Outsourcing Excellence Award – Best BPO – Louisiana Dept of Social Services and ACS
August 29, 2005: the day Hurricane Katrina hit New Orleans. It:
- – Displaced 1.2 million people
- – Destroyed telephone service in the city
- – Took down power lines as far north as Baton Rouge
Robbie Endris, Executive Director of Support Enforcement Services for the state of Louisiana, had 48 hours to marshal her troops before the hurricane hit land; during disasters the Department of Social Services assigns its employees to new work where needed. “Shelter became a priority,” she says. Ninety percent of her staff went to work in the shelters, leaving a skeleton crew of five to run the state’s child support program, which had 284,000 cases.
Who did she turn to for help? Her outsourcing supplier, ACS, which collected and processed child-support payments and operated its customer-service center. “ACS stepped up and kept things going. They went into overdrive. I don’t know what we would have done without them,” she says. At the time, ACS was collecting $306 million a year in child support payments and was operating the customer service center.
ACS Blows In
ACS’s first priority: reestablishing communication. “I didn’t have time to work things out with Bell South because it was a total crisis down here,” recalls Endris.
The state’s 800 number was down because it was routed through New Orleans. However, when ACS established the service center in 2004, it established a local phone number, which was really from Houston. ACS discovered this one line was still operable. The supplier redirected the child-support toll-free number to this circuit; remarkably, its staff was able to continue to answer the phones. “ACS got this done in a week; that was extraordinary,” she marvels.
In addition, the voice-response system at the call center in Baton Rouge worked the whole time. ACS answered questions and was able to put out announcements. “Our contract had set hours for service. Within a day’s notice, ACS extended call hours to 12 hours a day, seven days a week. Without waiting for us to ask them to quote a price, they said, ‘Don’t worry. We’re going to provide this service.’ They gave us some services we never paid for; they didn’t even bill us,” says Endris.
Next, ACS created a line called Louisiana Help You (1.800.LAHelpU) for the department. Employees and child-support customers were able to call in and get information. The state advertised this number nationwide; it even ran across the stock exchange ticker tapes.
The partners later amended the contract to include the new Louisiana Help You line. ACS offered the state volume pricing since the hotline already had a high number of calls. “We didn’t ask for this because we were so overwhelmed we didn’t even think to ask. You don’t see companies where you have a firm pricing contract come back and say, ‘Let’s give you a break,'” marvels Endris.
Task three: getting child-support checks to parents, many of whom had fled the state. Endris says the department had 40,000 child-support checks written and ready to send to New Orleans before the storm hit. But there was no mail service. The checks kept stacking up. “The Katrina refugees went everywhere,” says Endris.
One glitch: the state had never purchased the Post Office change-of-address service. “My staff didn’t have time to buy services and negotiate new contracts. Everyone was in crisis mode. ACS just did that for us,” she says.
But ACS had this change-of-address service in its Ohio office. ACS started running the child support department’s lost people through that system in Ohio. The system listed which Zip Codes were closed for delivery. “This changed daily,” reports Richardson. Postal service resumed when the power returned.
The department staffers worked with ACS to develop a system for rapid address changes: the supplier made the address changes and sent them to the department. Child support staffers then pulled these checks and mailed them to the new address. They also stopped issuing checks to specific New Orleans Zip Codes.
After the hurricane, the department was able to mail 100,000 checks to displaced custodial parents. In Louisiana, the department used FedEx, UPS, or drove the checks to the parents themselves because there was no mail delivery.
“This transition involved a lot of communication. We made changes daily. Synchronized teamwork got the money out. We distributed millions of dollars post-Katrina to people who had relocated all over the nation,” says Endris.
The state was so pleased with the way ACS handled the child-support service center after the hurricane that the Department of Social Services asked the supplier to establish a call center to provide information for displaced services. “They didn’t have a centralized call center like child support did,” says Richardson.
The new call center provided referrals for food stamps, missing persons, Social Security benefits, Medicaid, etc. ACS had a 24/7 customer-service center ready within six hours of this request working from its data center in Tarrytown, New York. ACS also added information from FEMA, the Red Cross, and Social Security. This call center received over 45,000 calls its first three days, says Endris. Since the interactive voice response (IVR) system didn’t work the first two days, customer-service representatives answered all calls. “We reached out for help across our company,” says Richardson.
ACS in Louisiana, Houston
ACS had its own challenge: Tina Richardson, ACS’s Director of the Louisiana Centralized Collection Unity and the Louisiana Call Service Center, lost her home to the flood. ACS helped her find a rental house and then sent an ACS employee to New Orleans to help her keep things going at the customer service center; he helped out at the shelters at night. “They knew what pressure she was under,” says Endris. The visit was a challenge since there were no hotel rooms; he brought his sleeping bag and stayed with people he did not know, but who were willing to open their home to him.
The supplier also set up a booth in the Houston Astrodome to serve Louisiana evacuees who ended up there. It did the same thing at Kelly Air Force Base in San Antonio. Parents could pick up their checks there.
“Every time we got into a bind, ACS was there to help us,” says Endris. “We had to make decisions quickly in the aftermath of the hurricane. A year later, we were still dealing with the changes in our caseload. ACS has stepped up to support us in all our changes.”
Life Before Katrina
Every day people in Louisiana get divorced. If they have children, one parent has to pay child support.
ACS has collected and processed child-support payments in Louisiana for 10 years; federal law requires each state to establish one point for all child-support payments paid through the state. In 2005 the child-support department wanted to outsource its customer-service center. “We get hundreds of thousands of calls annually and most ask one question: Did I get a payment?” explains the Executive Director.
The department used an outdated IVR system that was continually down. “We couldn’t handle the calls and the legislature was complaining. It was bad. BAD,” says Endris.
The state also wanted to outsource for locate services. Louisiana joined the Electronic Parent Locate Network, a consortium of 13 states to locate parents; ACS has the consortium contract.
The Supplier-Selection Process
The state issued an RFP. It looked at a number of suppliers. “ACS won the contract because they offered us the needed services at a reasonable price. We selected them because we got more bang for the buck,” says Endris.
The state also wanted the winning supplier to locate the customer-service center in Louisiana; the department felt it would be easier to take back in house if it were located nearby. ACS was willing to locate the center in Baton Rouge, where it handles the state’s centralized child-support collections. “We really liked the fact our residents had the opportunity to get the job,” recalls Endris. The department signed a three-year contract in 2004.
The Transition Period
Endris says the department decided to start the customer-service center “from ground zero.” ACS recommended the two groups establish an implementation team. “We engaged the staff at all levels,” recalls Richardson, who now is the State of Florida Project Director for the Disbursement Unit.
ACS invited state employees in all the field offices to develop frequently asked questions (FAQs) and call protocols. “We worked hard to get good information. We worked out every single detail sitting around a table. The only way to give out good advice is to engage the people who have been answering these calls every day,” she says.
ACS invited field staff to join them in the call center when they started taking calls. “We wanted them to listen in and hear how we were talking to their parents,” Richardson says. This process had another benefit: the case workers gained confidence that the ACS staff would disperse the proper information and enforce their policies properly.
Richardson says there was “a lot of sensitivity” about the shift to the call center because parents were used to talking to their case workers. The Louisiana employees worried that some parents would resist talking to someone at the call center. “We knew it would take time for parents to have confidence in us and accept they don’t have 100 percent access to their case workers,” says the ACS exec.
If the call center couldn’t resolve an issue, the ACS employee sent an email to the case worker, who had 48 hours to respond. “Our service level agreement is to answer 90 percent of the calls,” reports Richardson.
The case workers also helped ACS learn how to deal with employers since 75 percent of the checks come from withholding wages from the paying parent.
Implementation took 18 months. The first challenge: trying to sync two disparate computer systems. “We didn’t have any major unexpected unexpecteds. When we found things, we said, ‘Uh-oh. We’re going to have to deal with this,'” says Endris. There were times when the partners had five different companies on the phone calls to work through IT issues.
The department hired the company that does its mainframe programming as a mediator because its staffers understood the issues “from both sides.” She says “ACS and I were both glad they were on board. It was a total team effort to get the system up and running,” she says.
There was no resistance to outsourcing. “Our people were thrilled. It was a relief. They had plenty to do already!” says Endris.
Governance
This outsourcing arrangement has service level agreements (SLAs) with penalties and incentives.
If someone in the buyer’s organization has a complaint, he or she brings it to the attention of the local ACS staff. “We communicate SLA issues with the local staff; we have a wonderful relationship with them, even though it’s not roses every day,” says Endris.
Business Benefits
ACS provides a voice-response system that “has made a marked difference,” says Endris. Customer service has “improved dramatically. There is no way a state agency could handle all these customer inquiries,” she adds.
Since ACS has similar contracts with other states, the supplier shares intelligence. “They are always pointing out the other services available,” she says. ACS also keeps the department informed about changes in technology.
Now the case workers don’t have to handle the routine calls. They have time to research difficult problems, adds Richardson.
The new system is easy for parents, many of whom work and couldn’t call into the department during business hours to check on their checks. The IVR system handles as many as 500,000 calls a month, according to Richardson. Parents have PIN numbers so they can listen to their payment information safely. Some parents prefer to use e-mail. ACS also has an e-mail correspondence unit.
Why This Relationship Works:
- ACS executives show their commitment to the relationship. One of its managers visits the department every week. “That personal call gives me a high confidence level in ACS,” says Endris.
- The partners have made this personal. “We spend time with them socially,” says Endris. The two groups have lunch and dinners together. “We don’t feel they’re different. They are part of our team. We don’t feel a separation between the two organizations,” she adds.
- ACS addresses all SLA problems “rapidly,” says Endris. “Their concerns are our concerns because we have good days and bad days,” says Richardson.
- The buyer believes in the supplier. “Child support is hugely emotional,” says Richardson. “It took a lot of confidence for the department to create a call center. And they knew we wanted to make their program successful.”
Endris is an outsourcing believer, especially after Hurricane Katrina. “ACS is special to me. I get emotional talking about my team. We hit bottom in 2005. When the winds of Katrina blew through our state, we were overwhelmed with difficulties. My top managers and my employees were everywhere. I didn’t know how we were going to unravel all this. How were we going to answer phone calls? Or get people their child support checks? My department had to step up to the plate. We did, with ACS’s help.”
Lessons from the Outsourcing Journal:
- During a crisis, buyers generally always have help from their outsourcing partner. In this case the help went way beyond the contract.
- When the outsourced process is personal–like child support–it’s important for the supplier to involve the buyer in preparing documentation for call-center representatives. ACS invited the case workers to work with the call-center employees when the call center opened to ensure the information they were sharing was correct.
- Extraordinary efforts by the supplier typically end up with more business; the trust it’s already generating goes a long way in a crisis. ACS got the extra business without an RFP because there was no time–it had six hours to be up and running.
About the Author: Ben Trowbridge is an accomplished Outsourcing Consultant with extensive experience in outsourcing and managed services. As a former EY Partner and CEO of Alsbridge, he built successful practices in Transformational Outsourcing, Managed services provider, strategic sourcing, BPO, Cybersecurity Managed Services, and IT Outsourcing. Throughout his career, Ben has advised a broad range of clients on outsourcing and global business services strategy and transactions. As the current CEO of the Outsourcing Center, he provides invaluable insights and guidance to buyers and managed services executives. Contact him at [email protected].