Call Centres cost more — John Seddon LEAN Approach.
The Council have been rolling out the LEAN approach across a number of Council services. UNISON has repeatedly raised with a number of senior managers that this initiative is at odds with the One Barnet approach to delivering services.
Writing on the Conservative Home Blog “Benefit claims are too complicated for call centres and computers” John Seddon writes:
“Plans for the Universal Credit will create the same failures as we are seeing in HMRC: millions of unanswered calls, backlogs and errors – costing the taxpayer billions. The proposals – a website service and a national call centre – would work if peoples’ needs were simple and unvarying; taxation and benefits are anything but.
The move represents ministers’ wrong-headed belief in economies of scale; ministers think that these ‘lower-cost channels’ (web and phone) will mean a lower-cost service. In fact, because of the inherent variety in demand (people’s problems are different) the plans will increase the volume of transactions, just as these ideas have in HMRC.”
Full article here
Benefits too complex for a Call Centre model
John Seddon letter to: Rt. Hon. Iain Duncan Smith MP and Lord Freud 31st January 2011
“It would appear to be a simple proposition: take costs out of service provision by putting the provision online and/or in a call centre. That these ‘channels’ represent cheaper transactions is not in doubt. But it does not follow that overall the service will be cheaper to deliver. The crucial factor is the complexity of the service. When what is being delivered is simple and unvarying, moving it to telephone or internet channels may be effective. When it is complex and variable, however, it is an expensive mistake, driving costs up and the quality of service down. We can show many examples to prove this, of which the most relevant is housing benefits, of which more later. Housing benefits are not simple and unvarying; even less so will be the SUC.”
Full article here
Take a look at John Seddons evidence to the Treasury sub-Committee investigation on HMRC here:
“HMRC’s failure to pick up high volumes of calls to call centres are likewise indicative of high levels of failure demand, which will cause increasing costs and reflect poor-quality services for users
3.3.2 The assumption behind standardisation is that it will reduce costs. This is false. Management is concerned with reducing transaction costs – the cost of a telephone call or other discrete process – but the true costs of service are end-to-end from the taxpayer’s or agent’s point of view. Standardising work simply prevents the system from absorbing variety. It increases the volume of transactions (causes failure demand) and thus drives overall costs up.
4.2 Call centres, back offices, shared services, standardisation, specialisation, transaction-cost management, people management, IT-dominated processes – all these features of today’s scale approach to service reform can be shown to drive overall costs up.”
Barnet UNISON Comment
We agree that the Call Centre model will lead to an increase in ‘failure demand’ which will drive up costs. The Private Sector will recognise this as a bit of a ‘cash cow’