Customer Care Center Outsourcing Transaction Improves Customer Service and Saves Client a Projected $1.6 Billion During the 8-year Term of the Contract

Problem

customer-careA major domestic wireless carrier was looking to reduce its customer service costs while simultaneously improving its customer service experience, which had been consistently rated in the lower half of its peer group. The carrier was open to considering all available options in developing a solution.

Approach

Working directly for both the Chief Operating Officer and the Chief Services Officer, Pace Harmon practitioners were engaged to perform an initial situation analysis, followed by a project to outsource all call center operations. The following approach was executed:

  • Pace Harmon performed an initial analysis of internal costs and performance, and benchmarked these costs against other wireless carriers (including both insourced and outsourced models). The analysis demonstrated that the client's costs were considerably greater than what could be achieved by utilizing an outsourced solution, thus confirming that current performance was not market-competitive
  • Following a decision to explore outsourcing, we developed a comprehensive service catalog of activities, a rigorous financial model for current operations, an assessment of service levels and a detailed characterization of call volumes and patterns
  • We developed and implemented an integrated communications strategy for stakeholder groups to proactively identify and mitigate potential issues and maximize the chances of success of an anticipated outsource decision
  • We led the development of a detailed RFP for call center outsourcing services, including the accumulation, consolidation, and prioritization of requirements along functional, operational, technology, implementation, quality assurance, contractual, and financial dimensions
  • Following the response from the suppliers, the team evaluated each of the proposals and normalized the responses to ensure a fair comparison
  • We facilitated a series of workshops with the most qualified supplier, and held several rounds of term-sheet negotiations to resolve as many major issues as possible ahead of a down-select decision
  • Based on the quality of each supplier's overall response, the team provided a supplier analysis and down-select recommendation to senior client leadership, and facilitated several executive review sessions to achieve consensus
  • In simultaneous negotiations with the two leading contenders, we developed negotiation strategies, co-led negotiation sessions with the client, and drove the agreement to conclusion
  • We developed an implementation plan and deployed robust contract management processes to enable a smooth transition to the new business model

Outcome

The resulting outsourced service exceeded the client’s requirements and vaulted the client into a market-leading customer satisfaction position. Simultaneously, the customer service improvement was coupled with a reduction of over $200 million dollars per year in operational costs. Pace Harmon helped the client:

  • Complete the project – from strategy formulation to final agreement – in under 4 months
  • Achieve a relatively seamless transition of over 4,000 employees and 6 call center locations to the outsourced supplier
  • Obtain exceptional commitments from the supplier to maintain and rapidly improve existing service levels with extensive financial and process-based incentives
  • Incentivize the supplier to aggressively implement automated tools and “self service” technologies that reduce service costs by structuring performance target and gain-sharing rewards into the contract
  • Develop a related technology alliance program, which resulted in a joint go-to-market strategy that yielded significant incremental revenue
  • Establish a foundation of an excellent relationship between the client and the supplier that helps them deal with ongoing service and contract amendments