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Today building societies and banks are using every conceivable tool in their armouries to identify and deliver new ways of gaining competitive advantage through improved customer service. Being first to market with attractive products supported by superior services is the key to success. One of the techniques used by the Nationwide building society to improve both customer service and speed-to-market is computer-based predictive modelling tools supplied by Lanner Group.

Background

The Applications devised by Lanner Group for Nationwide go beyond simple simulation. They provide sophisticated business modelling to help the society to develop new services and support decision-making and resource allocation to optimise and streamline operations.

"The society has worked with Lanner Group for many years to implement advanced computer-based predictive modelling applications that help managers assess the potential impact of proposed changes in business processes, introduction of new products or services and modification in customer behaviour," says Martin Davies, Managing Consultant with the organisation's internal management consultancy, Nationwide Business Consultancy (NBC).

Lanner Group has provided a range of business modelling services since the early 1990s. Working with members of NBC Lanner Group's own technical and business consultants have devised and implemented a series of applications that have been used successfully to support major new business initiatives.

All About Customer Service

Nationwide has identified customer service as a key business differentiator. On a day-to-day basis the ability to respond quickly to a query, answer telephone calls promptly and accurately, provide high quality information about new products or reduce queuing times in branches is vital to customer satisfaction levels.

When Nationwide is considering a new product or service, it uses every technique available to research the market and assess the implications for the business. One technique that NBC uses is the development of business models that aim to give a true reflection of the processes involved so that the impact on the overall business can be predicted.

These business models are then used to test hypotheses and to check the effects of changes in the original concept. In some cases, the model can contain a number of highly complex and interrelated variables, conditions or business rules that can only be analysed sensibly using computer techniques.

NBC and Lanner staff are able to try out new ideas using a 'what if' approach that enables them to modify parameters to see if any relevant advantage might be achieved in the real world.

Call Centre – Making it Easier to Talk

A recent example of the partnership between Nationwide and Lanner Group involved a sophisticated application that helped streamline customer call centre operations shared between the society's Swindon and Northampton offices.
Between them the two centres manage well over 300,000 customer service or telephone sales calls a month.

Each centre is organised into multiple staff groups, each with different skills and working hours. Although this structure is designed to give a close match to the general call patterns, the ongoing objective is to deploy the right number of advisors in each pool over time so that calls are answered and closed successfully within demanding customer-focused response parameters.

Customers often call with more than one query, and therefore need to speak with more than one advisor, which may mean routing calls between staff in different sites transparently to the caller.

The situation is further complicated because call length and overall patterns can be deflected from the norm by Nationwide's own advertising campaigns, the time of the day, week, or year. Other circumstances such as changes in the interest rate or announcements in The Budget can also bring about changes in demand.

"Our focus on customer service meant we needed to devise a model that helps us match supply to demand," says Martin Davies. "The model is built on the concept of ongoing patterns with peaks and includes parameters such as incoming call levels, length of wait and overall call time. It needed to deal with highly complex routing, but the real challenge was to make it general enough to be reconfigured by staff simply and efficiently in the real world."

Because of the diversity of incoming calls for different product types, each with its own profile, the call centre requires a sophisticated call distribution and flexible resource model, for which traditional staff scheduling software is unsuitable.
Instead, Nationwide required a planning tool that could be used by the call centre manager to find proactively the best advisor allocation. Lanner Group devised a computerised model with a user-friendly graphical interface. This allows the call centre manager to take forecast call volume, and experiment with line splits and advisor assignment by altering the rules for call routing by editing the data in a flowchart.

Reports are designed on a 'management by exception' principle so that the model predicts not only the overall service levels that will be achieved but also where additional resources would add the most value.
"The result is more effective call routing. We can try out changes before they are implemented and we can optimise headcounts," says Martin Davies. "The world changes, so the model needs to be adaptable."

ISA - Getting it Right For the Customer

When the Government announced the new Individual Savings Account (ISA) in 1997 as a replacement for PEPs and TESSAs Nationwide sought to use its experience with the earlier products to get it right first time and bring its new ISAs to the market quickly.

Research suggested an initial rate of up to 7000 applications would fall to a lower level once demand for the new account had passed its launch peak. This meant that more staff would be required to cope with relatively high workloads surrounding the April 1999 launch. There would initially be demand for information and sales skills, followed by a shift towards advice and customer support as sales patterns matured.
Nationwide required a predictive model that would help it plan staffing levels and decide on the appropriate blend of permanent and short-term staff to enable it to meet its customer service commitments but without overstretching resources or adding unnecessarily to costs.

The first problem was to set up lots of new accounts in a short time, but running them presents a different set of requirements. With staffing levels initially predicted to be 70 full-time equivalent staff, even a small percentage saving would more than recoup the investment.

Lanner was commissioned to implement a tool to predict the number of staff required consistently to achieve the service levels specified by Nationwide's Central Administration Unit (CAU). The model needed to take into account all of the CAU's activities including account opening, account servicing, customer support, quality control and query handling, all of which equated to significant levels of activity.

The model was built using input from key staff such as line managers and systems experts to develop a map of all key processes. Some information from the launch of PEPs and TESSAs was used to build the model, although the ISAs involved new business processes and staff now had a wider range of more advanced technologies at their disposal for the sales and support phases.

Lanner Group transposed the conceptual model into its computerised equivalent to allow Nationwide to carry out its 'what if' analyses of its ideas. "The model helped managers to focus on the real issues and assess the need for and capability of resources," says Martin Davies. "It drew minds together and ensured we were clear about the processes involved and the implications before we made any commitments."

"The outcome was that we were able to match working patterns, resources, expertise levels, and the mix of full-time and part time staff, to predicted sales volumes."


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Nationwide Building Society is the world’s largest building society, one the UK’s largest savings providers and a top-three provider of mortgages in the UK.

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