The "customer journey" and search for the Holy Grail
The following article originated on Six Sigma IQ.
The Holy Grail of Process Excellence these days is what some are calling an "Outside-In" approach. And one British energy company, British Gas, is on the quest to find it.
First, what’s Outside-In?
Put simply, you see your company through the eyes of your customers and make sure that everything you’re doing ultimately makes you serve them better.
That premise is deceptively simple. To achieve a true Outside In approach businesses must contend with technological and physical infrastructure that is both unwieldy and expensive to change, in addition to processes, which may have evolved when customer needs and the operating environment were different.
Customer needs are evolving faster than they ever have done and the rigidity arising from such company structures stops businesses from keeping pace. The problem is that many organizations approach their business from the "inside out", Charles Bennett, SVP for Delivery Operations at the BP Group, says. Employees work in their own departments and evolve processes that solve internal problems and the symptoms of what he calls "organizational pain" – things that may not work but also do not address "the causes of work" i.e. the needs of their customers.
In other words, businesses often focus their efforts on solving internal problems that make the lives of the internal customer easier, but do not address the needs of the person who is ultimately paying everyone’s salary.
"Company misalignment is greater than ever before and some of us are hurting unnecessarily," Bennett adds.
Bennett says that you need to think about "cause of work" rather than "the symptoms of work" and you will get a lot closer to identifying meaningful "change opportunity."
How does this work in practice?
British Gas, the largest domestic energy supplier in the United Kingdom, had some terrible "symptoms" to overcome following the implementation of an ERP electricity and gas billing system that aimed to streamline billing and customer service operations.
For various reasons the implementation of the "Jupiter" project didn’t deliver on its expected results (Centrica, the parent company, currently has a lawsuit pending over the project against consulting company Accenture, who denies any breach of contract).
Wherever the fault lay, the new CRM and billing system was a maze to navigate for customer service agents, according to Adrian Heesom, Head of User Interface Delivery, who oversaw British Gas‘ revamp of the Home Move Process. Some processes, for instance, required an agent to traverse up to 67 different screens. There was no single way of moving through the system, which meant that the potential for problems was high and customers experienced inconsistent service.
Additionally, the system generated a large number of "exceptions" – processing errors that required manual intervention.
A customer’s experience during this time "was a lottery," Heesom says, "entirely dependent upon the skill and level of experience of the customer service agent you were randomly put through to by the telephony system".
One reviewer on consumer website This is Money describes the problem that customers faced. The reviewer says that dealing with British Gas at the time (2006) was "customer service hell" and a "Kafkaesque nightmare" and goes on:
"Despite repeated requests, British Gas’s billing department kept failing to send me a correct bill. Everytime I called up about this I received an apology and was assured a correct bill was on the way.
However, while the billing department was repeatedly cocking up my bill, another department was sending me demands for £31.45 I’d been told I didn’t owe. These started as reminders, then became red letters, a threat of disconnection, notice of legal action and finally an ‘urgent’ notice that the company was getting a warrant to enter my home and disconnect the gas with the police potentially present."
To rectify problems, British Gas began to focus its efforts on efficiency and reducing back office exceptions. Between 2005-2007, the company successfully cleared the backlogs and reduced the raise rate of exceptions created from 40% to less than 5%. It also reduced the time it took to complete the "Home Move" process – where customers move from one address to another, requiring them to close off the old accounts and set up new ones – from 4 weeks at the beginning of 2005, to less than 5 days for the majority of its customers (99%).
In parallel, the IS Department had managed to stabilize a system that was, in effect, coming apart at the seams, and management was meeting all the targets that had been set regarding efficiency.
The problem in Home Move was that "we had gotten ourselves really efficient and cost effective at pushing customers out the door," Heesom says.
The company was continuing to rapidly lose customers - owing from incorrect billing, and contradictory customer communications - even though management was meeting all its targets for efficiency.
BBC News, for instance, reported in 2007 that British Gas had the most number of complaints of any energy company in the United Kingdom adding that the company had a 30% share of the gas and electricity market but generated 70% of the complaints.
Enter Cem Miralay, Director of Contact Center Systems Transformation at British Gas, who came along with the principle of "customer journey management".
The idea was centered on the premise that customers have various key touch points with the company – when they join, leave, or change circumstances – and it’s essential to make sure that the interactions during those touch points are as smooth as possible from customer’s perspective.
Miralay set about convincing the leadership community that their performance wasn’t quite as good as they thought it was – no mean feat – and selected the complex "Home Move" process as the first area to target for a radical makeover.
Speaking last month at IQPC’s conference on BPE for Utilities and Telecoms in London, Miralay said that the systems involved in the Home Move process were so complex that no customer service agent could get every step of the process right on the first attempt. Out of 100 different operators 96 got the process wrong in 96 different ways. Only 4 managed to make the same mistake in the same way.
No wonder customers were having such a terrible time.
What did British Gas do?
One of the first steps in addressing the problem was to redefine the metrics by which the company measured its success. It determined that ultimately BG customers moving home just want a hassle free experience. So whilst efficiency and cost driven targets were still monitored, in came new ones that were much more telling of how successful British Gas’ new process was in terms of customer outcomes.
British gas started to measure, among other things:
- The Customer’s Experience (using Net Promoter Score [NPS] surveys)
- How many customers were retained during the home move process?
- Of those customers retained, what products did they have when they moved out (i.e. were they both electricity and gas customers?) and which did they have when they moved back in? (i.e. did they drop one of the products?) - How much of their final debt was paid?
This made the management objectives much more closely linked to retaining customers and gave resistors to the changes absolutely nowhere to hide.
The next step was to simplify the technology that customer agents use. Heesom created a web based "Wizard" User Interface (appropriately named Merlin) that takes agents across the CRM and billing system in a set way. This improved consistency and ensured that agents were no longer wondering haphazardly across the system; "they now just can’t get it wrong". It also reduced the number of separate screens that an agent had to navigate between from 67 to a maximum of 8.
The key to the success of Merlin, Heesom says, was that customer service agents were sat next to the IT developers controlling the solution; essential in creating a real culture of shared ownership
What were the results?
Customer service improved in consistency overnight with only 1 hours training on the new system. Agents were freed up to capture more information useful for sales and marketing purposes during the interaction, final bills could be calculated immediately, which also meant that the amount of debt that British Gas had to write off was down.
In total the revised Home Move process project cost a total of £4 million. Heesom reckons that the project gave the company a £10 million pound return in the first year and is well set to do that again this year. Between 2009 and 2010 British Gas Adjusted operating profit increased 37%, up to £1,562 (m) from £945 (m) in 2009. The bulk of that growth came from the "Downstream" part of the business (which includes marketing, sales, distribution and relationship management with consumers).
Latest research (September 2010) from Consumer Focus, a British consumer watchdog that measures the number of customer complaint cases against the major UK energy companies, ranked British Gas 3rd best of 6 major companies overall.
It’s quite a turnaround from just a couple of years prior.
"Put your customers first, think about the processes required, and then start to look at how resources and costs impact what you can deliver." All too often, Heesom says, "we put ourselves first in a box constrained by cost or what we’ve always done and then design processes and systems based on that."
The company is well into rolling out the "customer journeys" concept across other areas of the business, and investing in a more intuitive user interface called Agent Workbench containing more Wizards.
A few months back, Six Sigma IQ did a video interview with Cem Miralay about his work at British Gas. To hear him talk about the project in his own words check it out here: http://www.sixsigmaiq.com/sponsor_video.cfm?externalid=920