User satisfaction as KPI in outsourcing
Wegener applies financial incentive to boost customer satisfaction
Wegener is the Netherlands’ largest publisher of regional newspapers and free local papers. Since 2005 the internal automation for the workplace has been fully outsourced to Getronics. The workplace strongly determines the labour productivity within the media company. Journalists and designers, for example, are critical users. Many of the users were seriously inconvenienced by the delay in the rollout of the new workplace at the start of the outsourcing programme. By the time the most pressing problems were resolved in 2008, a decision had to be made on whether to extend the contract. Cancellation was not a sensible option, but neither was continuing along the same path. That is why it was decided to not only measure user satisfaction levels via ITsat, but also to attach substantial weight to the outcomes with respect to Getronics’ financial incentive. The introduction of ITsat in April 2009 introduced a rising trend, with the satisfaction average reaching an all-time high of 7.0 in December 2010. MT member Gijs van Oorschodt is closely involved in the implementation of ITsat from within Wegener ICT Media.
How did you manage to defend the extension internally with so much dissatisfaction?
“The concept was based on maximum use of Citrix, as it would generate a lot of flexibility. The implementation ultimately caused a lot of problems, which were not entirely attributable to the concept, but were also due to the technical execution. This resulted in an almost two-year delay in the rollout. Users with heavy applications such as those used for newspaper and advert layouts, but other users too, were seriously inconvenienced by these delays and architectural errors. Issues for which we are ultimately responsible. We have learnt from this experience and our latest generation work areas are based on a Virtual Desktop Infrastructure (VDI). With VDI, only the screen info instead of the entire application and data is sent across the network. Everything runs on servers in the data centre. The struggles during the first years of outsourcing have resulted in a highly critical user organisation. In 2008 we had to renegotiate a two-year extension. We could not ignore the negative mood. We knew that we would have to pay Getronics to get the contract profitable for them. But it is hard to explain to the business that you are ‘simply’ going to pay them more, while their users are dissatisfied. So we decided to link part of the extra payment to end-user satisfaction. That was something that could also be defended internally: when satisfaction levels increase, then it is also fair that your payment increases accordingly.”
“If you let user satisfaction count towards the variable reward, you also receive more support from your own business.”
How do you determine the incentive for user satisfaction?
“First, we decided to link a substantial part of the incentive to satisfaction improvement. This way, it becomes truly important. Giarte was asked to translate the subjective concept of satisfaction into a tangible control variable. In April 2009, A monthly bonus for which Giarte uses ITsat to calculate the percentage owed, was introduced. Wegener’s main objective was improved performance for the entire chain of incident management. This was also taken into account in the weighting of sub indicators for this method. Sixty percent of the bonus is generated from service desk performance based on five points of evaluation: accessibility, customer friendliness, diagnosis, knowledge level and communication. Thirty percent depends on the quality and speed of Getronics’ solution teams, that is the second line. The remaining ten percent concerns a specific function for Wegener: smart access, being the applications’ mobile availability. Concrete objectives were also drawn up on the basis of market conformity, that is the benchmark with other companies using ITsat. The satisfaction levels of well over 200,000 end users are now measured via ITsat at various organisations. For Wegener it was important that Getronics performed at least average. That is why the median is used, in other words the absolute middle value of all clients who make use of ITsat. Our lower limit is that Getronics should always score better than the lowest 1/6th of the benchmark.”
“Because the bonus is both determined and paid out on a monthly basis, there is pressure to improve in short cycles.”
Why a monthly incentive for user satisfaction?
“Getronics receives a relatively high monthly bonus for achieving the required satisfaction levels. The moment that the contract’s profitability became partially dependent on user satisfaction, people started taking it seriously. Because the bonus is both determined and paid out on a monthly basis, there is pressure to improve in short cycles. It is now on top of people’s minds, at Getronics and on our side. Our own, non-outsourced solution teams are also ranked via ITsat. This makes our performance just as transparent in the chain as that of Getronics. The resolved second-line incidents are measured using ITsat. On the basis of the ticket data, you can see per month how each solution team – internal and external – performs in the eyes of the users. I believe – based on experience – that it is wrong to reward purely on the achieved SLAs. These will be accomplished one way or another, but you never know if green meters also reflect the feelings of the users. And bonus/penalty in outsourcing is of little meaning to the business. This is a matter between the outsourcing management and the service provider. What the business does notice is whether its own users are satisfied. If you let user satisfaction count towards the variable reward, you also receive more support from your own business.”
What lessons have been learnt for the future?
“I can think of three. Firstly, you need to set user satisfaction out in a contract from the very beginning instead of gradually introducing it as a type of remedy. An objective measuring party can be of great assistance in this regard with a valid benchmark and the appropriate reports. There is nothing vague about that. The second lesson is that you should step up your performance agreements every six months. This raises the bar for user satisfaction a little each time. We are not doing this yet, but should be. The third and final lesson is that we should communicate even better – and with it report back to our end users – on what exactly we do with all their feedback. You must indicate in a concrete manner which improvement actions are undertaken and should show a steady improvement. It is all about transparency towards our clients.”
“SLAs are achieved more frequently, because ITsat provides insight into the various links in the chain.”
Has ITsat produced any unexpected results?
“Yes, in the sense that the technical SLAs are achieved more frequently, because ITsat provides insight into the various links in the chain. In May 2009, seventy percent of the SLA targets were reached. By the end of 2010 this had increased to ninety percent. Thanks to ITsat, Getronics knows which links in the chain are responsible for negative user experience. That’s chain management. This evidently produces so much insight that the technical performance improves as well. That is an added advantage of ITsat.”