New battleground for future Competitive advantage
Although significant investment is made in acquiring and retaining customers, this is increasingly becoming more difficult to achieve. The ability to deliver both requires a commitment to improve service levels, demonstrate compliance and deliver at a lower cost base.
Rapid adoption of technology, increasing regulation, changing customer behaviour and a requirement to operate within tighter margins just to keep pace with the competition are combining to disrupt traditional customer service models.
Whilst many service providers have started the journey to transform their business model and improve their competitiveness in an ever-changing environment, developments are often focused on digitally transforming how customers interact with the front office.
Rise in importance of the back office
For many years the front office has received significant investment to drive down costs and improve service performance to customers. Thanks to large cost bases and direct customer contact, it has been the obvious place to optimise. However, customer interactions with front line staff are decreasing as more and more customers interact with organisations digitally. As customers now use self-service options, submit requests online and download standard information required, it is the back office rather than the front office that will play the pivotal role in creating service differentiation
Software technology development has also enabled advancements to be made in back office operations management, however, less thought and action has been given on how to transform the back office and this represents the new challenge.
Early adopters of back office work management solutions are realising significant savings, ranging from 20% to 40%
Increase In Back Office Responsibilities
In reality, the back office actually touches the customer many more times than the front office, which can be clearly evidenced in operations with end to end measurement and tracking. Touch points include multiple transactions and correspondence that make up the complete end to end service delivery. It is this ‘behind the scenes’ contact and the impact both on customer service and satisfaction levels that is severely underestimated, as it’s not often measured and is therefore a blind spot.
It’s the back office that delivers on promises made by sales, marketing, call centres and whenever a transaction is initiated with a customer. Moreover, the back office is truly responsible for delivering the customer service. Meeting customer expectations of fast and accurate turnaround of services achieved at industry best practice cost are the keys to delivering competitive advantage – and these services are substantially fulfilled in back office operations.
Eliminate waste and deliver more for less
As the value of the back office has become more widely recognised, organisations are increasingly looking for service delivery improvements. This includes better operations management to increase back office performance, whilst at the same time reducing cost. The key question being asked is how can this be unlocked?
Operations seeking to deliver genuine transformation have recognised that back office operations are central to improved customer satisfaction and reduction in overall operational cost. The reality is that back office transformation is the foundation for digital transformation and represents the largest opportunity for both significantly improving the customer experience and reducing cost, or increasing capacity to redirect resource to added value services that are currently aspired for but not in budget.
Inefficiencies in the back office operations impact on customer satisfaction and the overall customer experience. dhp experience has proven in previous clients that between 20% and 35% of all transaction volumes in a contact centre are the result of rework, delays, backlogs or execution issues.
Evolving Expectations
Traditional back-office operations need to transform from mere transaction processing functions. Future industry leading service providers will be decided by how they evolve their back office processes to become more intelligent and centred on customer efficiency, increasingly proactive and focused on continuous Improvement, enabling them to deliver a consistent value add service at a competitive cost on a sustainable basis.
dhp believes that the back office is the new front office and provides the battlefield for future competitive advantage
Back office optimisation software is extremely effective. However, there is an inherent danger that attention is focussed on driving improvement through technology alone. That objective is only relevant where there is no human involved in any customer interaction with your organisation. Until that time is reached, a key focus should always be on upskilling your management team to use the tools with the new behaviours required.
Importance of Upskilling Managers and Leaders
History shows that technology can be extremely effective in driving operational efficiencies. Benefits delivered by work management software are undeniable, but it’s your managers that drive efficiency and motivate your teams for high performance, with software as a key enabler.
Since your people are at the heart of your business and provide your critical customer interactions, it's important not to overlook them. While automation of particular tasks and processes is becoming more commonplace, complete automation is still many years away – and until that time is reached your employees are your most valuable company asset.
Service provider operations should not rely on technology alone to deliver improved operational efficiency. They need to balance investment in their front-line leadership team as highly engaged managers with the skills, ability and motivation to deliver at the heart of a customer centric performance strategy.
Why Effective Management is a key Requirement
In all operational areas, most staff will perform well if given the opportunity to do so. This relies on the team leader to create the conditions for successful performance just as much as on the ability and willingness of the staff member.
This is why, when it comes to making business decisions involving back office optimisation and work management tools, integration of the tools and management behaviours is where the real advantage is delivered. It’s not just about the technology but also how well it’s used. No system can manage members of staff, yet many let this happen, and are blind to the adverse impact. Focusing on the behaviours and skills of front-line managers and staff within service operations coupled with software insight is key to achieving sustained operational efficiency improvement.
For these reasons, to be able to deliver greater operational effectiveness and efficiency, organisations need to combine software with the right management practices. This will in many cases require a change in mindset.
Creating the Right Framework
Training front line managers to be consistently good at managing and then leading operations is the foundation for continuous benefit realisation. At divisional level, management method is critical. Teams perform best when they have a common language and a common approach, with consistent definitions of all key metrics, aligned to industry best practice for their basis of calculation.
Adopting the above, using common practices and principles and a transparent system will deliver greater understanding and control, unlocking an additional capacity benefit for the next investment programme.
With the foundations in place and initial benefits delivered, the Operations Director and middle management also profit from having greater understanding of the customer experience, insight of hidden process detail and risk/quality attributes, enabling more fact based decision making regarding investment led business process re-engineering strategies for continuous improvement
Focus on Empowerment
Experience repeatedly shows that success relies on the right balance being created between behaviour, skills and software. Achieving operational excellence requires a mix of both people and technology, with the ideal situation being a symbiotic relationship to drive tangible and sustainable operational changes.
Rather than undermining your managers with technology, make sure that you empower them with it. In order to do this, you should look carefully at your implementation partner. Are they just software providers or do they have a deep understanding of operations, extending to how and where software fits into the operational puzzle?
The correct solutions of systems, tools and methodology will not only improve customer experience and decrease failure demand, but also allow the operation to significantly reduce the cost base, which creates competitive advantage.
