Magazine Article | October 1, 2001

Xtreme Service

Source: Field Technologies Magazine

More than a few companies have taken their lumps trying to cut costs and improve customer service. Xerox Office Printing Business, however, has saved millions while still keeping its customers satisfied.

Integrated Solutions, October 2001

It's 9:00 a.m. on the first of the month and as the vice president of worldwide service, it's time for you to make some decisions. Performance reports from regional offices around the world are spread out on your desk, which now resembles an accountant's workspace at tax time. You squint your eyes - a resulting mix of both confusion and frustration - as you try to compare data from your European and North American divisions. You're charged with achieving two seemingly opposite goals - improve service and cut costs. To justify the weighty decisions you're about to make, you rely heavily on the reports strewn before you.

Then, the reality of the situation hits you like a kick in the shins. The data on which you're relying is at least one month old. Worse yet, the data is inconsistent from one regional office to the next. Knowing that poor data leads to poor decisions, you figure that you're probably better off punting than going for it.

"That's the situation we were in," recalls Curtis Chapman, customer support IT manager at Xerox Office Printing Business (Xerox OPB). "We had so many different service applications running around the world that it took a month to get the data into a format that even made sense. Also, every regional office had a tendency to report the numbers in a way that was most positive. Instead of submitting an unbiased report, the regional offices would stress the positive metrics and downplay the negative ones."

Having just implemented a worldwide system for order management, Xerox OPB (Wilsonville, OR) knew the benefits of a single enterprise application - real numbers in real time. Upon its completion, the company's new enterprise service application would impact all phases of Xerox OPB's customer service from the call center to the technicians in the field. And, in a time of increased emphasis on ROI, the solution would lead to millions of dollars in savings and hold the promise of even more dramatic cost cuts in the future.

Cut On-Site Support Calls
Since you've given up on the task of sorting through the incongruous reports on your desk, you might as well put your vice president title to good use by evaluating the costs involved with processing customer service calls. Knowing that your company is not that dissimilar from Xerox OPB, you can gain some insights by assessing the billion-dollar plus division of Xerox Corp.

As a manufacturer and marketer of color and monochrome printers, Xerox OPB is obliged to offer customer support to its worldwide customer base. In the United States alone, Xerox OPB has more than 250,000 customers who are serviced by 200 field technicians.

"No problem," you think to yourself. "Answer the support calls and dispatch the technicians." Be warned, however, it's that kind of simplistic thinking that is going to get you fired. Just because Xerox OPB fields more than 1,800 customer support calls per day in the United States doesn't mean that the company wants them all resolved by field technicians. In fact, the opposite is true - Xerox OPB would prefer that no support calls be handled by technicians. Obviously, this is not possible. But reducing the number of on-site service calls adds up to big savings.

"Dispatching a field service technician gets expensive real quick," says Chapman. To substantiate his claim, Chapman references the costs associated with handling customer support calls at Xerox OPB. Calls that are ultimately resolved by an on-site visit from a field technician cost Xerox OPB about $400 apiece. Calls that are resolved over the phone by the 150-member support staff, however, run about $50 apiece. "With that much of a difference in cost, it's easy to see why we had to reduce the number of on-site service calls," says Chapman. "If we wanted to be successful, we couldn't send out a technician every time a customer called."

Avoid Redundant Work With Integrated Database
Using the numbers supplied by Xerox OPB, you're easily convinced that cutting on-site service calls will make your company more profitable and your job more secure. It's about this time that you begin to realize your cobbled together service applications can't be tweaked any further. You realize that your company needs a new enterprise solution to help it reach the goals that you're now setting.

When Xerox OPB arrived at this point, the company implemented an integrated suite of customer service and product service solutions from Metrix, Inc. (Waukesha, WI). The initial implementation included a worldwide rollout of Metrix modules that handled parts inventory, customer contracts, call center management, and field technician dispatching. Xerox OPB has since added a module to automate its repair center and extended the system to reach technicians in the field through wireless devices. Since its inception, the Metrix solution solved several ongoing problems at Xerox OPB. In addition to interfacing with the company's previously installed Oracle financials system, Xerox OPB executives then had access to consistent data in real time. The Metrix solution also automated the entire customer service process from the incoming call to the ultimate resolution.

Working underneath, but in conjunction with the Metrix solution, is a knowledge base that is continuously updated by six editors at Xerox OPB. This knowledge base is a searchable reservoir of data that is accessed when responding to service calls. Every time a support call is handled, the knowledge base is consulted. If a similar support call has been handled in the past, the resolution will be in the knowledge base. By consulting this encyclopedic database, phone support personnel have more consistent and more correct responses. "The people on that first level of support needed more tools. Simply put, they needed to have more answers," states Chapman. "We wanted to take on more customers and reduce the amount of on-site service calls. That meant one thing: Our call center had to offer a higher level of customer support."

Cut Costs And Improve Support? It Can Be Done
"A higher level of customer support," you think to yourself as you begin to smirk. Those intangibles might sound good on some collateral marketing piece, but try selling that to your boss. When you're trying to measure ROI, how much is "a better customer support experience" worth? If you can't assign a dollar value to it, then it's tough to include it on the ledger sheet.

You can peddle fuzzy ROI numbers to your boss, but the management team at Xerox OPB took a much different approach. By analyzing product inventory, for instance, Xerox OPB reduced overstocked and rarely used parts. This one move reduced inventory costs by $1 million and provided the company with real-time data. "We used to do a physical inventory twice each year. The minute the count was done, it was wrong," laments Chapman.

How about those $400 on-site technician visits? Well, they have been slashed. Prior to the implementation, Xerox OPB had a "phone fix rate" of between 40% and 50%. Now that phone support personnel access the company's knowledge base, the phone fix rate has skyrocketed to 70%. "The dramatic rise in our phone fix rate has not translated into a reduction of on-site support visits," explains Chapman. "However, our customer base has grown significantly while the number of instances of field support has remained level." Those are the metrics that impress the boss - customers increase and support calls increase, while on-site calls remain flat.

In terms of overall customer support satisfaction, Chapman points to a weekly survey that is e-mailed to a random sampling of of Xerox OPB's customer base. Currently, the company is achieving excellent ratings from 95% of the survey's respondents. "This is not a hard-dollar ROI number, but it is a good indication of the level of customer support that we continuously provide," comments Chapman.

The Web, Your Encore Performance
You've bought into the Xerox OPB blueprint for success and have cut costs and increased your customer base at the same time. Your title of vice president of worldwide service is secure - at least, temporarily. Now, you have to start thinking about your encore performance. If following Xerox OPB's lead was successful once, then why not try it again? For a follow-up, Xerox OPB is trying to further reduce costs by pushing more customers to a self-service customer support model. By allowing access to the company's knowledge base via a Web browser, customers can tap the database to quickly find answers to their problems. In this model, the cost savings are monumental. Xerox OPB estimates that it will cost $5 (for database maintenance) per online customer support visit. "Right now, about 5% of all our support issues are resolved online. That's a tremendous savings to us, but we want to push that number to 15% in the next few years," adds Chapman.

There you have it. A simple plan to follow that will ensure your success as vice president of worldwide service. You've implemented an integrated suite of service products. You've improved customer support. And, you have hard-dollar ROI numbers to justify all the money you've spent.

Whew, you've had a busy day. Better take the next week off.

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