bank Windhoek products and services, it will be best to look into the macroeconomic context of the Namibian banking system which requires that banks are reliable to attract direct foreign investments. The financial records of Bank Windhoek, however, does not disappoint with its strong balance sheets and it continues to be a well-capitalized bank amid the global financial crisis. To ensure its investors of the banks reliability and stability, the organizational leadership adopts a prudent management practice (Mohamed 2009). Another reason the bank is dependable is its promise of stability, reliability and accessibility. Via a network of 50 branches and agencies, the banks financial service offerings that include personal, corporate, business, electronic and international banking services can reach as many Namibian depositors and investors. To provide round-the-clock availability of its services, the bank has spread more than 234 ATMs around the country (Bank Windhoek 2014).

Flexibility. The performance objective known as flexibility shows how well an organization can characteristically scale and change in response to a dynamic business landscape. The change may be done through new product and service introductions, personalization, and customization whenever needed and will fit the preference and requirements of their customers. Organizations that can flexibly change and adapt well to cope with the business environment is commendable (Peters 1998).

Cost. This is a major operations objective and what some companies use to be able to compete. To attract customers through low cost or price, companies make sure that they produce goods at lower costs. But in the banking sector where no goods is being sold but hosting a local banking system (e.g., enhancement and upgrading of systems hardware and software, training of staff, etc.), there is the so-called bank charges to cover costs to provide various banking services. In Bank Windhoeks case, it explains that its bank charges policy is geared at providing value for their customers money (Mohamed 2009).

Operational Issues: Analysis Using Supply Network Perspective

Through improving quality, speed, dependability, flexibility, and cost of its services, Bank Windhoek has seen its profit soar and made more customers satisfied with its banking services. With its robust financial health and liquidity, Bank Windhoek continues to be studied and compared to its counterparts in the European region (Mohamed, 2009). To further fine-tune the effectiveness of Bank Windhoeks strategic operations, a further analysis of...