Outsourcing Excellence Award – Best Offshore – Delta Airlines and Wipro
One of the victims of September 11 was the airline industry. Delta Air Lines began to lose money shortly after the Trade Center towers went down. “We had to evaluate how to cut costs,” says Gloria Richard, General Manager, Outsourcing Delivery.
Outsourcing seemed to be a viable option. It was a painful decision for us because we are very employee focused,” says Richard. “But we had to find a way to answer phone calls quickly and efficiently while providing good customer service.” She says it was very challenging to hire an adequate number of people at US salaries and benefits. “So, to accomplish this, we started looking for a strong, strategic offshore partner,” she adds.
Delta chose to outsource to Wipro, signing a three-year contract in 2002. The Indian partner handles inbound phone calls, some outbound calls, and baggage support. The airline also outsourced some back-office work like message rejects, Frequent Flyer support, Web and email support, emails, and cargo space control.
Delta decided not to outsource calls from its premium members. “We had to make sure our outsourcing decision did not negatively impact our customers,” says Richard.
Selecting the Supplier
Since no one at the call center had outsourcing experience, Delta hired a consultant to help it select suppliers. Then Delta formed a team that included members from every department at the airline, including legal and public relations. “We invited everyone in the organization to provide input in selecting the best solution for Delta,” says Richard.
The consultant helped the Delta team prepare a Request for Proposal (RFP), which they distributed to the top 30 call-center suppliers. The Delta team hit the road and visited the suppliers’ facilities. “We actually listened in to their phone calls to hear how they interacted with North American customers and to get an understanding of their conversational skills and cultural connection. We had to make sure the supplier had the capability to take care of our customers,” says Richard.
The list of criteria was as long as a jet stream. “We wanted a partner that followed best practices. Did they live and breathe quality? We looked at attrition rates, legal practices, and financial stability,” Richard notes.
The airline took a close look at how the supplier treated its employees. “We reviewed their HR policies to ensure they were employee friendly. That was important to us. We didn’t want to conduct business with a company that did not practice within the labor laws,” continues Richard.
The airline technology and security teams also performed extensive due diligence to ensure the supplier could met all standards. From there, the team narrowed the list to 11 suppliers. They then narrowed the list to four finalists and brought them to Atlanta for negotiations. The Delta team used a weighted system to award the contract to the best qualified supplier.
Hoshedar Contractor, Vice President, Operations, for Wipro says Delta was looking for a partner that had similar corporate values and philosophies. Wipro also has expertise in the airline industry, which appealed to Delta. “The Indian airline industry is also mature. That’s where we gained our domain expertise,” he says.
An Offshore Primer
The Wipro/Delta relationship began in 2002. Delta experienced some resistance from its employees. “Of course, people become concerned with job security when they hear the word ‘outsourcing,'” Richard reports. “We made it clear our goal was to preserve as many jobs as possible. But we had to find a way to continue to service our customers at a better cost.”
The airline sagely solved the problem by not jettisoning any employees because it outsourced. Instead, it simply did not replace employees who left; the company’s intrinsic attrition rate solved the problem.
“Ultimately, we earned everyone’s understanding. Employees in any industry might never be completely comfortable with the idea of outsourcing, but now our people recognize why we do it,” Richard reports.
“We involved our employees early in the transition process, seeking their input on how to move Wipro through the learning curve quicker so they could serve our customers better,” Richard reports. Frontline people traveled to India to train and assist. “They shared their experiences with their fellow workers; this helped everyone see this was a good thing for Delta. We couldn’t have done it without them,” says Richard.
Delta training facilitators went to India to work closely with Wipro’s training team, preparing them to train their own people using Delta’s tough new-hire curriculum. “We observed the Wipro trainers as they conducted classes. Once we felt they met our requirements, we certified them to conduct ongoing training on their own. “After the initial training, they needed minimal support from us,” adds Richard.
Contractor says Wipro created training modules to teach the Mumbai employees about American culture. One example: why is finding a flight at Thanksgiving so important to Delta customers? Another thing: What is Halloween?
Richard says the outsourcing consultant helped the airline foresee some of the difficulties in offshoring a process that they “wouldn’t have known if we did this on our own.” For example, Delta was able to proactively develop processes around communicating policy changes, which typically produces a bumpy ride for buyers.
The two parties start each year with a strategy session to establish direction, set goals, and share best practices. The airline has created a dedicated organization at its Atlanta, Georgia headquarters to specifically support the offshore solution. Members of the Delta team go to India on a monthly basis.
Richard says she schedules weekly conference calls to discuss the previous week’s performance. “But our communication is not limited to once a week. We talk to Wipro daily, just like you would one of your internal offices. “We know we can phone Wipro 24/7 and always speak to the right person for whatever we need.”
Why the Relationship Works
Richard says she is impressed with how Wipro works with her to address challenges. Early in the relationship the Delta staff had issues with Wipro’s project manager, a vice president and well respected in the organization. “We realized early that we needed our project manager to be solely dedicated to our efforts; a vice president just can’t do that,” she explains.
Wipro quickly rectified the issue after Richard shared her dissatisfaction with her senior sponsor at Wipro. “We gained trust in Wipro early as a result of how they handled this event. It’s been building ever since,” she says.
Richard adds that this event helped develop a good-faith relationship and helped the partners easily settle “some sticky points” in their renegotiation. “Both sides understood the importance of give-and-take in a relationship. We conducted the negotiations under that guiding principle,” she reports.
The airline works with its supplier to determine proper incentives for its Indian call-center employees that line up with Delta’s strategic goals. “Every year we budget some money for Wipro incentives,” notes Richard. For instance, the airline and the supplier share the funding of an annual trip to the US for top Indian performers “so they can increase their understanding of American culture.”
The two partners work together to improve the capabilities of all employees dealing with Delta customers. Richard says Delta will send Delta trainers to India if Wipro needs extra help. “They just have to holler,” she says. To reciprocate, for example, Wipro will agree to take on new work functions without a statement of work; the supplier will put Delta people through its Six Sigma training without charge. “It is a very strong relationship,” adds Richard.
The relationship was further strengthened when Delta declared bankruptcy. “They participated in phone calls in the middle of the night to ensure they knew exactly how to handle customer inquiries about our bankruptcy filing. They offered to support us in any way they possibly could,” recalls Richard.
Contractor says in this relationship no one sees themselves as either Indian or American. “We understand that we both have to work together to succeed. We see the gray areas and work to solve them. That’s our winning solution,” he adds.
The supplier says Delta is hugely responsible for the relationship’s success. “They made it easy for us to communicate positives and negatives from day one,” says Contractor.
At its most basic, offshoring to Wipro solved Delta’s challenge: “We have been able to get our calls answered at the same level of service for a lower cost,” says Richard. In addition, Delta call-center employees now are freed up to handle Delta’s most premium customers.
The time zone difference between Mumbai and Atlanta “helped us out by leveling the peaks and valleys of our call volume,” points out Richard.
This was especially important when hurricanes Katrina and Rita hit the US. The storm shut down many of Delta’s operations in that part of the country. Wipro people helped out by working extra hours, which made it possible for Delta to route extra calls to both Mumbai and Pune. “We knew they needed our help during this crisis. We stretched our resources and made sure we were there to support them. These actions strengthened our bond,” says Contractor.
Wipro’s ability to improve and innovate using tools like Six Sigma and lean manufacturing allows it to offer insights into call-center operations. “We can suggest quality initiatives,” says Contractor.
Richard says Delta’s business “has improved. If we hadn’t found a way to bring down the overall costs, we might have had to outsource the entire department. The savings Delta generated by outsourcing some of its business saved US jobs instead of eliminating them,” she concludes.
Wipro’s Top Ten List: Building Lasting Customer Relationships
A strong customer relationship is a result of a finely balanced mix of tangible and intangible attributes. Business relationships thrive when people at either end get aligned to a common goal: excellence in delivery. While effective listening is a critical component for planning, it is the relentless focus on the business needs of the customer that is required during the execution. Innovative thinking and effective introspection can help a service provider to command customer trust and become an integral part of the customer’s business strategy.
Here is the list of tangible and intangible attributes that Wipro believes creates, maintains, and enhances strong, lasting customer relationships.
- Be responsive to the needs of our partners.
- Base relationships on trust. Integrity is never compromised.
- Focus relentlessly on quality and innovation.
- Develop a process-dependent framework.
- Create open communication channels.
- Build scalability and flexibility in solutions.
- Have a strong industry-specific knowledge bank.
- Align our goals to the strategic goals of our customers.
- Adopt a consultative approach to address the business challenges.
- Create strong governance and ensure compliance.
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].