Reasons for change
A number of factors pushed Capita to improve the performance of their operation:
Managing change: New contractual terms required Capita Multi-Client to deliver the same quality of service at the same cost, while shortening service levels from 5 to 3 days. As Mark Randall, MD for Capita Multi-Client, explains: “We needed to deliver better service, with the same number of people. Therefore, productivity became a key factor in the new contract.” In this context, the challenge was to implement a controlled transition to operational practices that would enable the operation to work with tighter service levels, and to do so within an ambitious timescale.
Cost reduction: Capita already ran a cost-effective Business Process Outsourcing (BPO) operation, but their clients were becoming increasingly demanding. “Cost is always important, but nowadays it is important to deliver service improvement. Most clients also want to have a ‘step up’ in the service delivered,” explains Mark Randall.
Strategic flexibility: Capita manage a variety of services through their operation. As client requirements change and work volumes shift, they need to be flexible with their resources to meet changing demands and build the capability to manage future challenges. In order to control and best use this flexibility, Capita prioritised the development of the current operations management approach and the need for “a shared solution across accounts”.
How did AOM help?
The AOM approach enabled Capita to plan, control and deliver their services with new certainty, and exploit opportunities as they arose (e.g. reducing regulatory risk by cross-training staff in critical specialisms, and training staff for work with new clients as workloads changed).
During the AOM implementation, particular attention was given to productivity. As Mark Randall notes: “It’s not about throwing more staff at the issue in order to achieve the service levels and avoid fines. Nor is it about reducing quality. What we have done is get a better understanding of team and individual performance through our implementation of AOM. We have thereby driven—and continue to drive—performance improvements.” The cost of the AOM implementation across Capita Multi-Client was recouped not in the anticipated first twelve months, but in seven.
As well as the productivity gains, ActiveOps continually provides the senior management team with the necessary method and visibility of workloads and capacity to better balance work and resources across teams. Moreover, as Linda Pegler, Customer Services Manager, notes: “The consistency of performance measurement means we are comparing apples with apples, which is an absolute necessity when peoples’ pay is based on their performance.” “Identifying which areas of the operation were meeting productivity best practices was a challenge and required a lot of manual counting, but AOM provided one version of the truth based on consistent measurement and reporting,” adds Mark Randall.
Careful management of change was crucial to guaranteeing staff and management engagement. When asked how his people reacted to AOM, Mark says: “It’s great for the staff on the floor because it makes their life a bit less stressful. We can be more specific now with staff and clients, and have a degree of certainty about when things can happen, which is so much better than a ‘best endeavours’ approach!”
Key benefits for Capita
In summary, some of the long-term, sustainable achievements most valued by Capita include:
Shorter service levels
Due to improved medium-term planning and increased eefficiency when balancing work and resources, Capita reduced service levels from 5 to 3 days, while maintaining their profit margin
Individual performance management
AOM has provided accurate data about individuals, which has given team leaders the confidence to manage individual performance on a daily basis. In addition, improved communication with teams about their progress towards their planned outcomes and the use of visual controls mean that staff feel more informed and involved with their performance and the expectations of the business. “Nobody wants to be below where they should be,” says Mark Randall, “but staff need to have a clear idea of where they stand. Thanks to the increased transparency provided by AOM, staff know what is expected of them and what they can achieve.
A reduction in overtime through improved productivity
The introduction of the AOM planning cycle clearly identified the gaps between work and resources, which enabled cross-training of staff to take place when there were surplus resources. This addressed the issue of limited flexibility and enabled the delivery of service at a lower cost base through a 10% improvement in productivity and removing dependence on overtime for a few skilled individuals (overall, overtime was reduced by 50%).