Meeting documents

Customer Access Programme Report

Date: October 24, 2005

Author: Julia Fieldhouse

Version Number: 0.6

1. Executive summary

2. Findings

3. Conclusion

4. Appendix One ; Customer Access Programme costs until 2008/09

5. Appendix two; Funding model principles

6. Appendix three; schedule of services transfer to customer access programme.

7. Appendix Four Acronyms

1. Executive summary

1.1 The purpose of this paper is to propose a funding model for the Council's Customer Access Programme as required by the Financial Plan members Working Group.

1.2 Customer Access Programme is a key element of the Council's change programme delivering the Council's corporate plan priorities.

1.3 In November 2004, a members working group reviewed the Customer Access Programme, and produced a number of recommendations. The group recommended that the full programme go ahead, but with a report to the Executive in September 2005, to inform budget decisions for 2006/07 and beyond. To inform that report, they recommend as follows;

The Planning Service will be used as a pilot for the transfer of services into one stop shops and a contact centre. Data and analysis from that will be used to guide the further transfer of staff or functions from other areas. The pilot should take into consideration processes, customer service, timing, HR issues, finance, IT needs, and performance issues. A report should be passed through the Scrutiny process and the Executive, by September 2005 with overall results, with special attention paid to financial implications and recommendations for the 06/07 budget, and to create a funding model that can be used to estimate costs/efficiencies for future transfers.

1.4 The Planning Service and Customer Services have been working together as requested to create a front office / back office split, looking at those areas identified. It is expected that functions will transfer to Customer Services in January 2006, following the successful implementations of Planning's End to End (E2E) IT system, and the corporate Customer Relationship Management System. As a result of the on going work recommendations have been made.

1.5 The recommendations are as follows;

Finance

a) There is a funding shortfall for 2006/07. The allocation of additional funds via the Financial Plan summarised in appendix 1 is agreed and additional allocations for future years are recommended for inclusion in the budget to be considered by Council for 2006/07 onwards, subject to further review as part of the forthcoming budget process (appendix one and paragraph 2.1.2). All additional sums should be increased to reflect inflation.

b) The funding principles in appendix two as endorsed by the Customer Access Programme Board are agreed to ensure Customer Services Libraries and Information is sustainable but efficiencies are realised in the back office. (appendix two and paragraph 2.1.2))

c) Service Level Agreements (SLA) between the front office and back office must be in place before services transfer, identifying responsibilities, service levels on both sides, expected volumes and processes for regular liaison and service development. These will be identified from BPR work. (paragraph 2.1.7.d)

d) A further report is made to the Executive in September 2006 to report on financial progress and inform the budget process in 2007/08. (paragraph 2.1.5)

HR

e) Recruitment to the front office is based on aptitude and ability and not current roles, and uses internal staff only in the first instance. (paragraph 2.2.2)

f) Staff whose jobs are at risk as a result of the transfer of functions to the front office are ring fenced to front office jobs. Those unsuccessful are placed in a redeployment pool in line with existing Council policy. (paragraph 2.2.3)

g) Managers at all levels will be asked to consider the use of temporary contracts for all new posts, enabling maximum flexibility in the use of the redeployment pool. (paragraph 2.2.3)

IT

h) IT projects expected to realise efficiencies through new working methods as a result of the IT should be implemented with concurrent business process engineering and culture change work to ensure that maximum benefits are achieved and staff confidence and commitment is high to the transfer. (paragraph 2.3.1)

i) BIS DG will take responsibility as upgrades and new applications are introduced, to ensure that a review will be undertaken to ensure that if CRM can be used instead of an alternative Service specific application it should be. BIS DG should manage this as part of their approvals process. If not, integration with CRM is a key factor in the Service's choice of application, the cost of which will be the Service's responsibility. (paragraph 2.3.2)

j) A CRM management information pilot is undertaken in 2006/07 in regards to using the data within the system with key Services, Councillors and the organisation as whole to improve performance (linking with balanced score card information) and resource allocation. (paragraph 2.3.3)

k) E-forms, E-Payments and the web site are developed with urgency to improve transactional capability. SLAs to include agreed levels of web information and transactionality for which services are responsible. (paragraph 2.3.4)

Business Process Reengineering

l) It is recommended that the BPR resource works alongside a range of other business resources such as change management and analysts before and during a transfer of functions ( paragraph 2.4.4)

Change

.m) It is recommended that Customer Services work very closely with each service where a front office back office split is to be introduced together with the culture project and BPR staff to ensure that all staff understand and are committed to changes. It will be the responsibility of the Service and CSLI to jointly agree where the front/ back split will be, and arrange a service level agreement that reflects that. The services will thereafter work in partnership to deliver services "end to end". (paragraph 2.5.1)

n) It is recommended that the Change Programme Management Group ensure integration between all change projects via a range of means including coordination of communications, shared project resources and effective programme planning (paragraph 2.5.2)

Performance and Customer Focus

o) It is recommended that regular reports should be made to Director's Group, Overview and Scrutiny and the Executive portfolio holder of front office performance. (paragraph 2.6.3 and 2.7.4))

Benefits of the programme

Improved access to services and information for the public

Choice of access channels

Consistency of service

Improved Council reputation

80% of transactions dealt with at the front line

Improved management information leading to improved decision making

Improved performance indicator results

2. Findings

Investment of additional funds

2.1.1 The costs of the programme has been analysed and modelled over a five year period. The model addresses three key objectives:

1. Establishing the capital and revenue (ongoing) costs of the programme

2. Identifying the increase in such costs above current provision within the Council's Financial Plan

3. Developing a funding model for the transfer of services into the access channels that provides for its sustainability

2.1.2 The costs of the programme overall and of the Contact Centre in the current and next three financial years are detailed at appendices one Funding principles agreed by the Customer Access Programme Board are detailed at appendix two on which financial projections are based. The financial model provides an estimated sum of £50,000 per annum from 2006/07 to meet the estimated costs of redundancies and 50% of the redeployment costs arising from the development of the Contact Centre. These costs will be reviewed as part of the detailed Business Process Engineering process.

2.1.3 The financial model for the programme as a whole (Appendix one) demonstrates a requirement for additional revenue and capital funds beyond the levels already included within the Council's Financial Plan.

2.1.4 The Financial Plan allocation in the current financial year is sufficient to meet commitments. In the next year (2006/07), and the following two years, additional Revenue funds will be required on current assumptions to finance the increased costs of the Contact Centre (net of funds to be transferred from Services) together with assumed redundancy and system integration costs. Opportunities will be sought to avoid any further call on revenue beyond that already identified within the Financial Plan. The program will aim to achieve this by slowing down the transfer of Services, and will review the success of these arrangements as part of the budget process for 2006/07.Additional capital resources (beyond those included in the current Financial Plan) will also be required in 2006/07 and 2007/08 in order to finance contact centre works and Business Process Re-engineering.

2.1.5 Further revenue and capital funds may be required to finance an increase in building operating costs and building works in respect of additional One Stop Shops, but these have not been built into the model on the basis that redevelopment activity and other projects may make a funding allocation within this programme unnecessary. The programme assumed three one stop shops. The one in Midsomer Norton is in place. One in Keynsham is likely to be a by product of Bath Spa University plans. A one stop shop in Bath is not at present costed or funded within this programme.

2.1.6 These estimated increases in cost are based on working assumptions that require further refinement. The allocation of additional revenue funds beyond those already identified within the Financial Plan should therefore be subject to a further review in September 2006 to inform the Council budget process.

Funding from Service Areas

2.1.7 The model incorporates a recommended "funding model" to be used whenever services are transferred from Service Areas into the Contact Centre. This can be summarised briefly as follows:

a. The activity to be transferred to the Contact Centre from Service Areas is agreed between the Services, making extensive use of Business Process Re-engineering ensuring the "end to end" process is included in the decision as to what is transferred.

b. The volume of activity be will be assessed in terms of the number of (Full Time Equivalent) staff hours required to support this activity within the Contact Centre

c. The Service Area will transfer sufficient funds Customer Services to meet the "full cost" of the number of staff that this volume of activity represents, These costs will be based on Customer Access Officer operative salary, on costs and overheads including training and development; accommodation and managerial overhead. Cash limits will be adjusted accordingly.

d. Service Level Agreements (SLA) between the front office and back office must be in place before services transfer, identifying responsibilities, service levels on both sides, expected volumes and processes for regular liaison and service development. These will be identified from BPR work

2.1.8 These costs from experience prove difficult to disaggregate from Services where the activity involved does not relate exactly to existing posts. As a result, BPR work will inevitably be required to reconfigure operations, but this will be dovetailed with the Work Smart project and change projects and aligned to it projects wherever possible.

2.1.9 The financial model detailed at appendix one is based on the assumption that funds will be transferred in this manner to support the additional staff employed within Customer Services. Figures are based on estimates of volumes of activity transferring from Service areas identified at appendix three. The schedule has been agreed by Heads of Services. It is assumed that no extra staff will be needed for one stop shops based on the current staff numbers already employed by Customer Services.

2.1.10 The financial model at Appendix One provides for current anticipated levels of demand. If demand rises or falls, CSLI and the Service will work together closely - with BPR if necessary - to ascertain the reason for the demand and the most appropriate way to deal with it e.g. improve on line transactionality, improved processes. However under the service level agreements, if the demand rises or falls beyond a prescribed level, financial adjustments will be made as part of this partnership process. Either a repayment will be made to the Service if demand falls, or an additional payment will be made to Customer Services if demand rises. However this will be in the context of understood cash limits and financial constraints.

2.1.11 The programme assumes that:

Unit costs will be lower through a front office back office split through economies of scale and improved processes, plus corporate and service investment in technology

Staff will be recruited according to aptitude and ability and not automatically transferred

Economies of scale will be made through the integrated access channels and use of customer relationship management.

Better use will be made of specialists' expertise through a front back office split improving both job satisfaction and efficiency

A greater proportion of transactions will be self served on the web in due course reducing costs and improving customer satisfaction

Services and Customer Services will be responsible for jointly identifying and making efficiency savings as transactions transfer through the use of business process reengineering

2.2.1 Human Resources issues identified were recruitment and retention to the front office, restructuring in the back office, terms and conditions in the front office, and the impact at a corporate level on work force planning.

2.2.2. It is recommended that recruitment is based on a formal application process to ensure that only staff with the appropriate aptitudes and skills are recruited.

2.2.3 Staff whose jobs are at risk as a result of the transfer of functions to the front office will be ring fenced to the front office roles, but if unsuccessful will be placed in a redeployment pool. It will be the responsibility of HR and Services to manage surplus staff. It is therefore recommended that HR work with all managers to fill new posts with temporary contracts, enabling the redeployment pool to work as effectively as possible. Note that the costs relating to these staff will be discussed between CSLI and the Service and an agreement reached as to how to meet them. If no agreement can be reached the costs will be shared equally between CSLI and the Service.

2.2.4 Training of current staff transferred to Customer Services has been difficult, due to the volumes of work, staffing levels, disparity of volume of work in different places, and aptitude of staff . The funding model has adequate training and development time (including back fill) built in to enable staff to have the tools and skills to carry out their roles effectively.

2.2.5 Organisational changes and their impact have been taken into account in the schedule of services timescale at appendix three.

2.2.6 Terms and conditions for the front office are flexible, in terms of for example working hours, enabling Saturday and evening work. This will be developed in line with the Work smart project. It is envisaged that the contact centre will run 8 a.m. to 8 p.m. Monday to Friday and 9 a.m. to noon on Saturday. The current volumetrics on which costs are based assume that contact will be spread over these extended hours. InfoPlus and the Guildhall already work extended hours and HR work underway includes job descriptions with extended hours.

2.3.1 The introduction of the Planning end to end (E2E) system will enable the public and staff to view plans, lists, property histories etc. from all locations as well as provide workflow functionality. Therefore, IT enables efficiencies as well as functions to transfer to all types of front office. However, to achieve the benefits, it is recommended that IT projects expected to realise efficiencies through new working methods as a result of the IT should be implemented concurrently with business process re-engineering, to avoid IT being layered onto existing processes.

2.3.2 E2E raises issues about integration of IT back office systems to CRM. The optimum solution for the front office is to have only CRM, rather than having to understand and use a variety of back office systems. However the complexity of some back offices requires specialist applications; such as Planning, and Revenue and Benefits. As upgrades and new applications are introduced, the project to do so should include an appraisal of using CRM instead of an alternative Service specific application it should be. BIS DG should manage this as part of their approvals process. If not, integration with CRM is a key factor in the Service's choice of application, the cost of which will be the Service's responsibility.

2.3.3 CRM will enable improved front office effectiveness, because it will hold all information about citizens / customers in one place. This allows holistic treatment of a customer / citizen and tracking of their transactions. However the real power lies in having a corporate data base of information enabling analysis of resource allocations, patterns of service requirement and potential outward and partnership activity. It is recommended that a pilot is run in 2006/07 to analyse and mine the data within CRM, cross referencing to other management information such as the balanced score card to feed back to Services about their performance, to provide information to some councillors, and to provide reports about patterns, trends, usage etc. to the organisation. Some members of the Corporate Issues O&S panel have agreed to trial this.

2.3.4 It is recommended that to coincide with the introduction of CRM, the web site is reviewed, and work is undertaken to assist Services to improve their understanding of the role of the web and populate their pages. In addition key e-forms are introduced by December 2005 to improve the speed and quality of the development of the front office. In conjunction with the new Communications Strategy and improved corporate branding and marketing, the web site is advertised more aggressively, so that customers that choose to can interact on line. It will also enable the front office through improved information, as well as improving knowledge management within the Council. SLAs between front and back office will include agreed levels of web information and transactionality.

2.4.1 Business process re-engineering (BPR) is a fundamental review of processes, often undertaken at the same time as IT implementations, but also used to constantly improve and refine processes. It has the capacity to deliver culture change as well as improved processes. There are different versions of BPR used throughout local government. To implement the customer access programme we have seconded two staff to become BPR officers, to work with HBS who would provide management and training, enabling a cascade of skills.

2.4.2 The funding model proposed allows for the salaries and on costs of the two secondees.

2.4.3 Work has been undertaken by the team in Planning and in Libraries, and has identified "as is" processes, with volumes and types of work that could be transferred to the front office. The evidence from this work has been factored into the costs in appendix one. It has identified potential FTE efficiencies when work transfers, but these have not been tested as yet. It has identified the call types that could be transferred to a contact centre, but current operational experience demonstrates that the transfer of transactions will do so on an evolving basis. BPR has also identified the information that needs to be provided on the web for staff and customers, and training needs for staff.

2.4.4 It is recommended that the BPR resource works alongside a range of other business resources such as change management and analysts before and during a transfer of functions. This is to ensure is a good understanding of volumes and types of transactions that can be transferred, informing the SLA, funds transfer and training requirements. BPR costs are included in appendix one costs.

2.5.1 The Customer Access programme is inter dependent with the corporate culture change project. Planning Service has in conjunction with this, used external consultants (Achieve Breakthrough), to bring about culture change to expedite the various changes and projects underway in the Service. It has brought about improved management focus, understanding of corporate and Service priorities and an increased customer focussed ethos. It is recommended that Services where a front office back office split is to be introduced, work with the culture project to ensure that staff understand and are committed to changes. Customer Services will work very closely with each service where a front office back office split is to be introduced, together with the culture project and BPR staff to ensure that all staff understand and are committed to changes. It will be the responsibility of the Service and CSLI to jointly agree where the front/ back split will be, and arrange a service level agreement that reflects that. The services will thereafter work in partnership to deliver services "end to end" through regular reviews, liaison meetings and staff swaps.

2.5.2 It is recommended that the Change Programme Management Group ensure integration between all change projects via a range of means including coordination of communications, shared project resources and effective programme planning.

2.6.1 Performance should improve as a result of the creation of a front office back office split, because of streamlined processes and the use of IT. The programme is interdependent with the Work Smart project, to help deliver the infrastructure and tools for this to be achieved in the back office.

2.6.2 Experience of Customer Services and Revenue & Benefits working together is that;

SLAs have to be tightly drawn and monitor performance and results

Shared results contribute to joint ownership

Regular liaison meetings need to be held to monitor the SLA and working agreements

Both sides have to take responsibility for training and tools to ensure they are effective

There has to be a high level of integration of front and back office to enable end to end processing

National bench marking of front offices within the public sector is now becoming established, and it is recommended that Bath and NE Somerset use these national tools to develop and implement best practice.

2.6.3 Regular reports should be made to Director's Group, Overview and Scrutiny and the Executive portfolio holder of front office performance. The corporate balanced score card will enable improved performance management monitoring.

2.7.1 The aspiration of the programme is to improve customer focus with empowered front line staff acting as advocates for the customer.

2.7.2 To achieve this implies systems and processes enabling staff to carry out their role effectively, as well as sufficient training and development giving them appropriate skills and knowledge. As discussed above, these are being developed or underway already or built into the financial needs of the programme.

2.7.3 Customers and stakeholders needs must be built in to day to day operations as well as forward planning. Customer data is gathered regularly via Voicebox as well as for specific occasions such as the opening of Info Plus. Use is also made of national surveys to inform service development.

2.7.4 Customer and stakeholder needs must be built more formally into the programme via regular surveying of each access points users, as well as vehicles such as Overview and Scrutiny panels, focus groups and Services' own customer data. Regular reports should be made to Overview and Scrutiny as well as the Executive portfolio holder.

3. Conclusion

3.1 The programme is a key element of the Council's change programme delivering the Council's corporate plan priorities.

3.2 As requested, work has been undertaken with the Planning Service to identify how best to implement the programme, and to develop an appropriate funding model for the whole programme.

3.3. Recommendations have been made in terms of resources, HR, IT, BPR and change management.

3.4 The programme must be carefully integrated with other change work in order to maximise the benefits that will arise from all of the work, and ensure an improvement in performance and service to customers.

4.  Appendix One; Customer Access Programme costs until 2008/09

*This figure could be reduced if the schedule of service transfer at appendix 3 is slowed down, although benefits of investment in technology will not be made as quickly if so.

** Note that no accommodation costs have been added to this financial model. Three one stop shops are the stated aim of the programme. The first in The Hollies, Midsomer Norton is complete. The one in Keynsham is likely to be part of the Keynsham Town Hall redevelopment in conjunction with Bath Spa University. The one stop shop in Bath is still subject to ongoing discussions about The Guildhall. In addition, the Work Smart project, the reception rationalisation work within Customer Services and other projects currently underway mean that it is very difficult to anticipate accurate costs. Therefore in the report for 2007/08, an update will be provided.

5. Appendix two; Funding model principles

1. All customers-facing services in the Services listed in appendix 3 will use CAP front office services unless exception agreed by Chief Executive, with the goal of improving customer service. Services will be phased in within the agreed schedule at appendix 3;

2. BPR will be used to identify activity to transfer to CAP and staff costs of that activity;

3. Full staff costs (including management & support costs) will transfer to CAP. Service efficiencies will be achieved through `non-cashable' elements (e.g. Increased efficiency and effectiveness of managerial and professional time);

4. When net `cashable' savings are identified by CAP, they will go into a Financial Plan contingency for re-allocation. Targets for `cashable' savings will be set.

5. SLA's will be put in place, base lined on volume of activity at transfer and budget transferred. Volume increases/decreases will be reflected in revised charges to Services thereafter;

6. A `recruitment process' with ring-fencing in first instance of "displaced" staff will be used to identify staff transfers. An interim pool for redeployment should be created, and this should be managed by HR;

7. The employment costs (including if applicable redundancy and pension fund costs) of these staff will be met 50:50 by the Service from which they have been "displaced" if staff are not redeployed, and Customer Services. The financial model does not provide for this additional cost.

8. Council's Redeployment policy will apply. Pool of redeployment opportunities to be created by use of temporary appointments to existing clerical/admin posts across the Council unless exception agreed by Chief Executive;

6. Appendix three; schedule of services transfer to customer access programme.

NOTE; Agreed by Heads of Services July 2005.

Rationale for including services in a front office and suggested schedule of services for inclusion 2006/07 and 2007/08.

The decision to include a service within the front office will be based on;

High volume routine or repeat activity which can be supported by a standard response toFAQs.

Identified customer demand for specific services.

Performance indicators suggest that BPR would be likely to generate service efficiencies.

External drivers such as e-government targets

Identified transactions that can be bundled together to improve customer service around life events

New IT systems force a review of existing service delivery

PROPOSED SCHEDULE OF SERVICES

7. Appendix Four Acronyms

BPR - business process reengineering

CRM - customer relationship management software

CSLI - Customer Services Libraries and Information

CAP - Customer Access Programme

E2E - End to end planning system

HR - Human Resources

IT - Information Technology

SLA - Service Level Agreement