To properly evaluate the functions of the National Bank Exchange Bureau, it is necessary to study the processes that are involved at the upper level management. In order to accomplish this we had set up an interview with Marie Claude Genie, who is a manager at International. Marie Claude had briefly described the current processes involved in transmitting exchange rates from International to the exchange bureaus. In a simplified context, a Reuters's terminal furnishes real time exchange rates which is then used to calculate the buying and selling spread that in essence becomes the margins of transactions for all 58 exchange bureaus across Canada. In addition, to this, a subtle difference between the transmission of other foreign exchange rates and US exchange rates was observed. The main difference between is that the US spreads can be entered directly into the system every morning before the workday begins. Unlike the US spreads, the other foreign rates are transmitted via fax/modem at 3:00 p.m. the day before the actual workday. With the current system, it is obvious that the whole foreign exchange process functions at a less competitive manner. This is due to the fact that the world market is ever changing and ongoing and any drastic overnight changes would force International to somehow contact the exchange bureaus and make them aware of these changes. This is usually done by phone and as a result it proves to be an inefficient process.

The interview further enabled us to identify the needs at the administration level, which are constrained by the flaws in the current system. This has forced International to operate again at an inefficient and less competitive manner in this volatile market.

According to Marie Claude, an ideal system would enable her and other International agents to enter and update rates directly in the system. On average, the markets fluctuate 4 times a month. Due to the system's limitations, International forces the exchange bureaus to contact them for updated rates. This slows down the productivity level for both the exchange bureaus and International since the confirmation of rates is done by telephone whereas on-line updates would have been much more effective.

Another weakness we were able to pinpoint was the inflexibility of the system. When US rates are entered into the system, the rates are uniformly distributed to all 58 branches across Canada (refer to chart in Appendix). The inflexibility of the system prevents Marie Claude from customizing rates and taking advantage of demographic characteristics in different areas across Canada. According to Marie Claude, the branches are divided into 8 Canadian regions and each should have their own particular rates so as to fully benefit functionally in a competitive and profitable fashion.

In continuing with weaknesses of the system, there is the matter of transfers. The exchange bureaus have to report, on a monthly basis, to International concerning the level of their liquid inventory. The purpose of this is to notify International of any currencies that are inactive or active. Unfortunately, these monthly verifications do not serve Marie Claude any purpose since transfers between exchange bureaus are not possible. If one particular exchange bureau is missing liquid funds for a specific currency, they have to notify International to order more. Marie Claude does not have a reserve where she keeps different currencies. To respond to the exchange bureaus demands, Marie Claude must make an order to the Bank of America. The Bank of America will sell this to Marie Claude and charge a fee. Marie Claude tallies up the currencies and transfers the funds to the exchange bureau in need. The unfortunate part of this situation is that there exist a high risk of losing money since the rates, at which the currency was purchased, could have dropped by the time the transfer had taken place (can take up to two weeks). By the end of the month, Marie Claude would receive an inventory report and realize that there was an exchange bureau that had a surplus of this currency that was lacked by another. Had the system given Marie Claude the possibility to permit her to check the inventory level of each branch (real-time), she would have been able to make internal transfers and do away with resorting to Bank of America.

The time spent with Marie Claude proved to be an informative one. It allowed us to see the dilemmas the system poses on the users at the management level. The need for change is quite evident and its solution would be a beneficial one. The inflexibility of this system causes inefficiency in the way things are done and is responsible for the costs that it has to needlessly absorb.