BCO Consultants NewsletterAutumn 2010

Why do projects go wrong?What do business projects and weight-loss plans have in common?

They typically start off with great intentions, generating excitement and good initial progress, but all too often they fail to have a lasting impact as participants gradually lose motivation and fall back into old habits.

Drawing on years of involvement in numerous projects, large and small, below are some of the key issues that we believe people need to be aware of if they want their own project to avoid delays, difficulties and potential failure.

Lack of Management Support: Senior management need to participate directly in projects, not just provide lip service to the stated goals. If employees and team members are not convinced that management are fully bought-in, they will have doubts themselves. A strong management sponsor who can drive the project forward should be identified.

Insufficient Resources: Often employees volunteer (or more frequently are volunteered) to work on projects. However they are generally not adequately released from their existing workload to allow them to focus sufficiently on the project. Managers should ensure that team members have the necessary amount of time dedicated to working on the project.

Poor Communication: Projects tend to start out in a blaze of glory, with everybody keen to share details of their involvement. However as time goes by, communications tend to fade, particularly if the project isn't progressing as well or quickly as expected. This then leads to a lessening in awareness and enthusiasm for the original project objectives. It is important to ensure that regular project updates are made to all stakeholders.

Lack of Customer Involvement: Many projects do not fully engage with their “customers”, the employees or end users who will be required to deal with the outcomes of the project. Often this results in the delivery of a solution that does not fit in with how the business really operates. End-users should be involved with the project team from the start.

Large Teams: Strategically important projects often suffer from the issue of many people wanting to be seen to be involved. As the number of team members increases, this brings a greater risk of competing interests and difficulties in agreeing goals and ways of working. This has the knock-on effect of increasing the project timescale and potentially risking the actual delivery. The core project team should be limited to 4/5 key members.

BCO Consultants – Business Challenges Overcome www.bcoconsultants.com

Advice Corner – Online Fraud Management

Online fraud is a growing concern to all companies who provide products and services to customers online, with a potential for significant financial exposure and lost revenue opportunities if not tackled properly.

BCO Consultants has worked with clients in a number of online industries to strengthen and enhance their Fraud Management Processes & Systems.

This article provides a brief background to online fraud and some pointers on how businesses can protect themselves against it.

What are some of the different types of fraud? • Hostile – Fraud perpetated by individuals or criminal gangs for the purpose of either

obtaining services illegally or testing whether stolen credit card data in their possession is still valid.

• Friendly – Undertaken by actual customers who have purchased a service, but under-go a change of mind and do not wish to pay for it. These result in chargebacks being received from the credit card issuers.

• Internal – This is where employees have access to sensitive customer and credit card data, which they then use for fraudulent purposes.

• Money laundering – Criminal gangs attempting to route illegal funds through online merchants payment systems.

• Bonus abuse – Especially prevalent in betting/gaming websites, this is where individuals create numerous accounts to take advantage of starter bonuses with a view to withdrawing “free” money.

What are the impacts of fraudulent transactions? Fraudulent online transactions can result in significant financial costs to online retailers and service providers. These include:

• Actual losses from stolen products and services.

• Financial fees and costs incurred via chargebacks.

• Cost of providing replacement services in certain sectors.

• The costs of running a manual fraud review team.

• Costs of implementing automated fraud detection systems.

• Lost revenue due to the rejection of legitimate customer orders.

• Loss of future sales and goodwill in situations where actual customers became unwitting victims of fraud.

• Damage to reputation and potential fines from industry regulators.

BCO Consultants – Business Challenges Overcome www.bcoconsultants.com

How can fraud be tackled?It might seem at first glance that combating online fraud is an almost impossible task and that the fraudsters have the odds stacked in their favour. While it is inevitable that online retailers will suffer a degree of financial loss as a result of fraud, this can be dramatically reduced through effective fraud management processes.

There are 5 distinct stages where a company can reduce the cost of fraud to its business. These form what can be described as the Fraud Management Funnel. The aim of this funnel is to allow as many legitimate transactions to flow through unhindered, while protecting the revenue stream against suspicious and fraudulent transactions. The stages are as follows:

1. Automated Transaction Screening

2. Manual Review

3. Order Acceptance/Rejection

4. Fraud Claim Management

5. Internal Data Protection

What steps should be taken to reduce risk of fraud? • Ensure that validation services provided by Visa and Mastercard are integrated into

your website payment process.

• Utilise Address Verification Service functionality to verify that the person placing an order is the real owner of the credit card.

• Ensure that there are effective and efficient Fraud Management processes in the company, with particular focus on ensuring the manual review stage is scalable and capable of responding in an adequate timeframe.

• Implement automated review systems and advanced transaction screening.

• Develop a comprehensive set of business rules to identify suspicious transactions. These rules should be constantly enhanced to combat new fraud trends and behavioural changes.

• Put in place strong internal data protection processes to reduce the risk of fraud by employees.

• Perform a regular analysis of chargebacks received from banks, in order to identify characteristics that can used to strengthen existing fraud detection rules.

• Utilise additional fraud data sources, such as stolen credit card databases, suspicious device databases, consolidated suspicious transactions shared between other online retailers etc.

Would you like further information?If your business is experiencing difficulties with Online Fraud and you would like to look at ways to enhance your Fraud Management capabilities, we would be happy to have a detailed conversation about how BCO Consultants can assist you.

Please contact Sean Rice on 086 8143156 or sean@bcoconsultants.com.

BCO Consultants – Business Challenges Overcome www.bcoconsultants.com

Customised Training Services

As a result of an alliance with an experienced training provider, we are happy to be able to offer on-site customised training workshops for companies interested in bringing the principles and practical steps of Process Improvement and Project Management to their employees.

In consultation with you, we incorporate real operational issues from your business into the workshops and work with your employees to identify solid improvement initiatives.

In this way your people benefit from training and also work on solving real business challenges for your company at the same time. This learning-by-doing approach is a very powerful method of training, in addition to being a successful mechanism for generation and evaluation of new process improvement ideas.

To obtain more details about our training and workshop offerings, please contact Sean Rice on 086 8143156 or sean@bcoconsultants.com.

The right tools to overcome YOUR business challenges

BCO Consultants has a wide range of operational improvement and project management experience drawn from many industry sectors. We also have established partnerships with other consultants, allowing us to offer a complete set of Business Improvement solutions.

If you feel that your business is not as effective as it should be, don't hesitate to contact BCO Consultants for a free consultation.

Contact Sean Rice on 086 8143156 or sean@bcoconsultants.com

BCO Consultants – Business Challenges Overcome www.bcoconsultants.com