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Multi-Client account within Capita UK Life and Pensions Services Division is able to plan, control and deliver services with new certainty and exploit new opportunities using back office workforce optimisation strategy from Active Operations Management (AOM)

Even though demand for professional services outsourcing has held up, the legacy of the recession for providers like Capita, has been a much tougher marketplace.

Invariably, this means getting work – and keeping hold of it – increasingly requires a commitment to deliver or improve already high service levels, in some cases at a lower budget. However, while finding cost savings within an existing operation is tough enough, reducing costs while increasing speed and maintaining the quality of service provided is a real challenge.

Pressing challenges

New contractual terms required Capita Multi-Client to achieve these objectives. Specifically, it had to deliver the same quality of service at the same cost, while shortening service levels from five days to three. From a productivity perspective, this meant implementing a controlled transition to operational practices that would enable the operation to work with tighter service levels – all within an ambitious timescale.

From the cost side, client demand was putting increased pressure on Capita Multi-Client to deliver service improvement in its business process outsourcing (BPO) operation. With a variety of projects and services being managed throughout the operation, it also needed to meet changing demands and build capacity to manage future challenges.

Mark Randall, managing director for Capita Multi-Client said: “We needed to deliver better service, with the same number of people. Therefore, productivity became a key factor in the new contract. Cost was always important but nowadays it is important to deliver service improvement too.”

More than an IT solution

To meet these challenges, Capita Multi Client prioritised the development of its current operations management approach and the need for a shared capacity planning solution across accounts.

According to Randall, this “was not just a case of putting in an IT solution”. What he required was the tools, method and skills to assist his organisation in actively balancing work and resources across teams.

For this reason, Capita Multi Client rolled out Active Operations Management (AOM), a blended approach that incorporates a data-driven technology solution for consistency and visibility of work and available resources. It also comprises a tested framework of methods and skills that enables managers to make information-led decisions.

“AOM was all about improving the skills of our team managers,” he confirmed. “The introduction of AOM gave us a shift in management culture. It also provided us with hard factual data to ensure that the account is working as it should be and Capita achieve the next level of efficiency needed to lead the market.”

Active response

The AOM approach not only equipped Capita Multi Client with the necessary information, skills and processes required to plan, control and deliver services with new certainty but has also enabled it to exploit opportunities as they arose. This has included reducing regulatory risk by cross-training staff in critical specialisms and training staff for work with new clients as workloads changed.

During the implementation, particular attention was given to 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 was a surplus.

This addressed the issue of limited flexibility and enabled service to be delivered at a lower cost through a 10 per cent improvement in productivity. It also removed dependence on overtime from a few skilled individuals. Overall, overtime was cut by 50 per cent.

“It’s not about throwing more staff at the issue in order to achieve the service levels and avoid fines,” said Randall. “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.”

Capita achieved shorter service levels thanks to improved medium-term planning and increased efficiency when balancing work and resources. It also met its objective to reduced service levels from five to three days while maintaining its existing profit margin. Overall, the cost of the AOM implementation across Capita Multi-Client was recouped in seven months, rather than twelve months as had been anticipated.

In addition to giving the senior management team the necessary method and visibility of workload and capacity to balance work and resources across teams, it has also provided accurate information that has given team leaders confidence to manage individual performance on a daily basis.

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. “People need to have a clear idea of where they stand,” said Mark Randall. “Thanks to the increased transparency provided by AOM, staff know what is expected of them and what they can achieve.”