Abbey National Banks on Innovation by Outsourcing Document Management | Article

bank papersFor Abbey National, a London UK-headquartered banking and financial institution, the international growth of its business meant it was time to examine its business processes, in particular its document management functions. With over 15 million customers in the UK and overseas, the expansion of Abbey’s business inevitably lead to growth in support services, which were developing independently with some central control. This resulted in a complicated management structure with mail units dealing with different service sectors and each working to their own standards, explains Brian Douglas, operations manager for Abbey’s third-party outsourcing relationships.

Abbey needed to standardize its mailing and document distribution services, while amalgamating multiple, specialist departmental mailrooms into central hubs in each of its locations.

The bank decided outsourcing the whole process to one service provider was the best solution. “We recognized document management services were not part of Abbey’s core business,” says Douglas.

Searching for a True Partner

Abbey National wanted a service provider that could offer an innovative approach and view the contract as a close partnership. It was also important to have a close cultural fit, explains Douglas. “Looking further ahead, we realized a simple contractor/client relationship was not enough. A partnership was essential to develop the right initiatives and innovations. We needed a provider who would jointly share the successes of delivering efficiency and value for money.”

Finding the right partner required careful assessment. The bank selected Pitney Bowes Management Services (PBMS), a London, UK headquartered supplier of document management life cycle services to 1,300 customers across Europe and North America. The parties, which signed a contract in 1998, also had a supportive Transfer of Undertaking for Protection of Employees (TUPE) practice.

TUPE is part of Britain’s Employment Relations Act of 1999, which protects employees involved in outsourcing relationships. Adele Padfield, national contract manager at PBMS explains that when an employee transfers to a provider’s payroll, the outsourcer may have different rules regarding benefits, pensions, etc. TUPE guarantees these employees their original benefits and allows the previous employer to retain the knowledge and experience gained by that employee during their years of service.

PBMS offered a wide range of integrated services covering the entire document management life cycle including document creation, production, distribution, archiving, and retrieval. Abbey was keen to potentially explore these options with the aim of bringing further savings and innovations to its office services functions. “We welcomed the arrival of PBMS because we knew it had the scope and depth not only to deliver the service but take us forward in our development,” says Douglas.

Outsourcing Saves $1.2 Million

Streamlining mail operations has been profitable for Abbey. Douglas says the introduction of new technologies have brought Abbey tangible savings of £750,000 ($1.2 million) through the reduction of full-time staff required to implement these functions and the release of valuable office space through mailroom centralization.

To streamline the process, PBMS first addressed Abbey’s departments, which were opening and sorting their own mail, and absorbed this function into the mailroom. For the provision of documents in electronic format, PBMS designed solutions to scan incoming mail directly into Abbey’s image and workflow systems.

PBMS currently handles 9.6 million items of incoming mail and 10.4 million items of outgoing mail for Abbey each year. The firm also now manages 171 staff members who support 21 office locations and a network of 750 Abbey National branches.

Delicately Handling the Employee Transfer (TUPE)

Legal regulations required the provider to add Abbey’s staff to its payroll. The service provider guaranteed a smooth transfer of employment.

Abbey was impressed with PBMS’ level of commitment to staff training as both parties realized they needed the full commitment of the staff involved if they were going to achieve their goals. “PBMS made sure on-going training programs kept the staff motivated and equipped them with the necessary skills across multiple disciplines so they could successfully deploy their new solutions,” says Douglas.

New TUPE candidates visited existing PBMS sites to discuss their experiences with others in an honest, open format without management presence. “PBMS managed to retain key staff members and keep teams motivated after the transfer,” he says.

This was a worry, Douglas notes, because during the assessment phase uncertainty can lead to key staff leaving the original company rather than waiting to find out if they still have a job with the new company.

“PBMS have always been conscious of staff concerns and successfully avoided losing key staff. It remains critical that during the transfer to PBMS, service level continuity is unaffected. PBMS’s success here has helped maintain morale and ensure that smooth continuity of service level during the transition,” he says.

John Willmott, a senior analyst at Nelson Hall, a Berkshire, UK-based BPO research firm, says there is an increasing interest in document management outsourcing. “It is a growing area since it is an increasingly important element in many of the ‘white-collar’ BPO services that are growing strongly. It is typically an embedded service tied in with industry-specific process handling, rather than a service in its own right,” he explains.

Abbey is keen to build on its existing relationship with PBMS, which Douglas says has fulfilled Abbey’s criteria for providing an innovative approach. The best vote of confidence is to give the service provider more business. Abbey National is doing just that. The bank is expanding its mailing and document distribution to include records management, fax fleet management, central reprographics, reception, and stationery services.

Lessons from the BPO Outsourcing Journal:

  • Large firms can release valuable office space and reduce storage costs through outsourcing centralizing mailroom systems.
  • It’s critical that the service provider have a good system to integrate the buyer’s employees into its fold. Training programs and employee protection stipulations are crucial.
  • Service providers with a cost-effective and innovative approach to document distribution provide customers with multiple sites and increased flexibility of access across different locations.

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