Target operating model for public sector

The challenge

A major public sector organisation required a supplier to manage the collection, administration and enforcement for their BPO operation. Through a re-tendering process, the organisation wished to achieve a step-change in the cost of providing the services; an uplift in revenue (from £3.7b in 2010/11) by improving licence fee collection rates through innovation and process improvement; enhance public acceptability; and ensure collection service continuity throughout transition.

The solution

• Partnered with Capgemini to offer a strategic alliance proposition delivering revenue growth, reputation enhancement, cost reduction and service continuity.
• Created an integrated Target Operating Model (TOM) with intelligence at its heart, focusing on customer service, data & analytics, strategy, arrears management, DCA panel management, field sales/collections & enforcement.
• Design of arrears management and field solutions including DataEye^® performance dashboard, collections specific analytics and scoring, new civil litigation process and advanced agent training.
• selection of new outsource partners on arrears management and field.

The results

• Designed a TOM delivering all requirements and drivers.
• Cost reduction through consolidation of operations, technology drivers, customer insight and extending customer universe.
• Forecast £35m savings benefit per annum accrued through sales & self-service, customer service, back office, arrears management and field & prosecution.
• Further savings delivered through Arum’s influencing of partners, including below average margin and costs reduced by £9m over life of contract.
• Detailed analysis identified a £230m annual revenue uplift after TOM implementation.