Cultivating a growth culture - examples from the public sector
With austerity dominating budget planning across the public sector, ‘growth’ is probably bottom of every agenda. Faced with the mammoth task of reducing its structural deficit, the UK’s public sector is wrestling with the dual challenge of cutting costs without reducing the quality or accessibility of key services for citizens.
With little room to manoeuver, pioneering Councils are turning to their outsourcing partners to transform employee culture and implement private sector best practice.
“In a way, growth is an inseparable part of any public sector outsourcing partnership,” says Martin Ruane, Head of Transformation & Change, Public Sector, at Arvato UK & Ireland. “That’s because you also need a growth orientated culture to be able to do the same things with less resource. It’s about being creative, flexible and working collaboratively with all parties involved to find the best solutions.”
“I spent nearly 20 years working within the public sector before joining Arvato,” Martin explains. “The rigours of public sector operations make change hard, but a private sector partner can help instil a culture that encourages the council to unlock the different resources it already has – whether that’s empowering employees to make the change themselves, involving third parties such as citizens or suppliers to identify ideas for improvement, or joining up citizen data to increase revenue. This is really at the heart of what outsourcing does, not just cutting costs.”
Service direct for improved citizen service
One of Arvato’s key innovations implemented across its public sector partnerships is its Service Direct model. The objective was to make processes core customer service areas such as revenues and benefits as easy and as efficient for citizens and the council’s administrative teams.
By listening to citizens and customer service agents, Arvato identified the core problems with the current system and how it could be improved:
Many services first collected information from a customer and then passed it to the back office for processing. A few days or even weeks later the customer received the outcome usually in the form of a letter; however in many cases the initial information was insufficient, meaning the customer had to be contacted again to provide more evidence, followed by another round of hand-offs between front and back office.
Under the new service direct model, customer service agents were trained to be able to deal with citizens’ requests at the first point of contact, over the phone or face to face. By gathering and processing all the necessary information there and then, the transaction is resolved far more quickly.
As a result, quality and consistency have improved, hand-offs and rework have been reduced, the demand for back-office resources has decreased and the number of citizen contacts has been cut by half.
Council debt recovery to increase revenue
Faced with significant budgetary pressures, local authorities’ income streams have become crucial to their financial management. Arvato brought its significant expertise in credit management from the private sector to help speed up debt collection, create more efficient payment processes and to help improve the accuracy of discount applications.
By analysing data to identify households with a history of late or missed payments and applying customer segmentation techniques to separate out households that ought to be able to pay versus those struggling to pay, Arvato was able to take different approaches in terms of dealing with either category. Arvato also drove forward each Council’s Direct Debit and e-billing platforms to make payments easier for residents and minimise process costs.
By teaming up with information provider Experian, Arvato used data to identify any discrepancies for households receiving the single occupancy discount on Council Tax, saving hundreds of thousands of pounds for each council.
Lean six sigma training to unlock employee expertise
As part of encouraging the cultural changes needed to help drive efficiency improvements, Arvato trains employees within its partnerships with Lean Six Sigma – a package of courses designed to help them better understand the processes behind their day-to-day roles and use this knowledge to identify changes that can deliver efficiency savings.
Arvato trained the 170 TUPE-transferred employees from its Chesterfield partnership up to White Belt standard in Six Sigma. A further 15% were accredited to Yellow Belt, while a selected group is being developed to Green Belt practitioner level.
Lean reviews conducted across all transferred services enabled employees to use their new Six Sigma skills to identify process inefficiencies, streamline workflows and reduce costs.
After training all 100 employees at Slough Borough Council to white belt standard, 85% of participants said they went on to make a positive change to the way they worked by removing inefficiencies from their daily routines.