Outsourcing Excellence Award – Best Governance – Westpac and EDS
From the outset of the contract, Westpac and EDS established a very strong relationship with a commitment to service excellence. Both organizations share a vision that is focused on working together to best serve the customer, rather than on seeking individual benefits from the relationship.
The relationship is mutually beneficial because it is supported by well-defined governance processes and best practice innovation in technology, methods, workforce management, industrial relations and service delivery in business process outsourcing (BPO).
Improving Customer Service While Avoiding Capital Investment
The history of the contract began in 2001 when Westpac conducted an analysis that found most services, including mortgage origination processing, mortgage servicing, security, call center services and cross functional/shared services delivery, did not need to be part of the Bank’s core capability.
Westpac then analyzed the potential benefits of outsourcing these business processes compared with making the capital investment to retain them in-house.
Outsourcing won – rather than Westpac investing in new back-office processes, EDS did.
For Westpac, it was imperative that the arrangement supported its customer service aims, by giving a consistent experience, allowing process metrics to be visible across boundaries and maintaining an end-to-end view of the process that starts and ends with the customer.
Today, Westpac is experiencing improved service delivery of IT and business transformation projects, with independent surveys recently reporting that EDS’ delivery of service satisfied or exceeded nine out of 10 of the Bank’s customer expectations.
Making the Partnership Strong
Today EDS and Westpac rate their overall relationship and service performance as excellent – an outcome due not only to sharing a customer focus, but also to establishing clear accountabilities, strong governance structures and a peer-to-peer relationship.
All roles and responsibilites of buyer and provider are clearly defined, as are the processes for change management and issue escalation and resolution.
At the operational level, the two organizations identified business process enhancements to improve both work quality and the customer experience. This also resulted in re-negotiation of new enterprise agreements for a more flexible workforce including industrial relations, delivery of IT and busines re-engineering transformation projects.
The re-negotiation of certain contractual agreements to allow for a changing business environment resulted in new agreements for increased service levels, which were 100 per cent delivered by EDS. “We put out a very customer-focused strategy,” Westpac’s Vonhoff says.
The buyer and service provider have developed a relationship based on mutual respect, equal bargaining power and open communication. Although renegotiations have been, on occasion, tense and protracted, the outcomes are sensible and sustainable.
“What we’ve been able to do at my level and my boss’ level, is to ensure the end-to-end process is intact and working better than before and that relationships are sound,” Vonhoff says.
Managing the Relationship
Together, Westpac and EDS have established and maintained a very well-defined governance process.
Under the problem resolution framework, both companies must first focus on fixing the problem by determining the best solution for the customer and ensuring legal and general compliance contractual discussions are taken off the critical path.
If Westpac senior management is unable to resolve an issue, it is taken to the next level in the organization. When the parties have an issue to resolve, particularly in the area of joint process engineering where there are benefits to share, management from Westpac and EDS agree in terms of what is fair, and work together to ensure the best outcome for the customer and staff.
“We have quite a few forums in place for things to happen between the two organizations, and there is also a clear process if issues need resolving. Our relationship has evolved over time, and we now believe that each forum plays a significant role in promoting the right behaviors of each organization,” Vonhoff says.
Senior management from both organizations sit on two formal governance committees:
- An executive board, which meets quarterly to manage relationship issues, set strategy, determine how Westpac can leverage the relationship, and discuss joint opportunities outside the existing contract; and
- A change steering committee that meets monthly to deal with change management issues.
The forums include:
- Technology – to deal with issues such as upgrades and disaster recovery;
- Projects – to discuss how to manage and prioritize projects;
- Communications – to ensure Westpac associates are informed of how EDS is performing through external surveys from either customers, builders or solicitors, with the results shared by EDS; and
- Operations – to review service levels.
“How do we know the relationship is working? As far as our customers go, it’s the improved service delivery and a positive impact on their experience. For Westpac, it means lower costs and a freedom from future capital investments because EDS will make those investments, allowing us to focus on strategic growth,” Westpac’s Vonhoff says.