BPO and Shared Service Centres - New Work Culture:

Delivering on optimum turn-around-time

Ajith Dandeniya

Creation of BPO's and Shared Service Centres (SSC) appears to have become a common trend in the last 12-24 months.

There are larger conglomerates in the country looking to create Shared Service Centres to reduce their cost structures and take advantage of centralisation of their common activities that run across their organisations such as Human Resource (HR), Finance and Accounting (F&A), Information Technology Services (IT) and even Call Centre Activities.

Business process outsourcing operation in progress

Whilst this is certainly the way of future and will be the catalyst to showcase BPO capability to the outside world and external clients, just centralising your business processes will not suffice in creating an efficient Shared Service Centre (SSC) operation. There has to be a change both in the "look and feel" of the SSC/BPO operations and in the creation of a dynamic culture within the SSC/BPO operations that have to be productivity focussed.

In terms of SSC/BPO, Centralisation simply does not mean "what it states on the Can". Just getting all of common activity under one roof and using the same "laid back" working approach that we commonly find in "back office" activities within and organisation will render your SSC/BPO a complete "White Elephant".

Service Level Assurances

If organisations are serious about the creation of a SSC initially and later on to convert such to attract external customers both internally and globally to become a BPO, then serious consideration has to given to creating a working culture that is in-tune with the 21st Century. There has to be a complete Re-vamp of what we are generally used to today.

Let's look at some of the key aspects of this change.

Service Level assurances that is given to the client comes in various forms. These assurances in its simplest terms are nothing but "promises" to constantly deliver an improved sustainable service.

They can be sub-categorised to the following Key Performance Indicators (KPI's):

Turn-Around-Time (TAT)

All activities done by the SSC/BPO will need to have a TAT Target.

In other words, a promise given to the internal/external client (the company that SSC/BPO is servicing it's work for) to indicate for example that "SSC/BPO will turn around a specific task within three working days of reaching them". The percentage time that the TAT is adhered to will need to be measured.

Reverse Turn-Around-Time (TAT)

In some cases, it is not possible for the SSC/BPO to carryout its task due to some "referral" that will need to be made to internal/external client. In which case, a Reverse TAT target needs to be obtained from the client. For example this may be that "Client will turn around a specific task referral made within one working day of reaching them". The percentage time that the TAT is adhered to will need to be measured.

Productivity

All work performed by SSC/BPO will need to aim at achieving 100 percent productivity. For example, if we consider a payroll activity within Finance and Accounting "Back Office" and lets assume that per payroll processing task the target "Touch Time" (or "Handling Time") allocated is 60 mins.

In a month if the SSC/BPO has processed a 1000 payroll activity tasks, the time they should have taken collectively should be 60,000 mins. In reality however, if the SSC/BPO staff achieved to perform the 1000 payroll activity tasks in 59,650 mins - then your overall productivity for the task would run at 100.59 percent (60,000/59,650). Another example would be that, assume for a work item with a target time of 25 mins per item, If the team is actually taking 26 minutes per item on average, then productivity calculation would work as follows (Target Unit Touch Time) 25 / (Actual Unit Touch Time) 26 = 96.15%). The percentage of productivity will need to be measured.

Quality

Quality of work has to be measured continuously in the SSC/BPO environment. The quality of work carried out within the SSC/BPO has to consistently measure above 90 percent in general and in certain tasks where the accuracy has to be absolute key may even measure around 95 percent-98 percent and where accuracy is absolutely critical even measure at 100 percent.

The Quality models that will be created will have to be jointly agreed with the internal/external client in terms of the questions in the quality model, scoring & measuring criteria. Then having put the measure in to action, the SSC/BPO Quality auditor will need to be "Calibrated" by the internal/external client and certified for being able to identify errors successfully. The Quality levels initially will be two-fold, the Quality of the SSC/BPO handlers/agents and the Quality Calibration score of the SSC/BPO Quality Auditor. Once the SSC/BPO Quality Auditor reaches 100 percent consistently for a period of three-four weeks, then the internal/external client will be satisfied with the fact that the SSC/BPO auditor is fully capable of identifying any errors made (if any) by the SSC/BPO handlers/agents. Once after the SSC/BPO Quality Auditor is fully Calibrated & certified, then the internal/external client will hold 3-monthly calibration sessions to ensure that his auditing capability still remains in-tact.

The number of cases the SSC/BPO quality auditor will audit will depend on standard industrial measures of 95 percent confidence levels with 50 percent-90 percent bias. The percentage of Quality will need to be measured.

Having measured all the Service levels on a continuous basis, it is important that that SSC/BPO report such targets on a monthly frequency to the client to showcase progress.

Such measures in general are not adopted as common practice in general organisations to the same extent but in a SSC/BPO environment it becomes absolutely critical. Such measure will drive the culture and the behaviours of employees (handlers, agents, or customer managers as they are called in the "New World") to drive operational efficiencies through productivity in addition to cost efficiencies gained via centralising operations.

"Look and Feel" of Operational Centre

The other important aspect that drive culture and the dynamism in the SSC/BPO world would be the "look and feel" of the operational Centre. In creating such operational centres, the organisations will need to be mindful of creating a working environment that is almost "fun to be" rather than a purely a "place of work" - it almost has to work on the "work hard - play hard" ethic. It is essential that the "look & feel" of the working environment "attracts" staff to SSC/BPO.

It is generally not uncommon to see SSC/BPO with facilities such as "Break Out" areas furnished with seating areas, vending machines, Pool tables, Various indoor games and Internet kiosks etc. That creates the culture that their place of work is a "fun place to be".

In turn, it attracts youth, it creates sense of belonging, improves job satisfaction, reduces attrition and above all increases productivity.

Ajith Dandeniya is a freelance BPO Consultant with over seven years of BPO experience that includes setting-up BPO operations in Sri Lanka as well as currently working in the UK on advising large global organisations of outsourcing strategies.

Ajith as the Vice President of IT & Projects, was part of the management team who set-up WNS's operations in Sri Lanka in 2004 and currently responsible for transitioning RSA's Insurance processes to India via leading global supplier Accenture. He is a First class honours graduate in Computer Engineering with MBA from Bristol Business School in the UK.