24 Jul SERCO/SDG Virtual Working Case Study
Shop Direct Group is the UK’s leading online and home shopping retailer, with fantastic brands such as Littlewoods, Very and isme. They have around five million customers, handle over 19 million calls and process orders for 53 million items per year driving turnover of £1.7BN.
Serco is a global BPO business and a leading provider of managed and Business Process Outsourcing (BPO) services to public and private sector organisations around the world. Serco pride them selves on having the vision, agility and determination to deliver cutting-edge business process solutions and set ever-higher standards in the markets they serve. Building on 50 years’ experience in delivering front line services, they have combined all Serco’s middle and back office capabilities to create a new global BPO business. Today, they specialise in business processing and their customer contact service centres are home to a unique spectrum of end-to-end solutions.
Arise Virtual Solutions is the world’s leading provider of virtual business processes via its virtual working model, delivering services through 26,000 work at home agents in 4 countries to support many of the world’s most well known brands.
THE BUSINESS CHALLENGE
In 2005, it became apparent that a new vision and strategy was needed to bring the business up to date with the emerging trend in the British retail sector, i.e. to create a compelling consumer proposition online and greatly improve the customer’s ability to self serve. At that point, only 18% of trade took place via the web, with the majority being driven through their traditional catalogue model. In the proceeding 5 years, that bias was to increase to a planned 70%. In order to support such a dramatic shift in customer behavior, Shop Direct Group needed to reengineer their customer contact strategy in order to support a more unpredictable demand pattern across an extended service window, dealing with an ever more complex mix of calls. At the same time, that strategy would inevitably reduce overall demand for voice contacts and the business needed to be able to manage an extensive call centre estate across the UK. The final element of the strategy was to elevate the end to end customer experience to entice customers away from their competition. In order to achieve this, Shop Direct Group was keen to explore options to innovate in the way they accessed talent beyond the geographical constraints of their existing call centre estate.
One potential solution, seen as a way of meeting potentially all of these challenges, was to consider a Homeworking or ‘ Home Shoring ’ Model. Whilst Shop Direct Group had previously avoided outsourcing their customer contacts, this was seen as a way to gain flexible resource on demand as well as aiding their need to reduce their physical footprint but still meet the demands of their customer base. As a result, Shop Direct approached Arise as the global market leader in providing virtual business services.
SCOPE OF SERVICES
Arise launched their UK business in 2008. As the first Arise location outside the USA, Arise were keen to partner with a forward thinking Client who believed in the true potential of the Arise self-employed Home Working model. SDG collaborated to build out a Proof Of Concept (POC) across Q4 2008, coinciding with SDG peak trading period, which quickly progressed to a full production implementation of the model. Signing a 5 year deal, SDG saw the relationship as a way to enhance the customer experience, add high flexibility, meet unexpected demands of their customer in response to ever-changing marketing activity and all at a cost effective price point. The model was a great way to attract talent into the SDG customer service organisation in areas beyond the catchment of the existing SDG contact centres whilst achieving a great match of demographics between work at home customer service agents and shop at home customers.
Whilst the relationship went from strength to strength, with Arise matching or beating internal SDG performance on a range of KPIs, in Nov of 2011, SDG took the strategic decision to undertake a significant transformation within their contact centres. SDG chose Serco as their Outsource Partner to support that transformation, assuming ownership of the overarching contact strategy and current physical estate and provide funding for significant technology and process change. Based on the delivery of Arise to date, Serco chose to novate the existing contact and retain Arise as a partner vendor, as Arise provided some unique attributes in terms of flexibility and risk mitigation.
With the Proof Of Concept (POC) of just 50 seats, in response to significant Client demand, Arise scaled to 600 seats across the first 6 months of 2009. In a new market, and a new relationship, this proved challenging on all sides and proved pivotal in both Arise’s learning around obtaining quality resource at pace and scale, whilst also underpinning SDG’s future ability to integrate with a 3rd party vendor – unique at that time. In hindsight, the aggressive nature of this growth should have been slowed, in order to ensure that quality was maintained, and supporting mechanisms for such a rapidly growing population were adequately scaled and refined.
With this first ‘ramp’ experience behind the partnership, Arise were able to refine their sourcing processes and knowledge transfer scenarios and subsequently routinely increased seasonal capacity by 100 > 300 heads depending on demand, with relatively minimal disruption to business as usual delivery.
Most Clients traditionally adopt the simplest call types for a POC, SDG chose their relatively simple Orders contacts for Arise to handle. The results through POC were so convincing, that they quickly added to the call mix. Arise were able to cross-skill all of their agents in order that they could service virtually any contact, from Orders and returns, through to complex statement queries and the execution of Credit / Warranty products.
TECHNOLOGY AND SECURITY
SDG utilised VMWare to duplicate the agent desktop within the home working environment, allowing full secure access to multiple internal systems. At the same time, Arise’s VCMS telephony platform was integrated with SDG’s intelligent routing and IVR, effectively making Arise ‘A N Other’ site. In order to maximise the pay-for-productivity aspect of the Arise model, SDG could effectively maximise the utilisation of Arise resource (typically 95%) and gain significant benefits in terms of both cost and efficiency.
Using a combination of robust screening processes, multilevel system authentication and robust security measures, Arise have experienced zero fraud instances since the inception of the program in 2008. This reflects both the high standard of agents servicing through Arise as well as the shared approach to ensuring all risks are mitigated.
Because of the unique nature of the model, Arise were able to offer and maintain very high levels of residual flexibility within SDG Workforce Management. With a predominantly part-time agent pool and a mature demographic who benefit from not always having to work standard pre-arranged shifts, Arise were able to avoid locking down their service commitments until 1 week from delivery, and then being able to flex that lockdown in-week, commonly in-day and even in-interval. At the same time, the capacity profile was able to cope with peaks and troughs that would be unachievable within a traditional brick and mortar environment.
Arise would commonly deliver a profile to SDG that flexes by 300>400% in half hour increments delivering resource right where it is needed. Through a series of harsh winters, Arise was able to effectively take over all contacts at very short notice, allowing internal call centre staff to make their way home ahead of deep snow. On one occasion, this required an additional 1,000hrs of capacity to be secured overnight, capturing £0.5m in revenues for SDG that would have otherwise been lost. Danny Gunn (then head of Planning) described the Arise model as “a planners dream”.
Given the rapid growth and migration to more and more complex calls, in comparison to the original scope, it took time to reach a service offering that could be classed as ‘business as usual delivery’. During this phase, both parties invested significant resource in developing a learning journey that would take new agent with no knowledge, to an in-depth understanding of all call types, delivered in 6 weeks of part-time classes. At the same time, they collaborated on adaptation of existing support mechanisms to take those newly certified agents, and help them successfully apply all they had learned to an unpredictable call mix. Once through this design & build learning phase, Arise were soon delivering amazing results. Quality and compliance rarely fell below target and sales often exceed goal across multiple ‘sales through service’ disciplines. Despite not driving specific sales activities, Arise were able to deliver c£16m in one year through these incremental sales. The following graphs offer a snapshot of that performance: Daniel Mullender, Serco planning Manager, says “Arise are the only group in our estate who can flex and be moved on a 30 minute basis. This is very useful to cover our peaks. Arise are also very consistent on AHT and delivery which also helps our planning assumptions.”
THE NEXT CHAPTER
In 2011 SDG outsourced it’s contact centre estate to Serco as part of an 10 year £430m transformation to deploy greater technology innovation and to deliver more robust self-service options for their customers.
In parallel, Serco have been able to develop off-shore capabilities to complement a consolidated SDG footprint. As a result of Arise’s service performance and unique flexibility, Serco chose to maintain the Arise service through the first year of its ownership of the service. Arise drove continuous improvement in their service results and allowed SDG to maintain a great service to its customers through this complex transition. In 2013 (year 2 of the transformation) with inbound call volumes falling, Serco have concentrated upon the need to fully utilise the transferred SDG estate, safeguarding remaining on-shore jobs and are transitioning the Arise call volume back into its own operations. In communicating the decision to cease consuming services from Arise, Serco stated that the contract termination was in no way a reflection of the excellent service that Arise and its colleagues have provided over the years, and thanked Arise on behalf of Shop Direct Group, for the support provided to the business and to Shop Direct Group’s customers. Merv Allen (Commercial Director) said “we would like to explore other strategic opportunities that may exist across Serco and would welcome the ability to discuss the wider capabilities that Arise can offer.”
Nicola Collister (prior Shop Direct Group Customer Experience Director) – “allows access to pools of people we couldn’t reach from fixed centre locations, sourced from all over the UK, including some remote areas of the country where typically they couldn’t have worked in a contact centre. Arise attracted people into the model from a broader range of backgrounds, e.g. Working mums, disabled and early retirees excited about the flexibility from independent contractor model. When I worked for them, Shop Direct Group were a retail and financial services business and so we had all of the compliance challenges that came with that. All metrics were the same as our in-house estate, and this way of working complimented our existing estate. The Arise homeworkers brought a very different attitude, as they saw it as a profession rather than just a job. Operating at 90%+ utilisation and generating up to 30% reduction in our operating costs the model was great for disaster recovery – I remember the bad snow in peak 2010 when we had to send all our contact centre agents home, the home workers kept going as they were already at home!”
Following her work with SDG’s shareholder group companies (Yodel & Arrow XL) Nicola is now independent and helps a number of organisations in transforming their Operating Models, Customer Experience and People Experience. Nicola is the Managing Director at Custerian, Director at Alignme and Chairperson of the CCA Industry Council.
ARISE IN THE UK TODAY
Arise have been able to launch their innovative business in the UK and offer the contact centre market a viable alternative to on or off shore contact transactions. Their 4 year journey with ShopDirect Group produced significant opportunities to learn and develop that offering, whilst also paving the way for other clients to view home working as a mainstream method of delivering flexibility and superior services to their organisation. Arise now services calls in the
UK for a number of leading organisations, including:
- UK’s largest telco
- UK’s two largest supermarkets
- UK’s second largest roadside assistance company
- UK’s second largest parcel distribution company
- UK operations of the world’s highest rated extended warranty company
- UK operation of the leading global resort ownership network
- UK’s leading TV & Broadband provider