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Going the Extra Mile Keeps 11-Year BPO Relationship Strong

Best Communication: PNC Bank and Océ Business Services

Awards Criteria: Both parties communicate proactively, honestly, candidly, and transparently, enabling them to work collaboratively to resolve issues, take advantage of opportunities, and ensure their interests remain aligned.

Talk about an outsourcing service provider going the extra mile.

Last year Pittsburgh, Pennsylvania, hosted the G-20 summit. Barbed wire defense barriers sprouted downtown. Armed guards patrolled the city. PNC, a bank holding company that currently has assets of $265.4 billion, has five branches downtown that had to remain open. “We had concerns that our internal part-time staff would not be able to overcome the transportation obstacles,” reports Doug Lippert, PNC Operations Manager. So PNC worked to develop proper incentives to ensure it had the proper staffing levels to service its customers.

PNC outsources its mail operations to OcÈ Business Services, whose employees are primarily full time but also include some part-time personnel. OcÈ’s staff, however, agreed to come to work at their regular wages. OcÈ brought in air mattresses for its staff so they could stay the night in case they couldn’t get home. “We wanted to make sure we could consistently meet and strive to exceed our service level agreements,” says Chris Hyland, Enterprise Operations Manager for the OcÈ/PNC relationship.

“We admire OcÈ’s relationship with its employees,” says Lippert. “The combination of quality management and developmental training was evident to all those at PNC Bank who interacted with their staff. It’s a good feeling their staff cares enough to be here to service PNC.”

The situation before outsourcing to OcÈ

Prior to this contract, PNC outsourced the mail function to one of OcÈ’s competitors. “Like any relationship that warrants change, there were issues with our existing provider that were negatively impacting our business. We knew we had to search for an alternative to improve our existing situation,” reports Lippert. “They didn’t manage their staff well, which forced us to manage them. This caused a lot of conflict between their staff and ours,” he recalls. Not meeting their service level agreements (SLAs) did not help either, he adds.

The bank, which has operations in 15 states and the District of Columbia, decided it needed to find a service provider that would bring professionalism and expertise in managing a part-time workforce.

The bank signed its contract with OcÈ in 1999 to do outbound mail processing for bank statements as well as shipping/receiving, distribution, and lockbox functions. Currently, OcÈ processes 110 million transactions per year and handles additional functions for 2,400 branches. OcÈ provides services for approximately 56,000 bank employees.

These seemingly mundane functions can generate a lot of emotion. Lippert says “PNC employees value their incoming mail and rely on its timely delivery. Our vendors need to understand our mail represents business-critical communications, which those who deliver it need to respect.”

Lippert also points out that statement processing is crucial to the bank’s success. “If the service provider does not perform its job well, it impacts us and our shareholders. It’s difficult to acquire new customers, yet it’s very easy to lose them,” he explains.

Why this relationship works: communication and appreciation

Lippert says the two “were partners from day one.” A decade later, he says he doesn’t view them as a service provider. “The OcÈ team is part of us and a valuable resource,” he says. “The gray line between us and them has vanished.”

The teams meet formally four times a year “to make sure we’re aligned and our future directions are still in synch.” That said, Hyland’s team speaks on a daily basis to insure it meets each client need.

When Lippert calls Hyland with a problem, the OcÈ executive “is relentless until he finds the answers for me,” says the PNC executive. Hyland says problems most often occur “because people make decisions they didn’t think out.” But the entire team works to fix them “because they understand that if one person puts this contract in jeopardy, it affects 300 families.”

“There is true transparency between the two teams,” Lippert adds. He regularly asks OcÈ executives to participate in print and mail strategy sessions. “If we are going through a strategic change that our employees are not aware of, I know that I can confide in Hyland and trust him to stay in lockstep with me,” he says.

Lippert brings OcÈ leaders to these strategic meetings “so there are no surprises and no chance for us to get out of sync as we move forward,” he explains.

Lippert says OcÈ has done everything his team has asked them to do, whether it’s in scope or not. “They tell us if they think they can do a process more efficiently. If our request is not a core competency, they tell us to look elsewhere,” he says. “I try to think of ways to keep the entire bank running as efficiently as possible within our areas of expertise,” Hyland explains.

Whenever there is a new technology in the industry, OcÈ executives schedule a meeting to discuss if there is any potential benefit to PNC. Lippert is appreciative that he learns about the possibilities from OcÈ before hearing about them through other industry sources. OcÈ is proactive in letting PNC know what is available.

PNC brings the appropriate subject matter experts to these meetings. “We have an open conversation on why it would or would not work in our environment. They allow us to pick and choose what’s right for us based on the timing and our budget constraints,” Lippert notes.

If the course needs correction, the two communicate about it. Lippert says the relationship was going so well he kept “putting Chris off” because he had larger issues to address. “I inadvertently became a communications barrier, which was hurting the relationship and placing a wall where one should not be,” says Lippert.

The two identified the problem and solved it by allocating a dedicated PNC employee to be the focal point for OcÈ. “We didn’t want to squash communication regarding any of OcÈ’s ideas because I was too busy,” Lippert adds.

Hyland, on his part, tries to get to know everyone on his team, including those working the night shift. “They felt no one paid any attention to them before,” he says of the people who are working at two a.m. “I can’t tell you how appreciative they are when I stop by.”

However, OcÈ doesn’t always win PNC’s new business. The bank wanted to outsource its quick-print centers. OcÈ bid on the work, but the bank chose another vendor because it didn’t think printing was OcÈ’s core competency. “They respected us even though they think we made the wrong decision,” says Lippert.

Once a year, OcÈ management treats PNC’s senior management to a Pittsburgh Pirates game. “For nine innings we all get together and talk about the direction of the company in an informal environment,” says Lippert. He believes fun social events are just as important as the semi-annual meetings to review strategies.

Hyland, who started on a part-time basis with OcÈ’s predecessor while in college, says the relationship works because of leadership’s “constant communication.” Over time, these relationship managers have become friends.


Lippert says this relationship has had a direct impact on the bank’s competitive standing in its marketing because it “allows us to concentrate on what’s important to our customers and focus on our customer service. He adds increasing the bank’s ability to focus on its core business “has been our No. 1 achievement of outsourcing.”

OcÈ has continued to bring cost savings to the table over the 11-year relationship. “They continue to find cost-savings opportunities we would never have found ourselves. They have Six Sigma Black Belts who continue to look for ways to improve our process,” Lippert reports. OcÈ has also worked with the U.S. Post Office and pre-sort vendors to contain costs.

He says he manages many service providers, but OcÈ is the only one to achieve this level of excellence. “OcÈ’s culture is to save money,” he says. The savings go straight to the bottom line and, as a result, the bank has one of the best expense ratios in the industry.

The service provider monitors operations to cut costs. In one case, one of the bank’s major business customers was using a business reply envelope that did not qualify for a reduced bulk rate. OcÈ realized this oversight and found a solution that resulted in $365,000 in annual savings.

Outsourcing has also allowed the bank to avoid capital expenditures.

Lippert says the bank has been actively pursuing new business acquisitions to enhance the PNC brand and drive revenue over the last five years. Recently, PNC purchased another bank which effectively doubled its size. The bank brought in OcÈ’s senior management as soon as it made the announcement. “We shared our due diligence and asked them to assess the acquisition’s mail operations,” Lippert says. OcÈ delivered recommendations about reengineering the mailroom at no cost.

Going the extra mile

The weekend after the Pittsburgh Steelers won the Super Bowl, PNC’s president thought it would be a great idea to put a cookie on every employee’s desk to celebrate. “But they forgot to tell us about this and the cookies just showed up on our loading dock,” Lippert recalls.

The OcÈ team worked all weekend to distribute 23,000 cookies so everyone would have a cookie on Monday morning. “OcÈ had a problem but was not going to say no to anyone — especially the president,” he continues.

Another time, OcÈ replaced a piece of equipment that had become obsolete. The service provider negotiated price only after it had the equipment up and running.

Hyland says OcÈ has one business philosophy: ” We do whatever it takes to provide service to our customers.”

Going the extra mile at OcÈ starts at the outset of the relationship. Hyland says he thinks providers should work to start renewing the relationship the day after they sign the deal. “If you rest on your laurels, you are out the window.”

Transition and employee resistance

OcÈ built an employee experience training class that both teams attended. “The class brought to the forefront the fact that the outsourced employees were really a part of our team. It wasn’t us against them. That turned things around,” says the PNC executive.

OcÈ retained 85 percent of PNC’s existing employees because they were already familiar with the bank’s locations. Hyland says OcÈ hired 48 employees in Philadelphia to manage three locations and 68 employees to manage four sites in Pittsburgh. “We went back and forth between the two towns,” he recalls.

“I asked them at the outset to trust me,” Hyland says. Today, 60 percent of those original employees are still on the payroll. “To me that’s like winning the Triple Crown,” he says. He attributes this successful retention to “great communication.”

OcÈ then delivered 13,000 comprehensive site-specific “user guides” to share its message with every employee. “The guide answered questions that OcÈ anticipated PNC employees would ask,” Lippert says.

The phased transition started with taking over the management of the mail processing center in Pittsburgh. OcÈ wanted to move faster, but the bank “forced the team to take longer than they wanted to ensure they truly knew how to handle these transitions,” Lippert says. After two successful transitions, the bank allowed the service provider to move at its own pace. OcÈ currently manages all 10 mail centers from Pittsburgh to the New York metro area.

Lippert says there was virtually no employee resistance. “Our employees met the announcement with joy because they wanted the change,” he says.

However, employees, who had led an unstructured life, now had to do things “by the book” since the OcÈ team instituted its standard operating procedures. “Now we had to make PNC employees accountable,” Lippert explains.

End users had to get used to the changes, too. “We had to educate our internal customer base that the changes we made were actually improving their services,” says Lippert. His team posted a series of articles on the bank’s intranet to explain why the bank was changing the processes. Once they noticed a theme among the complaints, they published the articles online. OcÈ team members also created articles to assist Lippert.

Hyland reports OcÈ’s systems turned around the operations with the same employees. “The secret is that we got everyone on the same page,” he says.

Summing up, Lippert says OcÈ “doesn’t just show up and do a job. They always look to improve a process and find a more effective way. PNC management has come to rely every day on OcÈ’s good judgment, proactive thinking, and excellent service.” Adds Hyland, “We want to keep this relationship forever.”

That would be a good thing for both parties. OcÈ has been able to grow the account into other service areas. More importantly, the two organizations have partnered on a variety of industry awards as well as supporting other business ventures by providing each other with professional recommendations and references.

Lessons from the Outsourcing Journal:

  • Buyers should compare prices to insure they are receiving the best cost every time there’s an acquisition and another service provider has been doing the work.
  • Buyers need to get to know the service provider’s managers personally to build effective communication.
  • Buyers should communicate clear expectations not only up front in negotiations, but also on a continual basis throughout the relationship.
  • Buyers get better outsourcing results if they act as partners rather than dictators.

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, BPO, Cybersecurity assessment, IT Outsourcing, and Cybersecurity Sourcing. 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].

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