To provide a national, seamless customer information service when the UK railway system was privatized in 1996, its 26 train operating companies jointly established National Rail Enquiries. It's now the busiest phone number in the UK. National Rail Enquiries handles 60 million telephone contacts annually, plus another 60 million hits through its Internet channel. Although other companies can provide similar information, National Rail Enquiries is the first place UK rail customers turn. Average time to answer calls is 20 to 25 seconds. But Chris Scoggins, chief executive at National Rail Enquiries, says that wasn't the case a few years ago.
Average time to answer before outsourcing the process was not measurable, but anecdotally, it was regarded as one of the worst services in the UK. Some customers may have found it faster to get information by driving to the trains station to read the timetables! Service was so poor that the company was being fined about £0.5 million pounds per month by the government's Office of the Rail Regulator, which regulates service levels for number of calls answered.
That was an incentive to outsource to an expert who excelled in running very large call center operations and had the technical infrastructure and expertise to deliver top-notch services cost-effectively. Three outsourcing providers -- BT, Serco, and First Info -- are now responsible for these services. Daytime calls are routed among the three companies on a zonal basis. All nighttime calls are routed to BT. Working together, the three companies now ensure service is around 95 percent and exceeds the regulated levels.
Business transformation began with consolidating National Rail Enquiries' 65 call centers (and 85 phone numbers) down to six centers among four outsourcing companies. The majority of the company's 1,000 employees were transitioned to the outsourcing providers. Scoggins is responsible for managing the outsourcing relationship and BT's execution of the contract, as well as dealing with shareholders (the 26 train companies), regulatory authorities, and another 15 vendors supporting the telephone and Internet channels of service to rail customers.
The consolidation to six call centers and four providers was gradual, continuing through 2001 to three providers and four call centers. With service levels vastly improved, the company now can focus on dynamic competitive advantage initiatives. There have also been major process and system improvements.
Scoggins says National Rail Enquiries is also launching a series of valued-added Internet services during 2003. For example, customers will be able to access seat-availability information, rather than just timetables.
Making it clear upfront what it wanted to achieve through outsourcing, National Rail Enquiries also established incentives to motivate high performance and align both parties' interests. Targeted levels for quality and accurately answering customer calls are measured daily with bonuses paid on a monthly basis. National Rail Enquiries monitors calls daily through a specialist third-party mystery shopping company posing as the public.
A crucial factor in the success of BT's call center operation is the provider's ability to motivate its staff to stay the course, adapting to enormous volatility in demand. "On an average day, our service providers may get 150,000 calls," reports Scoggins. "But on an average Monday, they get about 170,000 calls." That's nothing compared to what happens in a storm or other crisis impacting the railways.
A bad storm in October, 2002, for instance, resulted in trees on the lines and flooding. The rail network was largely shut down, apart from Scotland, for most of the day. "We only received 530,000 calls that day," the chief executive remembers, "because the calls exceeded the UK telephone network capacity."
Call volume also went up drastically - to 1.2 million calls per day - during a fuel crisis. "Anytime there is unpredictability because of the weather, our volumes frequently go from 150,000 a day to 250,000 a day with no warning," says Scoggins.
Evening call demand also experiences sudden spikes; people make a cup of tea or call to get the train schedules for the following day in the five-minute breaks between television programs and during commercial breaks. The influx of calls during those moments is already huge but significantly rises and falls according to whether the evening soap operas' story lines are gripping.
During major disruptions of rail service, the UK rail industry declares a "void day." Those periods to do not count toward measurement of BT's contractual service levels. Scoggins says that, obviously, it's not possible to make people accountable for answering three or four times the normal call volume in the same amount of time.
Still, he says the outsourcer tries to make it happen. BT has deployed technology to answer some calls in those cases and also motivates its staff to be flexible and committed. During a demand surge, technology kicks in with recorded messages separating callers seeking current information from those seeking future travel information. Technology also gives the status of which lines are running or how off-track the schedule is. It prompts people who need to speak to an agent for a more complex inquiry to hang on in the queue. At times of rail service disruption, call durations are longer, and average time to answer grows to three or four minutes - still good, in view of the circumstances, and the public accepts that.
Scoggins says he is continually surprised at the outsourcer's ability to motivate team spirit and a high level of dedication among its staff. "They come in on a void day and then do 12-to-14-hour shifts, even when they are not rostered to be there. The enthusiasm that BT engenders in its staff is a huge added value for us," he says.
Wheels of Change
Business transformation requires that both parties work together flexibly to implement and sustain changes necessary to improve operations. BT was flexible, for instance, when National Rail Enquiries requested better quality and service delivery; in response BT replaced the operators' journey planning system a year ago. BT was flexible in changing desktop systems for better technology, and National Rail Enquiries was flexible in the timing for the change and details of how to achieve it.
With a background in financial services, Scoggins brings a different set of expectations and rigor around processes now handled by the three providers. "But they've been responsive in stepping up to the bar as I've been raising the bar," he states. "Of course, if there is something that they think won't work or something where they can achieve the same benefit for me in a different way that is better for them, then they push back and bring that up. It's a partnership."
"A successful relationship, first, is cost-effective," says Scoggins. "Then, it needs to enhance our brand, and the partners need to interact in a partnership basis. We want our partners to bring in new ideas and be innovative in ways that will be more cost-effective for us. We don't think it's a successful relationship if it's a supplier - customer basis and we have to rely on the contract."
"The challenges we're looking at for the next few years are different from the challenges of a few years ago," he adds. "The challenge then was to get someone to answer the phone in a reasonable amount of time. Now the challenge is to provide better customer service in a more cost-effective way. We're looking to BT for ways of doing that, and it can happen because we work together on this. Our harmony works extremely well."
Together, this outsourcing arrangement makes sure the wheels of progress stay on track and keep rolling forward at National Rail Enquiries.
Lessons from the Outsourcing Journal:
- Business transformation outsourcing totally revamped the call center process for the UK's National Rail Enquiries by consolidating its centers and using technology and best practices. The results went from so poor the agency was constantly fined by the government to routinely handling 170,000 calls on a Monday.
- The outsourcing relationship is successful because both parties are committed to the relationship and flexible in their demands.
- Outsourcing success is more likely if the buyer is clear what it wants up front.
- Business transformation outsourcing has turned a tactical job - getting the phones answered - into a strategic one - providing better customer service in a cost-effective way.