Making outsourcing work by measuring what matters.

The Telegraph Business Club this week published research by payroll & HR outsourcers HR Access that argues that outsourcing specific skills and services carries a risk and therefore demands the business decision maker takes their time, does due-diligence, appoints the ‘right’ supplier and ensure they undertake regular performance reviews.

You might think that this appears to be sound advice – but when you dig a bit deeper, what they’re recommending could really harm the client company. For when you look closely, you find that the research doesn’t recommend developing and implementing and effective mechanism whereby the two companies work together. Rather, the research recommends that the outsourced operation is managed from a distance by senior people under the terms of a contract (with regularly reviews of a set of relevant service indicators or KPIs).

I guess the thinking behind these KPIs is well intended - it would seem sensible for companies planning to outsource parts of their business to document at length what is required of the outsourced provider so that there is a contractual obligation to deliver a clearly-understood minimum acceptable level of service for the company within defined and agreed cost parameters.

Unfortunately, though, it is rare that KPIs achieve what they set out to. For example, in my sector, the call centre industry, complaints can be rife, even when an outsourcer is meeting their KPIs: it doesn’t take a genius to work out that this can result in an adverse impact on the bottom line, as well as lots of unhappy customers (whether those customers are internal staff members or paying customers of the business)!

This is ironically because the problem lies with the very KPIs that are put in place by the company to ensure their outsourced provider delivers a quality, efficient service on their behalf! Regrettably, the KPIs aren’t linked to the needs or wants of the customer (internal or external) which the outsourced operation exists to serve. KPIs measure things that are of little consequence to the individual customer, (for example in a call centre environment, this could be call durations or average abandoned rates), and force the managers and team leaders of the outsourced provider to focus on productivity – to demonstrate to their client that they’re delivering a quality service and value for money.

Before taking steps to put in place KPIs, companies should pause to think, take stock and consider how they can develop a longer term, more customer centric approach to their outsourced relationships. By encouraging their outsourced provider to create and use measures that help them understand customer needs and how to improve meeting them, a company can really make a difference –in fact they can enable their outsourced provider to deliver world class service on their behalf!

In summary, companies may feel they need the security afforded by KPIs to protect them against ineffective outsourced providers. Unfortunately, such KPIs tend to achieve the reverse of the desired outcome, and the natural response by many companies is to fight their outsourced provider contractually.

However, there is a better way: company and outsourced provider working together as partners, to deliver an optimal quality service, is the most cost-effective and sensible way to run an outsourced relationship. Furthermore, by listening to what their customers say, and measuring what matters to them, an outsourced service provider won’t go far wrong!

Who thinks National Rail Enquiries needs a new call centre outsourcer?

On the same day that we hear that BT are bringing back over 2000 jobs from India, Ventura have announced that more than 100 posts at its National Rail Enquiries centre in Yorkshire would be transferred to India for "financial reasons".

It’s so bizarre, it beggars belief – in December 2003, Ventura announced they were moving the National Rail Enquires service from Yorkshire to Bombay in the summer of 2004, amid public fury and demands for the then Transport Secretary Alistair Darling to intervene.

From that time, we all heard (and some of us even experienced) crazy stories about duff advice given by well meaning and long suffering call centre agents in the Indian Subcontinent who simply didn’t have the local knowledge a UK based adviser would have… I wonder how much additional, unnecessary demand that generated for a busy helpline?

This continued and came to a head in autumn 2007, when consumer group Which reported their findings of a mystery shopping exercise they did which demonstrated that misinformation & poor advice meant that customers could be paying well over the odds for their tickets! By the time we got to spring 2008, the media was reporting that the tide in outsourcing was turning back onshore – with Lloyds TSB and National Rail Enquiries cited as having reduced their customer-contact presence in India.

It is now beyond comprehension that a little over a year on, Ventura would be doing yet another u-turn on the very day that even BT is bringing jobs back to the UK.

On their “Facebook” page, National Rail Enquiries state that their telephone service is one of the busiest telephone numbers in the United Kingdom. They quote all manner of interesting statistics, including the following:

Number of calls offered: 16,058,777
Number of calls answered: 15,153,487
Percentage of calls answered (PCA): 94.4% (meaning they missed nearly a million calls!)
Average time to answer calls (ATTA): 21 seconds

They also say that they monitor quality using mystery shopping (99.29% of calls answered “correctly”) and customer satisfaction surveys (90% customers would recommend National Rail Enquiries to family and friends).

Blimey! Look at that last statistic a different way, and what they’re really saying is that 10% of people wouldn’t recommend them!!

This can’t be good for anyone, so the challenge to National Rail Enquiries is find a call centre outsourcer that has a better way of doing things - delivering quality more efficiently to compete with offshore locations.

This blogger knows one – do you?

Beating boredom at work - why the role of managers must change!!

This month’s edition of the Chartered Management Institute’s publication, Professional Manager includes an article on boredom in the workplace (http://www.managers.org.uk/client_files/PM%20July%2009%20boredom.pdf).

In the article, Dr Sandi Mann discusses how changes in the world of work, such as the introduction of new working practices like call centres have increased employee boredom – citing that repetition, restricted autonomy & a lack of job control due to “robotisation” and scripting are major factors in the high levels of staff turnover in the industry.

Mann notes the irony that as companies strive more and more to control staff output in order to drive down costs, in spite of the fact that this can severely damage the organisation financially and reputationally because it causes poor work performance, absenteeism, stress-related health problems and job dissatisfaction.

The article goes on to suggest various solutions, including empowerment of staff and elimination of standardisation in the work, arguing sensibly that the cost savings to be made could balance any training needs.

However, this blogger thinks the solution needs to go much deeper, to really get to the heart of the purpose of management.

The current operating model in most organisations (and that which is so prevalent in the dreaded call centre!) is that managers exist to police the work that staff do – ensuring they achieve their set (numerical) targets and conform to procedures & scripts…

Yet what managers really need to do is to optimise their team’s efforts to achieve business aims whilst recognising and understanding individual differences, strengths and interests & the benefits of co-operation and losses of competition.

Instead of encouraging a culture of blame, where everyone conforms, managers need to create trust and an environment in which freedom & innovation flourish.

Then and only then can organisations become truly successful (and have staff that are empowered, with high job control, and doing an effective job)!!

Customer service - arrogance or ignorance? You choose.

BT, British Gas, Sky, Virginmedia & Vodafone were named and shamed this week in the findings of a survey of 5000 people across the UK into their views about 30 companies with call centres. Other major corporates featuring in the survey report include HSBC, AOL, Barclays, O2 and HMRC.

There are no real surprises when it comes to what people complained about - "the language barrier" and "call centres based abroad" were identified as one of the most infuriating aspects of call centres. And consumers said they hated the use of automated systems and having to answer numerous security questions as well as being passed from pillar to post and needing to repeat themselves.

There were no good guys coming out of the survey, either – banks and retailers seemed to come out just as bad as the communications and utility companies! But BT really took the top prize – the survey found that BT was almost twice as bad as second place British Gas when dealing with issues and complaints, even being accused of leaving callers on hold or struggling to get through its automated system to make complaints. And BT came top for longest holding times, with 18% of people complaining about the company!!.

The managing director of BT's consumer division was quick to dismiss the findings of the survey as “twaddle”, explaining that BT’s own “extensive surveys” demonstrated customers were far more satisfied! He even went on to brag that "the time it takes BT customers to get through to an adviser has dropped by 65 per cent over the last year and is now 32 seconds on average.” And that "customer complaints have reduced by over 40 per cent in the last year.”

Blimey – if they think that’s good, how bad was their service last year!

Unfortunately, however, as we can see from this survey, BT is not in isolation in the customer service hall of shame…

Maybe it’s time the senior people in responsible for the dire state of service offered by call centres became aware of what really matters to their customers’ and encouraged their call centre managers to focus on serving the customers they exist to look after instead of managing staff targets, using fantastic new technology to deflect their calls or sending calls to offshore call centres just to save a few quid.

But such a fundamental mindshift would take a strong, confident and magnanimous leader – after all, they’d have to admit they got it wrong, before they could improve things.

So, this blogger wonders if the repeated denial of any problem is a sign of corporate arrogance or corporate ignorance… or even worse, a bit of both?

The Observer needs Caulking!

After 16 years this week's column in The Observer by Management Editor Simon Caulkin was the last. I understand this is a decision made by management at The Observer as a cost-cutting measure…

If you’ve never read Simon’s brilliant yet appropriate and relevant column, then you really don’t know what you’ve been missing! Simon has written about ideas this blogger holds dear – indeed his column has been a must for anyone who understands that traditional management ways of thinking have largely created the mess the economy is in! His column has always been a refreshing and insightful read that appealed yet was relevant across the political spectrum, both public and private sectors, as well as different industries.

I am dismayed and disappointed by The Observer's bizarre decision to axe this column. And I’m not alone in my thinking… over the last weekend, over 50 distinguished signatories (including little old me!) gathered to produce not just a letter of protest to the powers that be at The Observer, but also an earnest recommendation that they reinstate Simon’s column as a matter of urgency!

The letter, signed by a diverse group - ranging from entrepreneurs, SMEs, management consultancies, large corporations, academia and renowned authors across the globe was sent to the editorial team at The Observer this morning and we await their response.

In the meantime, we’ve set up groups named “The Observer needs Caulking!” on both Facebook and LinkedIn.

This column must continue. Please show your support by joining these groups and posting your comments for all to see!

Q - Do call centres face increasing competition from the web? A - Only if they're not very good...

In a recorded message played to attendees to the Call North West conference this week, Beverly Hughes MP said that call centres face increasing competition from the web.

At first glance, this observation might seem a bit left field, but on reflection I think she could have a point…

I was talking recently to a contact of mine about call centres, specifically a well known UK bank. This company is one people used to always recommend (yes, you can probably guess who it was). I probed a bit deeper when she said their service was always excellent… After all, having seen a fly on the wall documentary on TV that featured that bank not so long ago, I figured that their new increased focus on individual staff achieving sales targets and throwing squidgy toys at colleagues on the phone to a complaining customer to improve staff morale might not be conducive to a fantastic customer experience…

I was disappointed, but not surprised, then, when the lady explained that she mostly dealt with them over the internet…. I guess then, there’s nothing that can go wrong - if you do it yourself, you do it right first time…

On that basis, then, I can understand where call centres could face competition from the web… Computers can replace transactional relationships (and save the companies money), but they can’t replace everything. Sometimes as customers we need to talk to someone, have a dialogue – after all business is about people, how they interact with you, how well they respond to the demands you place on them and the value they create in serving you… if we get to the stage where we only stick with businesses because their online capability works for us, then there is no longer any customer loyalty or value in our brands.

Yet ironically, that’s where the call centre can come into its own – by creating value and building long term and sustainable customer relationships and brand loyalty.

Unfortunately, so many companies miss this trick… they spend so much time in call centres focusing on targets and silly games to motivate their teams, that they forget the very customers they exist to serve. What businesses need to do is to start looking at the world through their customers eyes, design their processes to meet the demands their customers place on them, whilst encouraging their staff to take the time to do things right first time.

If they did this, then they’d find they could really make a difference to their reputation and the loyalty of their customers…. Now does that sound like a good idea, or what?

Observations on the importance of customer service...

Chey Garland speaking at the IoD recently talked about offshoring and how some work will always be done abroad to reduce cost. She also commented about getting things right first time and the importance in a recession of a quality service, retention of existing customers and doing things to a higher standard. All fantastic points I would agree with, but unfortunately, Chey’s subsequent observations about call centres needing to “do things rapidly” because time is what’s most important to customers these days let her rhetoric down.

We all know that from a customer’s perspective it’s most important for things to be done right than to be done quickly.

Instead of focusing on speed (or how many customers can be processed during the course of a shift), call centre managers need to learn to focus on responding to their customers demand, and empowering call centre staff to take the time to do things “right first time”, and creating a work environment in which service excellence can flourish.

If all call centre managers did that, then they could reduce complaints and repeat calls: ironically taking the cost out and improving service…. Hmm – perhaps there could be a better way of working?? This blogger thinks so...