Rod Newing hears how proven results and a clear goal are essential to success
The politicians were saying we were too large and too fat," says Hugo Kramer, director of the new corporate service centre of Rijkswaterstaat, the government body responsible for managing the infrastructure of roads and waterways in the Netherlands. "Overhead accounted for 25 per cent of our workforce and costs and it had to be reduced to 15 per cent."
Under pressure to put more of its resources into its maintenance programme of the heavily-used road and dyke infrastructure, Rijkswaterstaat (RWS) centralised 85 different support functions in 17 offices in only 18 months, reducing overheads by 40 per cent and achieving high user satisfaction. This was only possible by working with a consultancy that had already carried out a similar project in London.
When it was founded more than 200 years ago, RWS had a branch in each province of the Netherlands. As a result, it had 17 separate offices, all providing the same support functions. To escape the inefficiency of the old structure, the organisation decided to centralise these overhead services. Based in Utrecht, it would provide support for human resources, finance, communications, legal and facility management functions.
"We needed to change fast, but we didn't have the experience or knowledge to plan and execute it quickly," says Mr Kramer. "We needed consultancy experience from a proven project, so we looked for successful government organisations that had implemented a similar solution."
London's Westminster City Council had implemented a multifunctional shared service centre, with support from PA Consulting Group. RWS went through an invitation to tender process and PA Consulting Group was appointed. "The appointment was a matter of trust, not cost," says Mr Kramer. "We wanted a proven solution and there are not many multifunctional shared service centres."
The appointment was made in March 2004 with a plan for the shared service centre to become fully operational in only 18 months. This involved defining new processes, adapting systems, testing them and training 800 people who then had to be transferred.
The new service model was designed to encourage users first to seek an answer to their query themselves on the corporate intranet. If this was unsuccessful, they would contact the call centre. Only if it could not be resolved at this stage would they be transferred to an expert. PA provided the knowledge, but supplied an average of only five consultants during the project. RWS wanted to maximise the involvement of its own staff and harness their knowledge of its organisation in applying PA's advice to its own system of working.
"At the beginning we came up with the problems and PA came up with the best proven solutions," says Mr Kramer. "Because of our lack of knowledge we were very dependent on them and it looked at times as if they were managing us. However, they had the expertise to train our people and made it easy for us to learn quickly and efficiently. They soon transferred their skills and eventually we started to take the lead."
The result was a 40 per cent headcount reduction, saving 750 full-time equivalents at a cost saving of €45m per year. The call centre dealt with 50,000 requests for support during its first year of operation. It resolved 85 per cent of all questions and received an average online customer satisfaction score of 70 per cent. The specialists no longer waste time on easy questions and can focus on more complex work.
The contract with PA was on the basis of time spent, not a fixed price. It came to less than a twelfth of the first year's saving.
"We have a lot of experience of fixed price contracts, and the cost is always higher than we estimated, because we cannot specify the total work in advance," says Mr Kramer. "There are always changes that give rise to unforeseen work that has to be negotiated at an additional price. It is much easier to work on a trust basis, where you manage the consultant's work and balance their cost against the benefits. A fixed price is easy if you know exactly what you want from the consultant, but if you cannot be certain you end up paying much too much."
Clear deliverables were defined for each stage of the project and reviewed in evaluation meetings, but the relationship was characterised by trust and continuous informal communication. "When there is trust you work in less formal ways," says Mr Kramer. "It is much more expensive if you mainly communicate formally, because you have to prepare documents and sit in meetings. Trust is a better way to manage such processes than formal reviews of the contract."
RWS had to change radically and fast. PA provided the initial skills, but RWS did most of the work itself. Its people learned very fast and in a short time were much more professional in their skills.
"You have to have a clear goal and find a partner with proven results," Mr Kramer concludes. "It isn't the number of consultants, but the quality of their input. They must be quick and effective at teaching your own people, as that is the best way to get results."
