National Westminster Bank
The customer contact process during the account opening procedure in National Westminster Bank St James¡¦s Square Branch (NWB) is analysed using the Customer Processing Operation framework (CPO) in the following figure:
CPO for account opening procedure in NWB
The basic elements of the process include selection, point of entry, response time, point of impact, delivery, point of departure and follow up. Each stage is analysed in below sections:
The competition in the UK banking industry is tough and many players offer a broadly similar range of products. Selection is the stage that a customer chooses between competing banks based on their impression from advertising, recommendations from their friends and past experiences. There is an indirect customer contact before the operation where perception has been built into the mind of the customers. The NWB is perceived as a first-class reputation for quality of service, the customer contact process during the account opening procedure is critical to the start of an excellent new relationship. Hence, the performance of the operation must be matched with this ability in order to meet the expectation of the customers.
Point of entry
The point of entry is where the customer enters the operation of NWB ¡V here is the Records Section. There is a lack of clear directives or signage to guide the customers to correct position. The customers are quite often mistakenly queued for service at cashier position and then redirect to enquiries counter for proper service. Speed is reduced and quality perception is therefore suffered.
The response time is when a member of Records Section responds to assist the customer with the account opening procedures. It is obviously that there is a significant waiting time before the response time: the queuing at cashier position, redirecting to enquiries counter, redirecting to correct enquiry counter, and serving by an enquiries officer. The gap between the waiting time and response time directly influences the perception of the customers and exposes the ineffectiveness of the operation in NWB.
Point of impact
This is the first point of contact between the member of the Records Section and the customer. The operation in this stage seems effective as the four junior clerical staffs have good knowledge of the wide range of basic current account products, are able to tailor products to meet customer¡¦s specific needs, and refer the customers to other sections when necessary.
Delivery is the stage of account opening procedure including formalities in response to the customer¡¦s needs. It is ineffective and inefficient according to the customer survey. The problems are all happened at this stage including lack of proper explanation on the opening forms/formalities, no bank¡¦s standard account pack is provided, late delivery of cheque book and card, mistakes in recording personal details. The Records Section¡¦s morale and motivation are suffered due to the complexity and over-burden of work and hence, influenced the attitude of the staffs and in turn impacted on the level of service. As the social skills of the staffs is important in this stage, the poor performances are perceived to be inefficient and uninterested in the customer¡¦s needs.
Point of departure
This is the stage of enhancing the customer¡¦s perception or opportunity to correct the fault or to compensate the customer in some way. There seems no actions are performed at this stage. Therefore, negative customer comments are expected.
NWB has done necessary follow-up job by customer survey to obtain further feedback on customer¡¦s satisfaction.
The analysis above shows that there are two particular aspects of the branch¡¦s operation impact on each stage:
1. Design failure
Two design failures are involved:
The design of the operation is not user-friendly as the customers cannot interact with it easily. For example, there is no signage in the process and staffs are not available to direct customers to proper enquiries counter for account opening. This has impact on the stages of point of entry and response time.
The job of the Records Section is designed to be mix of tasks involving interviewing new customers, completing the internal formalities, maintenance of customer records, responding to general queries, opening accounts on behalf of other parts of the office, and personal selling. It is obviously that the work is complex and heavy loaded that impact the performance of the staffs on the stage of delivery.
2. Staff failure
There are errors and violations from the staffs. Errors are the mistakes of wrongly recording the customer¡¦s details on statements and cheque books. Violations are acts that contrary to the operating procedure. For example, the improper attitudes/manners of the staffs are in contrary to the quality objective of NWB. This has impact on the stage of delivery.
The failures indicates that there is quality specification-actual quality gap in the operation, that is, a mismatch between the actual quality of the service provided by the operation and its internal quality specification. The Records Section does not meet the objectives of speed, flexibility and dependability (failed to assist the customers to complete the basic formalities as quickly as possible at the customer¡¦s own convenience and operate the new account as soon as possible) and quality (failed to clearly explained any formalities and provide general guidance to the customers, and provide highest degree of accuracy in all the records). Eventually internal and external costs of defects increase.
Finally, according to the customer survey, 24 percent of respondents would not recommend the branch to others and the same percentage found the whole account opening procedure unsatisfactory. This shows that the overall performance of the operation have affected the perception of the customers and in turn impact on the selection stage of the process. It is therefore less effective to conduct the follow-up stage when unsatisfied customers are not taken care at the stage of point of departure, or in an extreme at every stage of the process.
In order to rectify the quality problems within budget constraint, total quality management (TQM) is recommended to improve the process of the Records Section of NWB. TQM embrace all the activities through which the needs and expectations of the customer and the objectives of the organisation are satisfied in the most efficient and cost-effective way by maximising the potential of all employees in a continuing drive for improvement (Walley et al, 2001). The following actions are suggested:
The first important issue is to rectify the wrong attitudes/manners that leads to staff failure. Due to a high degree of exposure to both external and internal customers, the staffs of the Records Section should be introduced and educated to be customer-oriented. They should understand that quality is not merely conformance to the standard procedures but is also satisfying customer¡¦s requirements. Although the priority of the improvement is at the Records Section, the concept should also be extended to company-wide. It is because quality is a chain to link the external customers and internal customers such as every departments and sections of NWB. Hence, quality must be right at every link in the chain to be effective.
The senior manager of NWB is required to commit to the TQM as facilitator, coach and trainer to the success of the program. Quality should be seen as a strategic issue from top to bottom. Focus should be made on identification and eradication of the causes of problems and therefore, the managers should emphasis on recognition of successes instead of tendency to assign blame on the staffs. The senior manager should co-ordinate with the administration manager to ensure that the staffs are equipped, trained and provided with the right environment to produce high quality, cost effective services. The design and staff failures should be addressed and rectified as following:
1. Design failure
Clear signage of each operation should be placed at visible place of the entrance to direct the customers to proper position. There should be clerical staff available to answer any queries from the customers. In addition, the process of the operation should be revised to have other sections taking care of the transaction of their own internal formalities. This would help to balance the workload within different sections of NWB but this will require careful consideration about system and manpower feasibility. Finally, the process of the operation should include point of departure to ensure customer¡¦s satisfaction before leaving.
The job should be re-designed to autonomous work team due to the complexity of the tasks. The members of the Records Section are required to allocate tasks between members, schedule work, quality measurement and improvement by themselves. For example, two members are responsible for account opening procedure, one member answers general enquiries, one member performs internal record maintenance, and everyone is required shifting between the tasks when necessary. This specialisation helps the members to reduce disruption from the other tasks and to increase the speed and quality of works, and finally increase job satisfaction, enhance flexibility and higher productivity. Assistance should be provided such as using part-time staffs in peak hours for successful implementation. It is also a good idea to use programmed answering machine to assist in general queries from phone calls.
The change to autonomous work team requires the empowerment from the management. The team should be delegated of authority to make decisions relevant to their level that will positively impact on NWB¡¦s ability to provide value to the customer. As the team is now taking the responsibility for quality measurement and improvement, they have the process ownership and sense of responsibility for the outputs they produce for the customers. Training is also required at this stage of how to manage their team as well as decision-making.
2. Staff failure
Education and training such as customer care quality training should be implemented to correct the behaviour of the staffs and error avoidance during work. Staffs should be advised on how to conduct themselves such as smile, be happy and polite when dealing with customers. The staffs should be trained to be proactive to prevent errors and aim at zero defects, that is, doing their jobs right at first time. This would eliminate the waste of time and cost for correction at later stage, while improving speed and quality of work.
Quality planning and control system
The management should review their quality planning and control system in order to enhance the above actions. The system is also used to guide the staffs to achieve the quality requirement in the company and meeting the customer¡¦s needs. Six sequential steps are involved:
1. Step 1: Define the quality characteristics of the service
The management should re-define and provide training to the staffs with the quality characteristics of the service required. For example, the functionality of the service should be speed, flexibility, dependability and quality. The appearance of the workplace and staffs must be cleanliness. The staffs should aim at zero defects to increase their reliability. They should be able to keep up with the changing expectations and needs of the customers to increase the service durability. Recovery must be fast to resolve any service failures. Finally, the staffs who contact with the customers must have knowledge, courtesy and sensitivity in response to the customer¡¦s needs.
2. Step 2: Decide how to measure each quality characteristic
Based on the defined quality characteristics of the service, the management should set some criteria of how to measure every quality characteristic. For example, in terms of the contact with customers, to what extent the customers feel well treated by the staffs and did the customers feel that the staffs were helpful.
3. Step 3: Set quality standards for each quality characteristic
The management then need a quality standard against which it can be checked, for example, the level of quality which defines the boundary between acceptable and unacceptable. These should be communicated to all the staffs so that they are aware of what they are expected and how their performances are appraised.
4. Step 4: Control quality against those standards
At this step, the management should develop some techniques to assist in controlling quality against those standards such as control charts.
5. Step 5: Find and correct causes of poor quality
When poor quality is discovered, find and correct the root causes of the unsatisfactory performance. The CPO framework can be used again to evaluate every stage of the operation process.
6. Continue to make improvements
The quality planning and control system should be reviewed and updated to make continue quality improvements.
Finally, the management should understand that TQM is a continuous improvement, which is long-term and long-lasting but in a gradual and constant change. Everybody in the organisation will be involved as it requires little investment but great effort to maintain it so people is important for the contribution. Therefore, the management should view training, education and self-improvement as an investment and essential for continuous improvement.
Walley, Paul and Slack, Nigel (2001), Operations Management Course Notes, The Warwick MBA by Distance Learning, UK
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