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Broadband Wales Observatory

Interview Study Report

Jones Associates

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MONTHLY FINANCIAL METRICS
DESCRIPTION	BEFORE Broadband	AFTER Broadband	IMPACT on Profit
Cost of Internet Connection:	£17.00	£20.00	£-3.00
Home Working	£1,420.00	£319.00	£1,101.00
Employee time on tasks:	£300.00	£75.00	£225.00
Operational Overheads:	£550.00	£200.00	£350.00
Sales Revenue:	£N/A	£N/A	£N/A
Direct Costs:	£N/A	£N/A	£N/A
TOTAL MONTHLY BENEFIT:	£2,287.00	£614.00	£1,673.00

INTERNET CONNECTION CHANGES
DESCRIPTION	BEFORE Broadband	AFTER Broadband
Internet Bandwidth:	56Kbps	2Mbps
Internet Users:	1	5

Key Broadband Benefits from Interview Report

Enabled the business to streamline their business processes, which resulted in reduced paperwork, faster turnaround of new business and improved cash flow.
Staff are more productive and stationary and postage costs have been reduced by 80%.
Able to implement a hosted front and back office financial services management system and to store all client data off-site.
The introduction of home working resulting in greater productivity and a reduction in travelling expenses.

Document Information

Investigator:

Name: Aled Owen

Organisation: N/A

eMail: aled@mentermon.com

Primary Unit of Analysis

Organisation: Jones Associates

Contact Name: Huw Jones and Ron Jones

Job Title: Directors

Address Line 1: Britannia House

Address Line 2: Holyhead Road

Town: Llanfairpwll

County: Anglesey

Post Code: LL61 5SZ

Tel: 01248 716111

Fax: 01248 714100

eMail: office@jonesassociatesifa.com

Web Site(s): www.jonesassociatesifa.com/

Background on Organisation

Jones Associates Ltd is an independent financial advisory service located in the popular and well-known town of Llanfairpwll (the one with the long name) on the Isle of Anglesey. Its directors, Mr Huw Jones and Mr Ron Jones are fully qualified financial advisers, accredited via the Financial Services Authority (FSA), and they pride themselves on the high level of customer service they provide their clients. The business presently employs two additional administrative assistants whose primary role is to undertake the day-to-day issues of maintaining the office such as responding to callers, filing, inputting customer data and arranging appointments. The business' turnover for the last financial was in the region of £250,000.

The business was set up in late 2002 following the directors' decision to relinquish their posts as financial advisers for a major high street bank. Huw and Ron both formerly worked for a high street bank, but had become increasingly frustrated by the restrictions of being tied to specific products and providers. In 2002 they decided to become self-employed and this allow them the freedom to offer their customers a complete spectrum of financial solutions.

Initially located in Llangefni in offices rented from the local authority the business established itself and soon gained a reputation as a leading local source of quality, independent advice regarding mortgages, investments, insurances and savings. In 2005 the business relocated to Llanfairpwll, buying their own premises, thus giving the business a more stable future and the potential to grow the business by taking on more staff to satisfy the greater demand for their advice. The new premises are in the process of being substantially refitted to accommodate further offices and conference rooms.

Typical customer types include personal, businesses, clubs, societies and trusts and by far the majority are sourced via word of mouth recommendations. The business' Web site does yield a small number of leads, but this is to be expected due to its infancy as a marketing tool.

General Comments and Observations

Name of Interviewee: Huw Jones

Job Title: Director

eMail Address: office@jonesassociatesifa.com

Date: 13^th October 2006

Messrs Jones, from the inception of their company, were eager to utilise the potential that Information Technology could provide in streamlining business processes and also in the possibility of boosting the company's bottom line. In a fast changing sector, historically, drowning in paper, the financial services industry was in a process of rapid change to embrace the use of IT and the Internet. From electronic data storage, CRM, and on-line applications to the rollout of new products and services transmitted over the Internet. Both directors were both fairly IT savvy having used computers in their previous posts and this has given both a good grounding in their ability to understand not only the potential that new software and hardware would provide their business, but also in seeing how essential a high speed Internet connection was to the future of Jones Associates.

Notes on Pre Broadband

The business commenced trading in the fourth quarter of 2002 initially with a staffing level of three. Both directors were eager that a Web site be created at the outset, predominantly to give the business a sense of stability to potential clients. The site,www.jonesassociatesifa.com/, was created on their behalf by a professional developer located on the island with whom they have worked closely ever since. They were given instructions in how to update the text and images and the task has since become second nature.

The directors invested heavily into the purchase of high spec office equipment including four desktop computers all networked via a central server allowing users to access and store files and share documents. The building was serviced by four telephones, three used for voice calls whilst the other was shared between a fax machine and the Internet. This was slightly cumbersome when the Internet was required the business was unable to send or receive fax messages.

Jones Associates' initial link to the Internet was set up using BT via a dial-up modem giving them a connection speed of up to 56kbps. This connection allowed one of their four computers to access the Internet at any given time. BT charged a monthly fee of £17.00 for the service for unlimited access.

In Jones Associates' instance the Internet was intended to be used for numerous functions including research into alternative products and as a means of comparing products against each other. Changes and updates to products, rates and laws were also researched and often downloaded on a daily basis. However the predominant reason for the Internet was to complete applications on-line on behalf of the clients enabling the directors to cut down the nightmarish administrative task of hand writing all the forms, and packaging and sending items in the post. Historically, the turn around for hand written forms was in the region of four weeks providing that no errors were found. Although the production of electronic applications was not compulsory, sellers actively encouraged it, as the long-term goal of the financial planning sector was to convert their whole operations from paper based to electronic documentation. The necessity of completing the forms electronically was given added weight and importance as the underwriters rewarded electronic applications over hand written documents by increasing the commission available to resellers.

However, very soon, the limitations of their Internet connection became very clear with a series of dropped connections, time outs and wasted time as one director waited for the other to complete his work. This resulted in critical security updates not being completed, especially if the download was of any significant size. On-line applications often had to be re-entered meaning that applications were sometimes duplicated thus causing confusion and taking time to remedy. It also had the knock on effect of a lot of wasted time being spent waiting for free time to spend on the connected computer. All these problems led to commission payments being delayed causing a negative effect on the cash flow of the business and to the elongation of their working days with forms being input very late at night. All in all an alternative solution had to be sought.

Prior to the availability of ADSL upon Anglesey the choice was somewhat limited. The options included ISDN, satellite broadband and wireless broadband. ISDN and satellite broadband were quickly rejected, as the costs were deemed prohibitive. Jones Associates, due to their central location upon the industrial estate in Llangefni were able to become part of a pioneering private sector wireless broadband project. The seller basically paid the costs for a leased line and subsequently transmitted the signal to numerous businesses in the vicinity. After ensuring that their premises passed the crucial test of being in a clear line of sight with the provider's transmitter, Jones Assoc signed on the dotted line and their connection speed jumped from 56kbps to 2Mbps overnight. This proved to be a revelation and at first seemed the perfect answer at a reasonable cost.

Just as the initial promise of the Internet had appeared better on paper than in real life, so with this solution. Problems arose from days on end without a connection due to both adverse weather conditions and technical frailties. The supplier proved to be very inconsistent with technical support promising to remedy problems but taking days to do so. The advertised 2Mbps was in reality closer to 1Mbps and although faster than the dial up modem proved far more inconsistent.

The wireless solution was never perceived as a long-term answer, but more of a short term stop gap until the roll out of ADSL across the island. The directors learned a valuable lesson in the importance of a robust technical support package something they vowed to address upon their relocation and their uptake of any new technology.

Notes on Post Broadband

Jones Associates were fortunate to an extent as the business' location in Llangefni enabled them to access ADSL fairly early in its rollout across the island. The localtelephone exchange was enabled on 18th August 2004 (It was the 4th exchange out of 20 on Anglesey).

The business switched over from their wireless solution to standard ADSL on the 25th August and received a connection speed of 512kbps, which, granted, was a bit slower than they were used to but in reality made little difference to the day-to-day usage. Since this date the company has relocated to Llanfairpwll, which by the time of the move was also benefiting from ADSL. As with many other users their Internet connection has now also been boosted from 512kbps to 2Mbps free of charge.

The new connection allowed all four of the company's PCs to connect to the Internet simultaneously without suffering any real slow down. The ADSL telephone connection was still shared with the fax machine line but now both could operate at the same time.

Notes on Change Impact and Benefits of Broadband

Changes to Business Practice

"External forces dictated that we streamline the whole business model and Broadband gave us the platform to do so."

The business needed to undergo wholesale changes to the way it worked in order to streamline time-consuming processes and to reduce the amount of repetition which was prevalent at the outset of trading. There was a desperate need for back office procedures to be integrated with the sales team in order to increase profitability in a sector where margins are tight due to competition.

Upon the uptake of Broadband the practice could actively look for the perfect solution, as most technology lead products demanded a high speed, reliable method of data transfer. This simply would not have been possible via dial-up.

"Broadband opened the doors for us to actively look at a technology-led solution to our slightly antiquated method of operating"

With strict compliance rules set out by the FSA and IFA, it was essential that the business conformed and most importantly found a method of doing so effectively. Messrs Jones felt that reconciling risk and commission efficiently, a long drawn out task performed by one of the directors, and introducing an operator friendly CRM package was crucial to the future of the business. Having researched what was on offer for the sector, Messrs Jones decided to make use of the Inteliflo system which had the potential to answer most of the business' needs. This system enabled Jones Associates to manage clients effectively, transfer data between sellers, underwriters and themselves and store confidential documentation centrally. This system, although on the surface expensive at £350 per month, would more than prove to be a good return on investment as it had the potential to save the business a substantial number of staff days thus allowing the directors to be generating business rather than stuck at the office reconciling figures and assessing compliance procedures. The software also enabled Jones Associates to turn around new business in a fraction of the time that it had taken in the past, enabling the business to be paid quickly thus improving the cash flow of the business.

"The cash flow of the business has improved dramatically. In the good old days it could take up to four weeks for the payment to come through. Now, with our ability to send everything via eMail the business's payment comes through in a matter of a week."

Reduced Overheads and Increasing Profits

Creating electronic documentation as opposed to paper-based documents enabled the business to make important savings to major overheads. This had a huge impact to postage fees and to the amount of stationery used. But by far the greatest impact was to the number of man-hours that were previously swallowed up in dealing with the post. These hours could be spent more productively thus increasing productivity.

As Huw explained, "Prior to broadband most documentation was sent through Royal Mail thus incurring a substantial cost to the business, not only in postage fees but also in stationery and in the time spent by the clerks packaging the documents and taking them to the post office. On average the weekly cost of this equated to around £100, with the stationery amounting to £20 and the staff time 10 hours. With the uptake of broadband this was significantly reduced by around 80%."

The utilisation of eMail just would not be possible over a dial up modem primarily due to the size of the documentation in question. On average most attachments are in the vicinity of 5MBs. In order to show the sheer difference between dial up and ADSL it is best highlighted as: -

Table highlighting length of time taken to download a 5.5MB file

	Download Speed	Time Taken
Dial Up	33.6Kbps (*)	21 minutes
ADSL (Broadband)	2.048Mbps (*)	21 seconds

(*) The speeds indicated relate to the average download for standard 56Kbps and 2.0Mbps connections

Real time valuations of customer's portfolios are now possible directly over the Web via the Inteliflo system. Historically this would have been done via numerous lengthy phone calls which could take up to an hour. This is a huge benefit to both the business, in terms of man hours saved and to the customer giving them instant service and giving them the reassurance that the business is effective and professional.

Home working made possible

Since the take up of Broadband Jones Associates have employed an additional financial adviser who works predominantly from home. He has the ability to write business, scan and eMail all the documentation to the office in order that the clerks are able to input the details prior to sending them directly to the underwriters. This method of working simply would not have been possible prior to broadband.

This has resulted in major benefits to the business, reducing the need to purchase new IT equipment for the staff member not to mention the substantial reduction in travelling expenses and man hours simply spent driving to the office just to hand over forms. In Jones Associates' case this equated to the staff member's commute of around 80 miles @ 45p per mile (£36.00) and also the time saved i.e. 2 hours. This time could be used in producing work rather than simply sat in a traffic jam.

"Within the organisation all parties have access in real time to all the documentation however none HAVE to be office based anymore. Due primarily to broadband our productivity and service offering has improved immensely"

Threat of Data Theft Reduced

All documentation is held off-site on the Inteliflo servers providing instant access from anywhere. This has a significant benefit to the business as not only are all the files backed up, but it means that there are practically no paper records stored at the office. It also means that critical customer information is more secure reducing the threat of theft. This is a huge step for the business in their ultimate goal of a "paperless" office

Internet Connection Metrics Summary

Service Description	Before Broadband	After Broadband	Change or Comments
Type of Internet Connection (Dial-up, ISDN, ADSL, Cable, Satellite, Wireless, Leased Line):	Dial Up	ADSL
Bandwidth Mbps or Kbps	56Kbps	2Mbps
Number of Internet Connections:	1	1
Date of Connection:	Nov 2002	Aug 2004
Service Provider:	BT	BT
Total cost per month for Internet connection(s):	£17.00	£20.00
Number of users/employees using Internet connection(s):	1 at any one time	5
Any other comments:

Employee Task Metrics Summary

	Monthly Apportionment
Task Description	Before Broadband	After Broadband	Impact on Profit
Post (Based on 1 hour per day @ £7.50 per hour)	£150.00	£75.00	£75.00
Travelling Time (Based on 2 hours per day @ £17.50 per hour)	£700.00	£175.00	£525.00
Telephony (Based on 1 hour per day @ £7.50 per hour)	£150.00	£0.00	£150.00
TOTAL	£1,000.00	£250.00	£750.00

Financial Metrics Summary

	Monthly Apportionment
Financial Measure	Before Broadband	After Broadband	Impact on Profit
Operational Overhead Costs
Postage fees and stationery (Figures derived from the Directors)	£400.00	£150.00	£250.00
Travelling Expenses (80 miles @ £0.45 x 20)	£720.00	£144.00	£576.00
Telephony (Figures derived from the Directors)	£150.00	£50.00	£100.00
Sales Revenue	No Change

Direct Costs	No Change

TOTAL	£1,270.00	£344.00	£926.00

SUMMARY CHANGE IN USE OF INTERNET APPLICATIONS
DESCRIPTION of Application	BEFORE Broadband	AFTER Broadband
Antivirus and software Updates	Manually to control use of bandwidth	Automated
Transference of electronic files	Yes- but time consuming and frustrating	95% of documentation now sent via eMail.
Risk and valuation assessments of portfolios	Over the phone	Real time instantly over the Web
Home Working	Not possible due to limitations of eMail	One member of staff permanently working from home
Turnaround of new business	4 weeks minimum	1-2 weeks
Commission payments	4 weeks minimum	1-2 weeks

Main Messages

Improved communications through greater use of eMail
Improved efficiency by spending less time on tasks requiring Internet access and using the Internet to transfer documents rather than printing and mailing them
Reduced overheads by using eMail instead of telephone and post for communication
Faster turnaround of product because of ability to upload applications direct to the underwriters
Customer service has improved because of being able to instantly respond to enquiries

Jones Associates have indeed made significant cost benefits from transferring from dial-up to the use of broadband. However by far the biggest benefit is to the operational efficiency of the business. This has had major positive knock on effects to their margins, to their relationship with their customers and to the stability and effectiveness of the business. Their use of broadband does not finish here as they hope to take the next step forward and make use of VoIP in a hope to reduce overheads further.

"Asking me to give a financial breakdown of how broadband has helped my business is a difficult thing to do. There is no doubt that it has significantly saved in areas such as telephony and stationery but by far the greatest benefit is in how we conduct our business on a day-to-day basis. It has enabled us to be where it matters and that is in front of customers. In a very customer service orientated business, broadband has enabled us to give our customers a more rewarding experience and this shows in the number of recommendations we receive."

"Most of the actual financial savings have been channelled to other parts of the business. We learnt an important lesson in the value of robust service level agreements and we place great importance on these. It is reassuring that the systems we run are looked after by professional who treat us accordingly."

Huw Jones

Director, Jones Associates Ltd