Professional Documents
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Managing and Measuring For Value: The Case of Call Cent Re Performance
Managing and Measuring For Value: The Case of Call Cent Re Performance
Managing and Measuring For Value: The Case of Call Cent Re Performance
REFERENCES ................................................................30
BIOGRAPHIES..........................................................18...31
By Professor Daniel T Jones As an integral part of most organisations today call centres
Chairman, Lean Enterprise Academy play a key role in the service delivery chain. Value creation
is in the eye of the beholder, if organisations fail to
Co-author of the books The Machine that Changed the
deliver value to their customers, there will inevitably
World and Lean Thinking.
be a loss for stakeholders over the longer term.
Defining value correctly from the customer’s perspective is
Presently in many industries, call centres are the primary
the first principle of Lean Thinking. The second principle is
source of contact for customers. This important role
designing and managing the whole process for delivering implies that the performance management of call centres
this value backwards from the customer, rather than is of critical importance to organisations, especially the
forwards from the assets the provider is seeking to keep delivery of customer satisfaction.
busy. Most people have a hard time moving beyond
In this research the ways organisations measure and
eliminating waste from existing processes. However, this
manage customer satisfaction in call centres is explored.
pioneering research and case study demonstrates just
Clear evidence that current measures of performance in call
what can be achieved from being truly customer focused.
centres are often counter-productive to achieving customer
The real significance of this research and case study is satisfaction is revealed. Many call centres seem to
that companies start by understanding what the customer have fallen into the trap of believing that operational
is trying to achieve – customer purpose – rather than measures such as call duration are indicators of customer
customer satisfaction or even customer delight. Through satisfaction. Evidence indicates that they are not; they are
an informed dialogue with customers, it is possible not only only measures of efficiency, which in turn is seen as
to enhance value but also to eliminate the need and cost determinant of financial performance. Most call centres seem
of unnecessary interactions due to failures of the delivery to miss the important link between employee satisfaction,
process or in the system or product design. This sets in service quality, customer satisfaction, and profitability.
motion a virtuous circle from which both the customer and In 12 case studies of world-leading call centres, the
the provider continue to gain all the time. research identifies various managerial implications to avoid
It also shows the way forward in creating more rewarding the "efficiency trap" in measuring and managing call centre
performance. The managerial implications of this research
work in call centres – modern-day information
are as follows:
factories. With the different approaches outlined in this
report, work becomes much more purposeful, creative and ● Call centre performance is increasingly important for
meaningful – so people stay and grow, rather than quit as delivering customer service. Call centre performance
soon as they can - a win-win also for employees. A deep should not be measured in isolation from the performance
understanding of customer purpose also comes from of the whole organisation. In most cases they are not
sharing a context with the customer. This in turn is the detached operations with a solitary goal of driving down
foundation for innovative service redesign. costs. Call centres are an integral part of an organisations
value chain delivering its services and products. Therefore,
the performance measures of call centres need to reflect the
strategic direction of the entire organisation.
interactions: employee satisfaction, service quality, Call centres are an integral part of most industries today.
customer satisfaction, and satisfaction of other They play an essential role in today’s business world and
stakeholders (e.g. financial performance) with particular are often the primary source of contact for customers [31].
emphasis on the intangible performance drivers. The call centre industry has experienced incredible growth
on both sides of the Atlantic, which is set to continue [14].
● Customer dialogue is important and call centres are in
According to Reuters the Western European call centre
fact listening to and speaking with customers all the
market as a whole is expected to grow by 12% annually
time. Measuring customer satisfaction should start
[37]. In European countries such as the UK more
with understanding customers. Communication is
employees work in call centres than in many traditional
often very task orientated, whereas call centres need
fields and recent figures estimated that in 2001 2.2 percent
to recognise the importance of listening to the
of the UK population were working in call centres. One
customers in order to:
study states [31, p351]:
- understand their needs and requirements from
"Call centres are changing the way companies
their perspective
communicate with customers and are a strategic asset in
- detect failures, bottle necks, or improvement delivering exceptional service quality. Companies that
potential focus on customer loyalty are increasingly using their
- deliver service that satisfies the customer. centres to differentiate their product or service offering and
drive customer satisfaction".
● It is critical to understand and classify the nature of
demand. Often calls are unwanted or even unwittingly The management of performance and customer
generated by other parts of the organisation. By analysing satisfaction in call centres is therefore a critical part of
and classifying demand, it becomes more manageable most organisations. Based on an extensive literature
and more predictable. Unwanted calls could then be search, what call centres are and how they manage
reduced or even eliminated. performance will be explored. Then the way call centres
measure their performance addressing the dominant
Overall, a strategy-driven and integrated approach towards
efficiency measures as well as measures for customer
performance measurement in call centres will, therefore,
satisfaction, service quality and employee satisfaction
improve operational efficiency and contribute to continuous
will be discussed.
innovation of the organisation as a whole.
The way in which the case studies with the twelve leading
call centres were conducted will be described.
Acknowledgements: Subsequent sections will report the findings of how these
The research report summarises the work conducted by organisations measure their performance.
the Centre for Business Performance at Cranfield School The operational efficiency measures, customer satisfaction
of Management. I would like to thank DHL who, as a partner measures, service quality measures and employee satisifaction
of the Cranfield Performance Measurement Best Practice measures are seperated. The general measurement systems
Roundtable, have sponsored the work into call centre of the case study firms will be examined leading to a discussion
performance measurement. Furthermore, I would like to on the findings and drawing up the managerial implications.
acknowledge the valuable input of my colleagues at
Cranfield School of Management, especially Mike Bourne,
Bruce Clark, Monica Franco, Mike Kennerley, Andy Neely,
Mark Wilcox, and Alan Meekings. Finally, I would like to
thank all call centre managers who participated in this
research and Fujitsu for their efforts in printing and marketing
this report. A Special thank you to Stephen Parry from Fujitsu.
According to the Call Centre Association a call centre is a then be combined into any kind of job [14].
physical or virtual operation within an organisation in which Performance systems used at that time reflected this view
a managed group of people spend most of their time doing with a focus on operational efficiency. The stopwatch was the
business by telephone, usually working in a computer- critical tool of that time. This management approach was later
automated environment. However, it seems that the nature criticised as inhumane, and it was not long until people like
of call centres is rapidly changing, with Customer the French management thinker Henri Fayol recognised
Relationship Management (CRM) being the hot topic in call that the esprit de corps is a vital factor for the success of
centres today, entailing strong investments in technology for organisations, contrasting Taylor’s view that any
loyalty and growth [38]. According to other researchers, call identification with fellow workers was a distraction rather
centres allow a company to build, maintain, and manage than a motivation. The evolution of business performance
customer relationships by solving problems and resolving management continued with the recognition that aspects
complaints quickly, having information, answering questions, other than efficiency and financial output contribute to
and being available usually 24-hours a day, 7 days a the overall performance of organisations.
week, 365 days of the year [32]. It is argued that call centres The financial bias needed to be balanced against
can form the heart of successful customer-relationship performance criteria such as stakeholder satisfaction,
management strategies [32]. including customers and employees, quality, know-how,
and intellectual property. This resulted in the development
There is increasing evidence that call centres are gradually
of various performance management and measurement
migrating into customer contact centres [2]. Customer
tools including the Balanced Scorecard [28], the Skandia
contact centres handle all relationships with the customer
Navigator [18], the Knowledge Asset Map [30], and the
and utilise multiple channels integrating traditional channels
Performance Prism [33] to name just a few.
of telephone and fax, with newer technologies such as
e-mail, SMS, and Internet. According to Reuters, a contact When looking at the way many call centres measure and
centre is an operational group within a business which is manage their performance today, it is easy to forget that
concerned with the development of customer relationships, the world has moved on from Taylorism and scientific
using integrated technology solutions and business management of mass production organisations.
processes [37]. It is argued that today’s call centres are Sometimes referred to as the "sweatshops of the Western
complex operations that require a combination of technology, world" or "new dark satanic mills," call centre performance
process, and human talent in order to succeed [31]. measures are dominated by stopwatches and measures,
such as time to answer a call and call duration. Some
However, it seems that the human aspect is often ignored
scholars maintain that call centres are very competent in
in today’s call centres. Evidence in the literature suggests
capturing information about efficiency, but they pay little
that performance management in call centre environments
attention to the qualitative employee characteristics that
missed the evolution seen in the field of general business
create value for the organisations and its customers [42].
performance management since the beginning of the 20th
The authors continue to argue that call centre agents
century right through until today. This evolution can be
would normally be assessed in terms of ‘number of calls
described as one from the machine age to the information
taken’, ‘ability to answer the customer query’, or ‘number
age, or from scientific management to the management of
of productive hours against the number of hours worked', in
today’s complex and global knowledge economy [14].
other words in terms of their productive value and
This evolution started with Frederick Winslow Taylor, who efficiency. The problem with these measures of productivity
was later much criticised for his view that there was one and efficiency is that they are of little worth when it comes
single best way to fulfill a particular task. According to to measuring value [42]. Researchers from Maastricht
Taylor, it was only a matter of matching people to a task University state that, in order to manage well, managers in
and then supervising, rewarding and punishing them in call centres, "need to ensure that the measurements
accordance with thier performance. In Taylor’s view, there accurately portray what management wants to be
was no such thing as skill and all work could be analysed measured. The effective management of high quality
step-by-step as a series of unskilled operations that could voice-to-voice service delivery could be adversely affected
by the absence of a valid measurement instrument."
According to Professor Neely and his colleagues, ● Average talk time (total time caller was connected to
performance measurement can be defined ‘as the process telephone service representative)
of quantifying the efficiency and effectiveness of past
● Adherence (are agents in their seats as scheduled?)
action.’ [33]. Call centres typically produce many
measures of performance, sometimes numbering in ● Average work time after call (time needed to finish
hundreds [31]. Alan Miciak of Calgary University and Mike paper work, do research after the call itself has
Desmarais of the Service Quality Measurement Group been completed)
maintain that the majority of measures are operational ● Percentage of calls blocked (percentage of callers
efficiency measures and have to do with telephone who receive a busy signal and could not even get
technology (e.g. average talk time, abandon rates, etc.) in in to the queue)
use and adherence of employee standards of practice
(e.g. occupancy rates, calls per hour, etc.) [31]. Audrey ● Time before abandoning (average time caller held on
Gilmore and Lesley Moreland identify the following before giving up in queue)
measures which were all reported on wall displays in ● Inbound calls per TSR eight-hour shift
various call centres [22].
● TSR turnover (the number of telephone service
● Number of calls answered within past ten minutes representatives who left in a period of time
● Calls waiting to be answered, that is ‘in the queue’ usually annually)
● Number of agents waiting to take calls (free agents) ● Service levels (calls answered in less than x seconds
divided by number of total calls).
● Number of ‘not ready’ agents
Richard Feinberg and his colleagues claim that the
● Number of agents on outgoing calls or on a call to importance of these measures is confirmed in other
another agent. leading publications on call centre management
It was identified that agents paid close attention to the [41][19]. From the experience of Miciak and
display and that they would only go for a break if the Desmarais, organisations rarely measure customer
displayed call situation would allow it. satisfaction with call centre experience measures,
such as the ones stated above [31]. Researchers
There is little evidence in the literature about performance
empirically tested the 13 ‘critical operational
measures in call centre environments. However, research
determinants’ of call centre excellence by using data
indicates that call centre manuals provide some guidance
from 514 call centres [19]. Their data shows that only
about common measures of call centre excellence [43].
two of the 13 operational determinants, namely
Jon Anton of the Prudence University in Indiana claims
‘percentage of calls closed in first contact’ and
that the following measures help to track quality of call
‘average abandonment’, have any statistically
centre service [19]:
significant, albeit weak, influence on caller satisfaction.
● ASA (average speed of answer) One explanation for this is that technology in call
centres enables them to easily track operational
● Queue time (amount of time caller is in the line
measures and that "we make important what we can
for answer)
measure" [19]. This assumption is supported by
● Percentage of callers who have satisfactory resolution additional research which shows that ease of
on the first call measurement leads to automatic reporting, which in
● Abandonment rate (the percentage of callers who hang turn, can lead to the deceptive belief that the reported
up or disconnect prior to answer) measures are important and motivating [40].
Call centre performance is critical to the image of an needs and expectations in call centre environments. Jon
organisation [7]. A study conducted by Purdue Anton of Purdue University in Indiana has identified four
University found that 92% of US customers form their basic reasons why customers desire to contact an
image of a company based on their experience using the organisation [3]:
company’s call centre. Furthermore, the study reports that
● The customer has a question and needs an answer in
based on a negative call centre experience, 63% of
order to proceed, i.e. "Where do I buy your product?",
consumers even discontinue using a company’s products.
"What is the price?", etc.
This number even rises to 100% for consumers between
the ages of 18 and 25 [16]. Gilmore and Moreland state that ● The customer wants the company to do something, i.e.
in most service situations both customers and service "Change my address", "Send me a manual", "Take my
employees’ expectations are rising; therefore, all participants order for a new product", etc.
have higher expectations of levels of service delivery [22]. ● The customer has a problem with the product and
There is an obvious link between efficiency and needs assistance and guidance in resolving the issue,
performance, which is addressed by measuring the i.e. technical support, help desk etc.
operational efficiency measures. Besides operational ● The customer is emotionally upset with the product, and
performance measures, the literature provides clear wants to know that the company will set the situation
evidence of other aspects that impact performance straight, i.e. complaint resolution and anger diffusion.
but are rarely addressed in call centre performance
measurement systems. These are primarily links Researchers from the Netherlands identified the following 13
between the following concepts: call centre customer expectations of staff [10] using the work
of research previously published by scholars in this field [4]
● Customer satisfaction and both profitability and loyalty [47] [6] [8] [23] [34] [46]:
● Service quality and customer satisfaction [25] ● Self-efficacy – employees’ belief that he/she is
● Employee satisfaction and service quality [39] competent to execute the required activities related to
the job
This chain of cause and effect has been described as the
Service Profit Chain [25], or later, as the Value Profit ● Adaptability – ability to adjust behavior and handle
Chain [26], while others call it the Employee-Customer interpersonal situations
Profit Chain [39]. In the subsequent part of this section ● Empathy – ability to show individualised attention and
each of the concepts and their relationship in the call personal involvement
centre context will be defined and discussed.
● Time – speed with which the customer requests are
Customer satisfaction solved
Today’s call centre customers want better service. They ● Communication style – ability to address customers’
want to be treated better, have easier ways of accessing service needs and adjust the language for different
services, with timely responses [11]. Some scholars define customers
customer satisfaction as an evaluation of product or ● Reliability – ability to deliver on promises in a
service in terms of whether that product or service has met dependable and accurate way
their needs and expectations [47]. Others confirm this view
by defining satisfaction as the result of a customer’s ● Perception of commitment to service quality and
assessment of a service based on a comparison of their customer satisfaction – commitment of the
perception of service delivery with their prior expectations. employee as perceived by the customer to provide
In this context it is important to understand customer maximum service quality
Using an empirical multiple case study approach [45], The following section summarises the findings of how the
the aim of this research was to identify how leading case study call centres measured their performance in
call centres measure and manage their business each of these four areas: operational efficiency, customer
performance. The way call centres track customer satisfaction, service quality, employee satisfaction, as well
satisfaction and customer value were at the centre as the overall approach they used.
of this research.
● Knowledge of employee
Customer satisfaction
● Competence in performing the task
All 12 case study firms measured customer satisfaction
to various degrees and agreed that customer satisfaction ● Close
is the key objective of their work. Most firms would use
One manager said: "We try to understand the customer
customer satisfaction surveys, which were sent out to a
expectation from their view. It is so easy to fall into the trap
sample of customers. The frequency varied between
of measuring service quality from our own viewpoint, just
quarterly and annually for larger customer surveys. Over
looking at our core business". Another manager made it
half of the sample firms measured customer satisfaction
clear that service quality does not necessarily mean
more frequently using customer interviews and small
customer satisfaction: "Sometimes we meet all our SLA’s
sample surveys.
but customers are still unhappy. It can be a matter of
Two firms in the sample used automated survey providing a great service which no-one wants".
technology. After the call between the call centre employee
and the customer is finished, an automated message Employee satisfaction
questions the customer about the level of satisfaction
All case study firms measured employee satisfaction,
with the call, which the customer answers by pressing
although the reasons for doing so were different. Three
buttons on his/her phone. This allows continuous and
firms stated that the reason for measuring employee
direct feedback for the call centres and can be
satisfaction was to control staff turnover, as this is a major
communicated to other parts of the organisation such as
issue in many call centres. The other 9 correlated
marketing or sales.
employee satisfaction to various parts of their performance
approach is to understand the added value from a The leading call centres in the case study sample are
customer perspective. In an ongoing dialogue the still heavily biased towards operational efficiency
performance requirements of the customer emerge measures, as suggested in the literature (e.g. [5]
which then become performance targets for the call [21] [31]). Nevertheless, the fact that most of the
centre. The performance manager adds: "Our frontline firms used a scorecard approach in order to balance
employees now listen to the customer and understand the efficiency bias seems to suggest that they
the issues; by also understanding the whole service recognise the link between employee satisfaction,
delivery process, and not just their own functional operational performance, customer satisfaction, and
space, they are our source of innovation." In this way financial performance, as suggested in the literature
employees are more engaged, analyse and interpret (e.g. [25] [26] [39]). This is also supported by the
customer needs, and help continuously to innovate and fact that five firms used visual maps to demonstrate
improve the service the company delivers as a whole. cause-and-effect relationships between various
Even though the implementation of the new aspects of performance.
measurement system was not easy: "Some managers
This research confirms the proposition that call
were against our new measurement system because
centres need a stronger focus on measuring their
they felt they would lose control. Before they could
intangible value drivers, as suggested by various
more directly impact and deliver their targets, now they
researchers (e.g. [5] [21] [42]). The case study firms
have to work as a company". The implementation was
demonstrated that they believe employee satisfaction
a big success and all performance aspects were
and customer satisfaction drive call centre
positively affected: operating costs decreased,
performance. Measures which Gilmore and Moreland
customer satisfaction rose, and employee satisfaction
classify as ‘intangible dimensions of call centre
rose, which resulted in a reduction of staff turnover
performance’, such as responsiveness or empathy,
from 40% to just 8% today.
were used by the case study firms as measures of
customer service [22].
The literature review suggests four separate but The managerial implications of this research are as
interrelated areas of performance for call centres, follows:
namely: operational efficiency, customer satisfaction,
● Call centre performance is an increasingly important
service quality, and employee satisfaction. The case
factor for delivering customer service. Call centre
studies support three of these areas as separate
performance should not be measured in isolation from
performance perspectives; however, service quality is
the performance of the organisation as a whole. In most
not seen as a separate perspective. There seems to
cases they are not detached operations with a solitary goal
be confusion about what service quality is. Some
of driving down costs. Call centres are an integral part of an
organisations equate it to customer satisfaction,
organisation and its services or products. Therefore, the
whereas others equate it to operational performance.
performance measures of call centres need to reflect the
Only one of the case study firms measured service
strategic direction of the entire organisation.
quality as an end-to-end service provision. In all other
cases it was measured as part of operational ● A more balanced approach to measuring performance
efficiency or customer satisfaction. This implies that based on strategic objectives is valuable, especially if
call centres are often seen as disconnected visual representations of service delivery and value
operational units with its own performance creation are used. This enables easy communication of
measurement system detached from other strategic overall performance and puts efficiency targets in
goals of the organisation. Rowley and his colleagues perspective. Best practice seems to be to track the
support this by stating that any customer value following areas of performance as well as their
proposition should be based on the business vision or interactions: employee satisfaction, service quality,
business model of the enterprise as a whole [38]. customer satisfaction, and satisfaction of other
stakeholders (e.g. financial performance) with particular
emphasis on the intangible performance drivers.
Call centres are critical parts of the service delivery chain Literature and Further Reading
of organisations and as such need to be seen as an
integral part of overall business performance. The 1. ACA (1998) Call Centre Hang-ups: The Call Centre
literature suggested a strong bias towards operational Agent Report – The Impact on Profit and
efficiency focus in call centre performance management Productivity, July.
systems. However, there was no single piece in the 2. Acey, John (2002) Is your call centre predictive?,
literature that attempted to bring together existing research Management Services, Feb, pp 20-21
in order to provide guidance of how to measure and
3. Anton, J. (2000) The past, present and future of customer
manage call centre performance. This project brought
access centres, International Journal of Service Industry
together current research on call centre performance
Management, Vol 11 No 2, pp 120-130.
measurements with a focus on measuring customer
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with 12 leading call centres in order to extract managerial (1998) Customer contact and the evaluation of
implications of how to manage and measure customer service experiences: Propositions and implications
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improving a performance measurement system that Marketing, Vol 15 No 8
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5. Bennington, L. and Cummane, J. (1998) Customer
the operational efficiency trap were derived. This will help
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organisations to move away from a Tayloristic view of
EIASM 8th Workshop on Quality Management in
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Bernard Marr M.Sc. (Econ) M.Eng. (Dipl. Wirt.-Ing.) Ing. Ass. Software Evaluation, Intellectual Capital, measuring e-
business performance, and Knowledge Assets.
Bernard Marr is a Research Fellow in the Centre for
Business Performance at Cranfield School of For more information please mail: bernard.marr@cranfield.ac.uk
Management and a Visiting Professor at the University of http://www.som.cranfield.ac.uk/som/cbp/bwm.htm
Basilicata, Italy. Prior to joining Cranfield in 1999 he held
a research position at the Judge Institute of Management
Studies at Cambridge University. Bernard’s major Professor Andy Neely PhD, MA, Ba
research interests revolve around managing and Professor Andy Neely is the Associate Director of
measuring business performance. His research focuses AIM, the Advanced Institute for Management, and
on balanced scorecards, strategy maps, intellectual Chairman of the Centre for Business Performance at
capital, intangible assets, and performance management Cranfield School of Management. Previously he has
software applications. held appointments at Cambridge University, where he
Bernard is a leading thinker in the field of intangible value was a Fellow of Churchill College, Nottingham
driver management and is recognised as one of the University, where he completed his PhD and British
world’s authorities on performance management and its Aerospace.
software applications. He has published widely in this Andy has been researching, teaching and consulting
area and is the co-author of the books "Weighing the in the field of business performance measurement
Options: BSC Software" and "Automating your and management since the late 1980s and chairs the
Scorecard", both jointly published with Gartner. PMA, an international network for those interested in
Bernard works with leading organisations and thought the performance measurement and management. He
leaders in the field to develop approaches and has authored over 100 books and articles, including
frameworks to measure and manage their intellectual "Measuring Business Performance", published by the
capital and intangible assets, and identifies how those Economist and "The Performance Prism", published
intangibles contribute to the overall value creation of the by the Financial Times.
organisation. Bernard is chairman of the international He sits on the UK Government's Performance
PMA Intellectual Capital Group, Intangible Assets Editor Information Panel and is widely recognised as one of
of the journal Measuring Business Excellence, and the world's leading authorities on performance
member of the editorial board of the Journal of measurement. He brings a wealth of practical
Intellectual Capital and the International Journal of experience to his teaching and research, derived from
Learning and Intellectual Capital. his experiences as a consultant to numerous global
Bernard has worked with international Organisations organisations, including 3M, Accenture, Aventis,
such as Accenture, Astra Zeneca, DHL, Gartner, and British Aerospace, British Airways, British Telecom,
Shell International and has teaching and consultancy DHL, Diageo, Hogg Robinson, KPMG, Morgan
experience across Europe, the United States, South Stanley, NatWest, Pilkington, Posten, Reckitt and
Africa, the Middle East and China. He is a regular Colman, Rolls Royce Aerospace, Schering, T&N and
keynote speaker at international conferences, holds Wolseley Centres.
various visiting lecturer positions across Europe, and has He specialises particularly in the design and
produced thought-leadership white papers on current implementation of performance measurement systems -
subjects such as Balanced Scorecard, Strategy Maps, including balanced scorecards - designed to bring about
Performance Measurement, Measuring Intangible Assets, real and lasting change in organisations.
Fujitsu Services is one of the leading IT services much as 40% to 90% of service demand. This level of
companies in Europe, Middle East and Africa. It has an demand waste is unnecessary, yet unavoidable under
annual turnover of £2.4 billion (€3.9 billion), employs existing mass production system constraints.
15,400 people and operates in over 30 countries. It Research and experience indicates that customer
designs, builds and operates IT systems and services for requests are generally generated from:
customers in the financial services, telecommunications,
retail, utilities and government markets. Its core strength 1. Inquiries about products or services.
is the delivery of IT infrastructure management and 2. Purchases of products or services.
outsourcing across desktop, networking and data centre
3. Defects in products or services.
environments, together with a full range of related
services, from infrastructure consulting through 4. Failure to deliver products or services correctly.
integration and deployment.
5. Performance of products or services is to specification
but is unsatisfactory to the customer.
Summary
Sense and Respond facilitates determining what ‘value’
Sense and Respond is a new customer-centric means to the customer. It achieves this by understanding
performance management approach that has been ‘customer-purpose’ -- why customers use a company’s
implemented at Fujitsu. It places responsibility for customer goods and services. In the book Lean Thinking, Womack
demand at the centre of the operation. This pivotal practice and Jones (1996) ask why organisations have such
identifies the causes of cost within a business and then difficulty defining value. Their response to this is, ‘Partly
eliminates them. By applying this new performance because most producers want to make [and service]
management system, service levels are greatly improved as what they are already making and partly because many
are customer and employee satisfaction. customers only know how to ask for some variant of what
At Fujitsu, Sense and Respond combines elements of they are already getting’ (31). It is important to
‘Systems Thinking’, ‘Lean Service’, and ‘Transformational emphasise that without understanding customer purpose,
Leadership’ to produce an approach that engages front- any discussion about customer value is futile.
line staff and delivers excellent results for customers. It is Fujitsu, like many conventional organisations today,
interesting to note that no new technologies are required, measured customer satisfaction only against its own
rather existing ones have been used to greater effect. measures and benchmarks. In effect, organisations often
Traditional businesses designed on mass-production measure against services that they are confident they
doctrines are content when targets are being met and, can perform well against. Therefore, it is commonplace for
therefore, may not be aware of the poor service being the true opinion of customers to be absent, with resultant
delivered and the resulting customer attrition rates. The loss of innovation, improvement and customer loyalty.
dwindling customer base and lack of contract renewals is With the new approach, Fujitsu places the customer
often attributed to natural wastage, and as long as this as the most important part of the service process. It
does not exceed a prescribed level, it is generally also recognises that true customer-knowledge
acceptable. As a result, businesses need to generate (understanding what customers want and need)
new customers, which is more costly than maintaining resides with front-line staff, as it is they who have the
the existing, loyal customer base. most contact with customers.
Fujitsu discovered that a large proportion of calls into the By accessing this intelligence, Fujitsu is capable of
organisation were preventable, often accounting for as measuring service failures as deemed by the customer,
The central theme of the Sense and Respond approach In 1999 there was a growing realisation at Fujitsu that
at Fujitsu is to use the intelligence of customer-facing the traditional approach to service was failing both
staff to understand the customer environment along with clients and customers alike. Operating in the IT
‘customer purpose’ and turn that knowledge into a outsourcing sector, Fujitsu found it almost impossible
measuring system against which all services, products to differentiate itself in a very aggressive marketplace.
and operational performance is judged. Sense and
Functional focus resulted in a lack of cohesion and
Respond created an opportunity for a complete re-design
fragmentation. Many client accounts were operating at
of the operation and a change in the way that Fujitsu
contractual obligation and no higher, while 15% were
views and relates to its customers. Instrumental in
at critical levels of dissatisfaction and were unlikely to
creating this change was the new measuring system.
be renewed. Furthermore, the turnover of front-line
Fujitsu believes that customer focus and understanding is call centre staff was 42%.
lost when resource measures, such as ‘calls per-man
Fujitsu found that 40% to 90% of incoming service
per-day’, ‘average call-handling time’ or ‘first- time
requests were entirely preventable. This highlighted
fix’, are turned into targets for front-line staff. They go
where Fujitsu was incurring unnecessary costs, and
as far as saying that applying resource targets to
more importantly, where it was not meeting the needs
front-line service staff is counterproductive. It is
of clients and customers. The message was stark for
Fujitsu’s belief that using resource measures as
Fujitsu. It had to look at what was creating value for
indicators of personal performance will take a toll on
customers, what was not, and then stop doing what
front-line staff. Front-line staff intuitively know they
was not creating value. It became clear that if it could
are only meeting internal targets and not serving the
identify the causes of institutional waste and remove
customer and in many cases, they manipulate the
them at the source, it could gradually decrease the
work in order to survive the measuring regime.
time spent on waste demand and increase the time
This can lead to 'the assembly line of the mind’
spent on value creation for the customer.
syndrome where staff disengage from the customer
and concentrate on meeting volume-based targets. This was an opportunity not only to re-design the
organisation but also to change the way Fujitsu
worked with its customers and even change the
service offerings. It was clear that customer
satisfaction was a given. Customer success, however,
became the new goal.
Front-line staff ultimately own the measurement ● Staff attrition decreased from 42% to 8%.
system, so they drive the rest of the organisation.
● Operating costs reduced by 20%.
Womack, Jones and Roos, authors of The Machine
that Changed the World (1990), agree with the ● Contract renewal and service upgrades amounting
importance of staff and assert: to £200m.
‘If employees are to prosper in this environment, Roles within the call centre are constantly changing in
companies must offer them a continuing variety of response to the proactive actions of the people within
challenges. That way, they will feel they are honing it. This creates a dynamic culture, and feedback from
their skills and are valued for the many kinds of advisors revealed that they are highly motivated and
expertise they have attained.’ (15) proud to be part of an innovative and creative
organisation. Staff were asked what difference the
Managers become part of the support network to
new way of working made to them. Some of their
front-line staff in order to release the energy and
comments are as follows:
potential of the whole organisation. Front-line staff
begin to perform the kind of higher-level tasks that ● It [Sense and Respond] provided a total shift in my
were previously thought to be totally beyond the way of thinking, getting into the customer’s business
scope of the average helpdesk employee. and absorbing it. Putting the customer’s needs first,
every time. Getting rid of the waste and concentrating
Advisors have the freedom to choose how to solve a
on delivering what matters.
problem and meet customer needs. As a result,
issues that do reach advisors are more substantial. ● It [Sense and Respond] has allowed me to approach
Therefore, advisors have a chance to solve more things from a different angle, look at the facts and
challenging problems and gain greater satisfaction. disregard opinions and stories.
They are rewarded for how much knowledge they ● I now have the courage to stand up and present data
create, not the number of calls they handle. and facts to show reality and to be committed to
Fujitsu also supply IT help desk services to their own providing opportunities for others.
employees. It has removed as much as 60% of the ● I have become much calmer. I can see the impact I
incoming demand, reduced service operating costs by can make without all the noise and drama.
64%, improved advisor productivity by 45%, reduced
end-to-end cycle time by 70%, and employee ● It [Sense and Respond] has given me a much broader
satisfaction has increased by 30%. perspective and a new focus. I now see happy
customers. I can now see what will make them happy.
Fujitsu Services is now able to offer many clients I am to learning what matters to my customers.
reduced annual costs because it is confident about
removing demand. This approach has positively ● I discovered a new way of thinking for myself and
impacted customer and client satisfaction, employee about the role I perform and that using relevant data
satisfaction and operating costs. can assist in changing people’s attitudes.
With Sense and Respond, Fujitsu Services has had At Fujitsu, removing preventable service calls at the
the following results: source has not resulted in the reduction of staff, quite
the opposite; customers have responded by
● Customer satisfaction increased by 28%. outsourcing more work to Fujitsu because they see
● Employee satisfaction increased by 40%. the real value in doing so. There have been no layoffs
as a result of introducing this approach.
Sense and Respond organisations establish exactly the institutionalises ‘corporate waste’. This situation is
products and services the customer wants and sets exacerbated when organisations automate or send
about delivering specifically to customer ‘pull’ when they corporate waste off-shore, creating even more frustration
need it. The Sense and Respond performance for the customer. This may also explain why many
management approach is a systematic, controlled companies do not see the expected returns on their
approach to re-routing the corporate plumbing (also investments in Customer-Relationship-Management
known as ‘the system’) of processes, technology, technologies.
reporting, job design, products and services in order to
meet the needs of customers. All end-to-end processes Creating Value
are designed to be a natural reflection of customer needs
Value-creation is provided in response to customers’
and remain fluid, mirroring customer demand.
requests for service where nothing is actually broken or
wrong. For example, customers may ask questions like,
Understanding why customers call ‘May I have more information?’, ‘Can you tell me how to
Understanding the customer context in which products get more out of my product or service?’, or ‘Which
and services are used provides the organisation with product is better?’
information as to ‘Why’ the customer transacts, whereas
A critical measure for any company is the ratio between
most reporting systems fail to record this information and
Value-Creation and Value-Restoration. Understanding
only capture ‘How’ the organisation transacts.
how well the organisation creates value – or not, reveals
Understanding the real needs of customers and the
genuine operational capability and provides insights to
multiple uses they make of company products and
improvement. Changing the nature of demand from
services provides a rich source of information against
Value-Restoration to Value-Creation creates more
which to design new offerings. In addition, it provides
meaningful work for employees, while creating more
performance data against which to make improvements.
profitable business for the organisation.
Armed with this knowledge, action can be taken to Changing the corporate culture
reshape, in a customer relevant way, the targets,
Culture change using the Sense and Respond
rewards, resources, and co-ordination of all functions
approach happens in weeks and months, not years
around a common set of objectives. This ultimately
and decades. Creating an enterprise focussed on
transforms the corporate culture.
customers is the key to corporate success going
Removing unnecessary work through the insights and forward. While many organisations recognise this fact,
effort of front-line staff frees up time, which can be filled very few are able to move fast enough because of
with higher-level tasks, usually performed by senior level their ingrained systems and processes. Sense and
staff further down the value stream. Alternatively, the Respond assists in overcoming these problems and
organisation can serve more customers at no additional releases businesses from the shackles of standard
cost or headcount, providing the company with significant practices and existing thinking. The spiralling cost of
productivity gains. client and customer acquisition makes this type of
approach a cost-effective option. Customer-centricity
When introducing this new perspective, understanding
is the Holy Grail for today’s successful businesses;
what matters to customers is paramount. Turning
therefore, every decision needs to be measured in
customer-purpose information into a new measuring
terms of customer value creation.
system to drive and monitor the end-to-end
organisational performance is essential.
Sense and Respond is not a set of tools to be selected Gharajedaghi, Jamshid. Systems Thinking: Managing
from when particular business issues arise. It is not a set Chaos and Complexity: A platform for designing
of procedures or quick fix techniques; rather it is a business architecture.
philosophy that has created a: Butterworth-Heinemann: Boston, 1999.
● new management approach. Womack, James P. and Daniel T. Jones. Lean thinking:
Banish waste and create wealth in your organisation.
● set of principles.
Simon and Schuster: New York, 1996.
● complete logic.
Womack, James P., Daniel T. Jones and Daniel Roos.
This is supported and underpinned with a/an: The Machine that Changed the World.
● holistic, scaleable, enterprise value Simon and Schuster: New York, 1990.
management framework.
Contact details:
Stephen Parry
Head of Strategy and Change
Customer Services
Fujitsu
Phone: 07867 83 13 12
Email: Steve.Parry@Services.Fujitsu.com