The core processes of a large Customer Debt Collections department for a multi-national utility company involve identifying customers who are in payment arrears, and adjusting payment methods and plans to better suit the customers’ needs, whilst eliminating their arrears as quickly as possible.
This is a very focused and busy team, who are under pressure to resolve debt in a diverse and often challenging range of customer circumstances, whilst maintaining alignment with the organisation’s core values on customer care and experience.
Despite significant and continuing efforts, aged debt had increased by 25% in a year to circa €110m, and bad debt write-off was €15m in a single year. This was, in part, driven by the following challenges:
Their proposed solutions, which on paper should have worked, were failing at the test phase. They quickly realised that the cause was the processes being followed by the department lacked robustness and consistency; they were not standardised. They attributed this to the department not having a process orientated mindset.
As this was primarily a cultural issue that could not be resolved through a project based methodology, PMI were asked to support the programme by deploying performance excellence.
"With performance continuing to deteriorate, fundamental changes were required in order to achieve a better result."
We began work with the leadership team, kicking off with a 2-day workshop. This was a big commitment for the department head and his team; however, the value was quickly recognised in terms of providing space to gain alignment and consensus around:
In addition to the primary goal of reducing aged debt, the leadership team acknowledged a number of enabling goals that reinforced Performance Excellence Deployment as the right approach:
The identified Process Owner, Process Manager, and Process Operator teams embarked upon a three-month assignment to embed process management within their area and processes.
Designed on the principle of ‘train then practise’, the process teams received training to build their role capability with on the job coaching support. This blended approach really gave staff the confidence to jump in with both feet, taking the classroom theory, and immediately applying it in the reality of their daily work.
The assignment goal was to enable each team to bring their process to the point of initial standardisation, with the necessary daily management systems in place to then maintain and improve those standards into the future. This involved the following key activities:
Encouraging the teams to take a structured and collaborative approach to these activities meant that the benefits, both hard and soft, began to appear very quickly into the assignment:
In the space of just 12 weeks, with 53 people attending formal training, 8 key improvement themes with a financial impact were identified during the deployment, and implemented with an estimated opportunity of £1m in debt provision reduction, £204k cost to serve saving, and 8.5 FTE time saved.
For those teams involved, there was a marked increase in employee satisfaction and feelings of engagement. The leadership team recognised a significant increase in debt awareness across all teams, and their understanding of their own roles in debt reduction. But perhaps more importantly, a new level of motivation and skills have been embedded, which means that the teams are excited to see what else they can achieve and what they can improve next.
Richer conversations are being held amongst everyone involved in this deployment. They are considering ways in which they operate and manage their processes and thinking about the best way to achieve the desired outcomes. Debt is being discussed regularly, which is driving focus and ownership on staff.
The time and effort put in by myself and the operators has paid off. I can see from quality checks that we are finally managing as a team to identify issues correctly, and everyone seems to be a lot more confident in the actions that they are taking.
I actually can’t believe how helpful the process map is. I feel more confident now I know what I’m looking for and what to do with the accounts. And if I’m unsure I’m more than happy to ask for help now.
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