Is your Human Resources team losing you money?

HR transformation isn’t a project any more – it’s a division that’s constantly looking to evolve itself to suit the needs of the business.

Many organisations are starting to realise there is a lot of transactional activity which could be dealt with in a better way, and enable HR staff to focus on the more value adding, customer-centric activity.

More is being demanded of HR as a function; both in the retention and development of talent, and the relationship with new outsource vendors. Many of the challenges currently stem from systems in place that aren’t always ready for change.

In a recent chat with Grant Baker, General Manager of People and Culture in Shared Services at Energy Australia, he raised some interesting comparisons to share around the area of talent: “If you take the top 200 employees within the company, they’re worth around $58 million dollars. Let’s just imagine for a second that figure was in a share portfolio. You’d expect a lot of robust reporting. Just because it’s humans they don’t seem to have the same value.”

Where to focus

To focus on learning, development and retention, HR will need to improve policy and processes, making self-service accessible – enabling managers to do more and reduce the traffic that comes into the HR function.

This gives HR time to look at what is core to the things which are essential to the business. Enhancing the learning and development offering is a great example – at Energy Australia they’ve been really clear on their approach to broader talent management. Grant explained the wider impact on the team: “HR doesn’t have to be the huge team it used to be; we used to have business partners doing work which could or should have been done elsewhere, either via shared services or automation.

Value in using data

HR metrics is an area which hasn’t previously been done well. Energy Australia shifted the dial for reporting, looking at things from a different point of view: “If we were to quantify the talent in the business clearly from a pay point of view, it’d be a massive number. It’s extraordinary to think we don’t know enough about the people that contribute to that number.”

You need to have a real handle on people, but also how it stacks up from a benchmarking point of view. Take SuccessFactors for example – it’s those tools to really demonstrate cost per hire relevant to the market,” Grant explained

Challenges

This rapid period of change won’t come without its challenges beyond the obvious IT change. The behavioural challenge can have a serious impact on the bottom line of the business.

Grant highlighted the two key sides to this; HR employees and employees previously serviced by HR:

“Managers will have to learn to embrace self-service and be a little less reliant on the former HR business partner for the activities that should be stopped or owned elsewhere.

“There’s a wider challenge for the HR team as well; you’ll be taking out a large part of their quick win work which is extremely valued by their business unit. They’ll now find themselves having to say no to things and really challenging that same unit.”

Join Grant Baker at the HR Transformation Summit 2014 where he’ll be delivering the presentation ‘Driving Culture And Enhancing Employee Engagement For Your HRSSC’.

Low cost marketing innovation – 4 essentials to success

It’s tough to be a marketer. It’s hard to allocate cash for innovation, but at the same time rapid consumer behaviour changes and increased competition make it a bit tricky to stand out.

All is not lost. We can once again get our creative juices flowing without breaking the bank (sorry…). I recently took a look at the world of Financial Services and it’s safe to say a few obstacles need to be overcome; the allure of the non-banks and a heck of a lot of expectation from the customer.

With that in mind I recently caught up with Simon Clarke, Head of Online Banking Suncorp.

Simon and the team have a clear focus: “We’re delivering our new core banking capability. It is a major strategic initiative for us and will enable a new generation of customer experience through our simpler and more agile platform.”

“At more of a group level, we are constantly looking at ways we can improve the customer experience across our key areas of banking, life and insurance. We want to ensure that customers have a consistent experience no matter what product they have and touch point they engage us from.”

The team have a smaller budget than the major banks, encouraging (sometimes forcing) Suncorp to think outside the box to build and optimise customer experience. This approach can often far outweigh consultation and reading through insight all day.

So how exactly are they doing this? Here’s Simon’s recipe to success:

Sweat the small stuff

“Post GFC, innovation has been always associated with research and development. But in more recent times, people and customers have come to realise that innovation isn’t always about the newest technology or gadget. It’s often just tapping away to remove a step or part of a process.

“We often find in banking that we build, design, rebuild and redesign technologies very quickly due to tech improvements and resilience. But we often neglect to review the process which the technology facilitates. That often leads to a slick looking application underpinned by a very long, frustrating seven-step process to do something that should only take two.

“We have a goal in which we constantly go through customer journey maps and ask: ‘Does that need to be there? Is it just because it’s always been there?’ As we optimise our websites, online banking platforms and mobile channels, we have the opportunity to challenge and improve the process. We also blend with user experience design so every word, click or tap culminates in a simple, easy to use engagement.”

What to do today: Innovate incrementally. Start with a small pain point with your product, system or process. Pull it apart and put it back together 2% at a time. Overtime, these 2% add to 20% very quickly and culminates in achieving high customer satisfaction at low cost and risk.

Mix it up

“We often find it amusing the costs that come out of delivering innovative technology or simply keeping up with customer demand. All of our banking platforms are designed and built in-house.

“This allows for very tight ‘product teams’ to form with a mix of business and IT people to take a challenge, sketch it, design it, user-test it, build it, secure it and get it out the door within a few days. We have feedback forms that are monitored and answered by product owners so every idea, complaint or comment goes straight to the person who can make a decision and execute on that idea or fix that problem.”

What to do today: Speak constantly to your team to understand roadblocks and attack them one by one to form a lean, effective team. Take the time to also listen to your customers. They should influence and be a part of your strategy and execution, not just an end user.

Look past the fancy reports

“From a design and UX perspective, again we use the same tools that a small business might to perform UI online tests, surveys and lab tests using basic video conference equipment.

“Some of these tools can cost $150 to run and the feedback and insight we get is amazing compared to a $10,000 report. We love using these ‘guerrilla tactics’. From an execution side, it allows us to try a lot of new things and if some don’t hit the mark, there isn’t a swollen budget sitting at the other end.”

What to do today: If you need insight, there’s plenty of it out there for free. Form an idea, build it out with creative and knowledgably colleagues and put it to the test. Learn fast and do it cheap. If the idea doesn’t hit the mark, gather your learnings and put it towards your next opportunity.

Persist

“Having a ‘fail fast and learn’ culture can be difficult to achieve and persist. But with the right attitude, enthusiasm and decision-making capability, we can strive to build the easiest-to-use websites and online banking platforms and see the effects through direct feedback.

“I think the biggest challenge is building the right culture and acknowledging that innovation doesn’t need to be cutting edge development. Simple touches each day accumulate to building an innovative model that customers can appreciate each time they engage us.”

What to do today: Build a safe working environment that allows your staff to thrive in generating and testing ideas. Isolate risk adversity so that it is managed but not impacting your ability to innovate and drive user experience.

Join Simon at Digital Financial Services 2014, he’ll be delivering the Case Study ‘Banking Channels at Speed through Lean Innovation’.  Visit www.digitalfinancialservices.com.au or tweet @digifinance

Inside Johnson & Johnson: Transforming the HR function across 14 countries

After working across the SSON portfolio for a couple of years now, I’ve seen few key trends starting to emerge.

One that really stands out is the heightened focus on the HR function. I first noticed the theme during the 2013 Shared Services and Outsourcing Week, which saw a huge increase of HR professionals in the room. Since then, it’s continued to be a hot discussion topic. So, what’s causing the spotlight to shine on HR? And, perhaps more importantly, how can this core function that affects every single employee help drive a smarter business?

To uncover some answers, I recently caught up with Cherrie Porter, Senior Human Resource Director at Johnson & Johnson. She’s responsible for ensuring the successful transformation of the Human Resource function in 14 countries across Asia Pacific. Cherrie is going to be kicking off our HR Transformation stream during Shared Services and Outsourcing Week Australasia 2014 and it’s looking set to be a packed room.

We discussed the changing role of HR, the importance of taking a staged, tailored approach and the pitfalls of change management during a transformation project.

SSO Week has seen massive growth in number of HR attendees, why do you think that is the case?

It’s one of those things where I don’t know exactly what’s caused it, but I think some of it is driven by the fact that HR is becoming more sophisticated as a function and the professional HR people now working in that function really do want to be part of the strategic activities, the more value-adding activities rather than the pure transactional piece.

HR wasn’t always seen as a profession that required qualified people in the role. In its own right, it’s now starting to be elevated to where it should be.

Why was the decision made to standardise processes at J&J over the 14 APAC countries? Did you face any integration issues?

We’ve approached it on a couple of different levels. Historically J&J has operated as a very decentralised company, meaning that in any one of those 14 countries there could be multiple operating companies.

In Australia there are four, in China 13, in Singapore nine, each with a different number of companies; it’s meant that there has never been a head of J&J in Australia.

Firstly, we standardised processes, not across Asia Pacific as a whole, but at a country by country level. From there we said: ‘OK Australia, here are your four ways of doing different transactions for HR, pick one. You can start with a fresh sheet of paper; just pick the one you think is the best option and build on that.’

The focus is currently on China, there are nine different ways of getting compensation information to Payroll, and there will soon be just one.

Technology also had an impact. Our aim has been to keep things as simple as possible, so we developed a template of how we thought a process should be. That template was taken to different countries to establish if it could work. Sometimes we’d have to change a few things depending on legislation, etc. For example, some countries would require paper copies of certain documents.

Aligning processes to fit the technology template was a challenge; we were faced with some real push back. These new electronic processes interfered with the way things had always been done for years and often required a few cultural shifts. We really had to challenge the value-add on each process and ask how we can become more efficient and effective in the way we’re operating.

Our mantra has been ‘simple, standard, global’ and we really just questioned if it doesn’t fit any of those three… Why not?

Using a phased approach clearly helps achieve success. How does your change management strategy fit in with this and how have you been ensuring continuity and support throughout?

Change management is always tricky, it’s relentless. I’ve been at J&J now for nearly eight years and I’ve been working on this transformation for all that time.

A few years ago we decided to move everybody onto a SAP platform, reengineering all the processes, harmonising all the policies, using an outsourced vendor. We went live with that in several markets.

It lasted three years, and in April 2013, we brought all those countries back into J&J. They’re still running on SAP but now they are under our control, we run them and don’t have our third party vendor doing the transactional work anymore; it’s set up internally.

In the meantime we had to deal with all those other countries that weren’t on SAP.  We had to be flexible enough to say, we made one decision and it’s not really working for us and it’s time to change course, but that doesn’t mean we’ve thrown everything out. We’ve tried to leverage the best of what we had before and revisit that strategy, the vision and the direction. Our vision and direction of the transformation was right (moving transactional work into one area so HR partners could focus on business strategy), we just needed to make some changes to our approach.

As a result, countries went backwards and forwards so they’d probably been on a bit of a rollercoaster. The more progressive HR operators in those countries have jumped on board and got on with it to see where it’s all going. There are still people that are clinging to the old way of doing things, or believing that this is just another fad and if they sit it out long enough it will all go away.

For us the key was to just bite chunks off and move at a pace people are comfortable with. Some of our staff have been here for over 25 years, so it was important to not rush in.

At a country level, China has always been the big challenge for us. It’s the fourteenth and last country that’s coming on board and it’s where we are currently. They’ve looked at the project and seen that it’s not going away and as a result are much more bought into it.

Success builds success; the momentum has led to people more willing to participate. The softer approach, the small steps rather than large leaps, has certainly helped us.  It wouldn’t work everywhere, but it’s something that is working for us, never lose sight of the big picture. We learn from each other and we listen.

Have you been faced with any unexpected obstacles on your journey? Are there any lessons learnt you could share with other organisations on the same route?

Some of them are a little bit sensitive as it’s our own internal doing, such as the battle between HR and Payroll (I’m sure we’re not the only ones that have that). It leads to a lot of politics and has definitely been one of our biggest obstacles, working cross-function, internally.

Change management has also been an obstacle in terms of how people react when things don’t go well. Looking back to the start of our journey, it wasn’t going well with our third party vendor and a brave call had to be made to bring it back in-house. Unfortunately after that, we were almost too scared to move, so we went into this 18 month period where not much really progressed. The countries that had been on the brink of going live were told to hold for two months, it turned into almost two years where nothing happened.

Choosing your external partners wisely makes a huge difference. Spend the time finding a really good fit and someone you can trust and really work with; that makes all the difference if they understand you and what you’re trying to achieve.

Finally, you’re delivering a case study presentation during the Australian SSO Week 2014, taking place in June in Melbourne. What will the audience be able to take away from your session?

If I put myself in the shoes of someone attending rather than facilitating that conversation, it’s those lessons learned that can help the journey. There’s no right and wrong to any of this, it’s just keep your eyes wide open. Ask yourself, if I’m about to embark on this journey what do I need to be on the look out for? It may not be exactly the same as what happened at J&J but it’s still a really good question to have on a checklist. Some of those watch-outs and some of the big ‘ah-ha’ moments, those are the things people will walk away with.

I know myself when I’ve sat in these sessions, it’s reassuring to hear that others are having a similar experience and that you’re not going crazy! It’s a great experience to be with like-minded individuals and take away a few things that are potential pitfalls and traps. I can hopefully help people avoid going far down the wrong path. I don’t know there’s any way to totally avoid it but the eyes wide open is a good way to describe it.

Getting true value from outsourcing: the recipe for success

I first bumped into Jane Stafford, Executive Manager for Banking Process & Optimisation at Suncorp Banking during our Process Excellence event last year,  then again during Shared Services and Outsourcing Week. Jane certainly knows a thing or two about outsourcing – she’s been in the banking and finance industry for more than 20 years, spending years managing the optimal blend of insourcing and outsourcing strategies and implementation for business processes.

Jane’s current role is to manage Process Ownership for Suncorp Bank, monitoring, measuring and delivering business improvement strategies with a focus on process simplification, cost reduction and improved customer experience.  I recently caught up with Jane ahead of here workshop at SSOW 2014 to delve into the key ingredients for achieving an optimal blend – helping other organisations to maximise the true value of outsourcing.  Jane shared her insights on how the landscape has shifted, paving a new way for vendor relationships. Take a read below:

I’m absolutely seeing a need for outsourced providers to continue to be relevant by looking at providing services that sit outside of data entry. Automation is really kicking off in in our industry. We’re seeing far more centralisation of corporate functions (generally the higher value activities like analytics). That’s going have a flow-on effect into knowledge process outsourcing.

We’re seeing the impact of increased regulation occurring. That puts a squeeze on our margins and puts the spotlight on process innovation. The knock on effect to providers is they need to be able to innovate with end to end outsourcing and continue to drive down the cost that sits within that process through lean methodology or something similar.

A few years ago there was a lot of low hanging fruit for outsource providers, if they could do the data entry, they had business. However, client needs are changing as a consequence of a number of different factors that puts pressure on them to go up the value curve in terms of what they can offer from the service point of view.

There are a few fundamentals when looking to cement outsourcing and drive relationships that open up new levels of value:

Keep the ingredients fresh

The secret is building capability in-house to manage optimal blends. Optimal blends means that you are constantly looking at your landscape, making decisions around what is appropriate to outsource, automate and keep in-house.

It’s not as simple as locking in on those three things; it’s constantly evolving depending on what’s happening within your business, what’s happening within the environment and what’s happening in your innovation stakes. We have found most success in just having that management capability pool.

We’ve set up that infrastructure to manage an optimal blend for both onshore and offshore. My team are constantly monitoring dashboards to work out what’s on the horizon in terms of automation onshore or offshore. That involves rolling things back from time to time, and having a framework based on strategy rather than just reacting to what we had done previously.

Set the right temperature

Look at all the decisions that will need to happen to support the way you’ve decided to go. It starts by establishing your core competencies – all the decisions are based around that and people will be challenged if there’s no understanding of what they are.

Executive sponsorship is crucial. There needs to be an appetite to manage the people and cultural components, because every decision you make around in-house, automation or outsourcing has knock on effects that need to be managed throughout that change period. You won’t get your benefit if that isn’t addressed very early on.

One of the key things we learnt five or six years ago is that it’s okay to have a strategy that’s learnt during outsourcing, but if the business is not ready in its own maturity and its own journey, where you haven’t intervened enough to support a new culture, that culture will eat your strategy anyway.

Clean up as you go

Be clear on what your drivers are if you’re choosing to outsource. For us, it was about cost efficiency, labour arbitrage and accessing scale from the outset. But the more and more I get into it, the less important those factors are to me personally, the more I’m actually looking to have providers perform innovation, lean  and refine our processes to remove waste from them. If you don’t have that, your processes end up being old and full of waste.

There’s never a truer analogy of garbage in, garbage out, than when you’re doing an outsource transition…

Set the timer, watch it rise

There are some key areas where you can unlock huge value in the vendor–client relationship: 

  • Move away from master-servant relationships: We’ve tried to co-locate and second people from the outsourced organisation into our organisation, coming to an arrangement with our provider where we actually have contracted in someone from India to be in my team for 12 months. They are actively working in Australia, onshore, understanding the business end-to-end. It takes trust to open your books completely, but the sharing of information and depth of understanding about what we can achieve for our customers is far deeper.
  • At an operational level: Position your outsource provider as an extension of your current team, just sat in another location. Include them in your reward and recognition programme – our outsourcers tend to really enjoy that. It’s still a work in progress for us, but I think it’s the next big thing, to challenge both organisations to position themselves around the commercial structure. That’s where you’re really putting everything on the line.
  • Think beyond the service levels: Our commercials are still structured around SLAs, turnaround times and individual processes. That inhibits everybody from being free of worrying about whether or not a penalty is going to apply. The future is about contracting to end outcomes and saying, “You know what? We don’t care if it’s 24 hours or if it’s 48 hours, this is the outcome we are looking for”. The onus is on both sides, it takes trust and the other party to be willing to not take advantage of that trust too.

In a crowded marketplace, is it eBay’s time to shine?

If there’s one organisation that knows about rapid online growth, it’s eBay.

Founded in 1995, eBay Inc. connects hundreds of millions of people around the world every day, empowering them to explore new opportunities and innovate together. eBay’s entire business model is about helping Australian businesses succeed – enabling commerce wherever that may be. As the lines between online and offline continue to blur, eBay Inc works in partnership with retailers to help them stay relevant to their customers in the new retail environment.

Unlike Zappos, whose core business was built on customer service, and Amazon, where shoppers can log on and find virtually anything at a clear, set price. At eBay, customer service was at the mercy of sellers.

The giant online marketplace has quickly stepped up to the mark, re-shaping its core business to evolve the customer experience by aligning it directly to the overall business goals.

eBay.com.au offers brands, retailers and sellers of all sizes a complementary channel to reach more customers and drive sales. “We are focussed on providing retailers with a high traffic sales channel to complement existing stores, websites, social and mobile channels. eBay is a marketplace – and we do not compete with sellers on our platform – rather we are committed to developing innovative solutions that help merchants turbo charge their online and mobile presence.” Explained Cathal Murphy, Director of Customer Experience at eBay Australia and New Zealand.

According to Roy Morgan research, 7.3 million unique visitors come to eBay.com.au in an average one month period. Reaching this vast audience has become an important part of many Australian retailers’ multichannel sales strategy.

“The business grew and expanded rapidly. As a result, customer experience wasn’t our biggest strength in the beginning. Over the last couple of years, the company is more aligned throughout the organisation to the customer experience. It’s part of our whole evolution cycle,”

I recently caught up with Cathal to find out exactly how this is working in practice.

Overall strategy

As a company matures, there’s more focus on the customer experience and retaining existing customers. The key thing is to put the customer in all decisions made within the business.

We’re ensuring that everybody, across the whole organisation, has some shared goals and objectives. Everything we do needs to be on brand, ensuring that the customer has a voice at the table when the decisions are being made. Product, marketing, PR – all decisions made will be based around that customer voice.

Finding the silent sufferers

The ownership is on the people that look after the customer experience side, to bring the customer to life in the business.

We’ll do that through the stories that we tell, bringing customers in, using our online network, and organising customer events. It’s the on-going communication around customer experience and the customer journey.

We get a lot of input from the customers that contact us, but that’s a very low percentage of our overall user base. One of the things we’ve been working on is expanding our listening posts, so that we’re not just making decisions on the customers that do contact us. It’s starting to look at how we can understand and interact with those customers that never contact us – could they be silent sufferers?

It’s those customers who might encounter a problem, give up and never use eBay again. We want to hear about those experiences. Customer visits, going to where our customers are, running focus groups, monitoring our social coverage and really putting ourselves in the shoes of the customer by using the product ourselves – it all helps.

We’re trying to really look at our organisation to find those pain points and challenges, and leverage that information to see if there’s anything we can learn. Overlay that intelligence with the data we have and we can start to identify weak spots and areas requiring our focus.

Acting in the middle ground

The nature of our business is quite unique. Our buyers and sellers communicate with each other and we’re often not privy to that. Our role, particularly with our sellers, is to ensure they’re communicating effectively and delivering a standard of customer service that matches our values.

If we see that a seller has low communication ratings on their feedback, we’ll work with them to really analyse and identify what they’re doing wrong. At the end of the day, even though that communication isn’t directly with us, it’s a reflection on our brand so we want to improve that where possible.

Engage early for business growth

Another focus for us is early engagement to truly understand who our customers are – how can we support them and how can we enable them to be successful?

With our sellers, we’re trying to move away from just being reactive and responding to an issue when they get in contact. Instead we’re going to put triggers in place to help identify potential issues or opportunities earlier.

We can then reach out, educate, coach and mentor our sellers, helping them to grow and scale their business.  In turn, that’s going to create better experiences for our consumers. It’s one of the areas where we’ve invested a lot.

Consumer expectations are constantly changing. Many sellers need somebody to mentor them and coach them about how they need to adapt to remain competitive.

Sometimes, the service they were offering two or three years ago might just not be competitive any more and they’ll need to change their business model. That’s where we have a large role to play, being a mentor and coach for them.

If at first you don’t succeed…

The root of excellent customer experience is in your employees. I’m always pushing my team to look at how we can be bolder and more creative around the customer experience. Let’s do the experiments, let’s do tests, let’s measure the ROI. But ultimately, let’s not be afraid to push the boundaries and try new things.

Several organisations just don’t take enough risks. It’s something I really encourage in my team – it’s ok to fail.

I think the question that we need to ask ourselves is: Are we failing enough? If we’re not, it probably means we’re not being bold enough or being creative enough.

It’s absolutely fine to fail.

Next level customer experience

We’re going to keep evolving and working to better understand our customer’s needs. Segmentation is going to be key in offering a differentiated customer experience.

It’s really understanding who our customers are and what their needs are, and then providing them with an experience that matches those needs

It’s also about how we move faster and how we move quicker, because competition is heating up. We need to be very agile around decision making, and be able to debate, decide, and deliver.  And we need to be able to really create an environment where it’s okay to fail.

Interested in more case studies around customer experience? Check out our 7th annual event

4 key steps to transform from claims process to claims experience

As the phrase ‘Customer-centricity’ shows no signs of slowing down, I recently caught up with Richard Poole, Head of AustralianSuper account at TAL Life to see what this means for the Claims industry. He explained:

“We’ve taken on a very customer-centric view across our entire business. The customer is at the forefront of everything we do; our processes, our policies and our products and most importantly in all of the personal interactions with our customers, or our service.”

The 4 key streams to focus on:

  1. Build relationships with your customers

Knowing our clients well means we can understand what products they actually want and need. We then also have a better understanding of how can we satisfy that need while still being efficient and cost effective. It’s about looking for the win-win.

  • Building a relationship is relatively straightforward when dealing with our direct customers, because we have a connection with them from day one. From the first contact we establish that relationship directly, and it stays all the way through the life of that customer. Hopefully, for their sake it won’t result in a claim, but if it does, they’ve got a consistent experience with us all the way through.
  • With Retail customers (adviser-driven), the relationship is generally owned by a financial adviser. So we may not get involved with these customers until the time when a claim needs to be made. Our role here is to manage the process as quickly and simply as possible, supporting the client’s relationship with the advisor.
  • It can be harder to build a relationship with our Group customers, because their insurance comes packaged with their superannuation. Similarly to Retail customers, our role generally comes into play when they need to make a claim on their policy. This is when we have the opportunity to build a relationship, by providing support through a difficult time.

Over the last 12 months, we’ve been working on those relationships to identify how we streamline that process and establish strong direct links to the customer.

Ideally, the customer will be able to make one phone call, or submit a claim through one channel, preferably with us, while we can keep all other interested parties informed in real-time.

  1. Clearer communications

The key issue around product is always going to come from the terms and conditions, and the wording of those products.

We’ve come a long way in the last few years to have more plain English in our products, with the days of fine print and ambiguous wording well gone. The key is to make it as easy as possible for the customer to understand exactly what they’re buying, and to help them understand under what circumstances they can make a claim on that policy. It’s also our responsibility to make sure the policy has very clear entry and eligibility rules, to ensure the validity of a claim is unambiguous for claims assessors.

Plain language cuts down on confusion and miscommunication between the customer and ourselves. Everybody knows exactly what’s expected of them, and there shouldn’t be any surprises.

  1. Provide a seamless experience

Wherever possible, our processes are agnostic to the channel. We try to build in as much automation into those processes as we can while retaining the flexibility to ensure we’re managing exceptions and preserving the customer experience.

Standardise as much as you can, keep your claims process system updated and keep refining it. We’re currently on Year One of a three-year project to build our new claims system into the business. It’s bringing in another level of automation, including being able to segment claims into the appropriate areas of complexity.

  1. Add value

The next step in modern claims processing is to begin to add value to the customer to assist their return to wellness. The way we’re doing that now is by really focusing on the customer and their needs very early on. It’s that move from reactive to proactive, and being there right from the start of the journey.

Regional Airports: The time for change has come…

It’s been nearly 20 years since the federal government distributed airports to local councils and local bodies to own and operate. In that time, the demand on regional airports has radically changed.

Just earlier this month Bundaberg Council released figures for 2013 showing a 17.4% increase in passenger numbers compared to 2012. The airport provides a gateway for tourism as well as providing hundreds of jobs and commercial opportunities for local residents.

So what’s the problem? Well, airports are ageing and starting to decay in some areas. If they are going to match demand for both services and tourism, some serious transformation is needed to turn airports into cash flow positive enterprises.

Airports are currently feeling the pressure from demands, operations, new regulations, safety, security and even changing aircraft types.

This has left many operators in search for knowledge, looking to uncover the real challenges facing the future operation of airports. It’s time start planning for the long term.

To gain some insight, I recently caught up with Bill Burke, CEO of Mildura Airports and  frequent sounding board for CEOs needing advice; he expressed the urgency for long term transformation planning:

Plan for the long term

“People often see airports as long-term assets that need little or no maintenance. All of a sudden, the day arrives when runways start to deteriorate and assets that had been considered indestructible suddenly start to fall apart. It then takes a lot of capital to fix them.

“It’s difficult to give specific time scales on when improvements are needed within the airport lifecycle. Just consider that every asset has a design life and once that benchmark is passed, the chances are some capital is going to be required for the repairs.”

Bill emphasised how it’s not just the runway that needs to be considered, terminals also decay and technology provides both new opportunities and new challenges:

“It’s about really understanding the needs of your airport as a whole and considering the wider vision beyond individual repairs and developments. Here at Mildura, we’ve recently completed the development of a new terminal building. When we presented it to the community, we received criticism over the size and direction the airport was taking. When we communicated the long term vision for the airport, exploring the logic of the layout, potential for expansion and how it fits the circulation of expected people, we managed to win the community round.”

“The terminal will allow the airport to operate for the next ten years, without any problems. Looking beyond that, I also built expansion opportunities into the plan, allowing the airport to evolve into the next phase. It will build on the facility that’s already here and be fairly simple and cost effective. The terminal will be able to double in size to accommodate growth.”

Be prepared to look for capital:

“Even with your long term plans in place, airports require large levels of capital to be sourced to adequately develop into an ‘airport of the future’. We can’t hide from that. I’m in the position currently where I need $20 million for a runway upgrade, without that capital the runway won’t be able to operate and provide the same level of service as it has before.”

Bill warns that too many people are just riding out the lifecycle and could land themselves in hot water:

“Too many airports – and I’ve seen too much of it in my career – have done little in the way of planning, they’ve never really looked far enough forward to think of where they might be right outside the square.”

Strive to achieve your potential

It’s not just asset management that will take regional airports to the next level, more has to be done to maximise existing revenue streams that could help secure larger capital and keep the day to day operations cash flow positive:

“Too few airports look at their operation in the bigger picture and put down a footprint and work to a blueprint that is expandable and can be developed in almost any direction to satisfy almost any requirement.”

“Regional airports need to look at everything they can. For some airports, there is opportunity for utilisation of the land resources – for industrial, commercial, maybe even sometimes retail activities”

“They need to also look at other commercial activities in terms of the facilities they have; in some cases they could lend themselves to aviation infrastructure uses.”

“You’ve got to identify what potential there is and what the market might be. There’s no point making a lot of noise and knocking on a lot of doors if you can’t deliver a product. I think every year an airport just has to evaluate its own potential.”

“Look at location and what’s happening in the wider community, try and work out where the airport fits in and where there’s potential to tap resources, do something bigger and better.”

“Airports that thrive in the future will be willing to embrace change, think long term and embrace knowledge.”

Bill will be joined by some of Australia’s leading airports during the 2014 Regional Airport Development Conference. The agenda has been designed to assist you on your journey of building and commercialising the airport of the future.