Farewell Contact Centres, Hello Online? Chris Hopson 30 June 2010

1. Farewell Contact Centres, Hello Online?Chris Hopson30 June 2010

2. HMRC • Customer base – nearly all individuals / businesses • 100m calls a year call centre operation: one of largest in UK • 43m unique web visitors during 09/10 • 87m electronic transactions during 09/10 • One of Government leaders in e-channel e.g. Self Assessment online, VAT online, PAYE online • From taxes to tax credits and customs duties to NMW enforcement What have we learnt?

3. 1. There’s a lot of avoidable phone contact to eliminate • Initial desk benchmarking exercise • HMRC call classification • HMRC examples • Misdirected calls account for up to 10% of calls on some lines • Customer reaction to outputs (letters, forms, returns) • Progress chasing calls accounted for 17% of all calls in 08/09 • It works! Early HMRC demand management impact

4. HMRC call classification

5. 2. There’s a lot of phone contact that can easily be migrated to customer self serve • Basic information seeking contact • Simple “rules based” enquiries • Simple transactions • HMRC examples

6. 3. And customer self serve doesn’t have to mean online • Telephony self-serve • Basic IVR messages • Transactional IVR • Artificial intelligence • HMRC IVR functionality • HMRC examples • Tax Credits renewals customer information • Changed benefit payment dates • Tax Credits renewals channel and time shifting • 10-15% of all calls now handled by IVR • Advantages of phone self serve vs online

7. 4. However, looking at contact, start with the customer... • Customer segmentation • Always needs help (ANH) segment drivers • Literacy; low ability to manage finances; low IT access or skills; elderly; disabilities; time of distress; low English language ability • ANH most likely to need human interaction • Hypothesis on majority of ANH customers: • Cost to serve increases • Customer transaction cost increases • Error rate increases • Tax yield / entitlement take up impaired Without human interaction

8. Customer Segmentation • Willing and able • Needs help around life events • Always needs help • Rule breakers and potential rule breakers • Complex and high net worth customers • Criminals

9. 5. ... and there are some transactions where human interaction in unavoidable... • Example transaction types: • Complexity of product/process • “Rules” need flexing to match particular individual circumstance • Judgement needed • Competing claims • Where customer wants double checking reassurance • HMRC examples • Phone or F2F channel needed

10. 6. ... and there are some big barriers to migrating phone contact online In addition to building new online channels and getting take up: • Effective signposting • Customer behaviour change needed • Appetite / acceptability of more radical options to force migration • Workforce reshaping consequences ......so a quick, complete, rush to self serve and online doesn’t feel like the universal answer at the moment

11. 7. Migrating contact online presents many fantastic opportunities... • Basic information to web • Simple transactions to e-channel • Accessing / amending “your” record • Progress chasing / tracking • HMRC and other Tax Authority examples

12. 8. ... but there are some under appreciated issues in addition to digital exclusion • Back end system integration cost • Customer volumes, product complexity, age of estate • Access to investment funding • Short term cost of rise in phone contact levels • “Build IT and they will come” doesn’t work • Customer strategy, marketing, mandation, incentivisation etc. • Interdependencies • Risk of fraud • Capability and expertise

13. 9. Moving to lower cost, lower functionality online services is the new paradigm • High volume, high investment cost, high functionality services • Investment funding restrictions • Transactions with lower volumes: • Lower investment cost • Lower functionality • Build basic capability and allow business to adapt and adopt • E Forms • Rules based technology • Viewer technology • HMRC examples

14. Enhanced Usability • Web Style interface • Dynamic Presentation • Based on Paper Version • Business and Customer Demand • Can be developed in-house • LH Types of Form • ‘Wizard’ • Fill & submit • ‘Intelligent’ • Fill & print • ‘Interactive’ • Reduces errors and omissions • Print & Fill • Can lock ‘not applicable’ fields • Can calculate fields • ‘Dumb’ • Can check data validity • Legible Customer Entry • Can be made Saveable • Can be made Accessible • Current Situation

15. In conclusion • Huge scope to reduce volume of adviser handled phone contact: • Cut avoidable contact • Migrate to telephony self serve and online • But some customers and some transactions continue to require human interaction • And there are some big challenges to migrating contact online and to self serve • Investment, capability, back end system integration • Do telephony self serve and low cost, low functionality e products like e-forms / viewers offer a low cost, easy to achieve, route? • In transition • Smaller contact centres, but not farewell yet • More online services but not sole delivery channel