Divide And Be Conquered
As businesses look to deliver service, the approach is often to break the process into its component elements and farm them out to different specialist divisions. This is fine, as long as all divisions talk to each other. This episode shows how getting this wrong can destroy value very quickly.Since we moved into our new home in September 2007, we have been using a particular supplier for telephone and broadband. It took us three months of effort and stress to get things set up. We were cut off during conversations with them, every time we rang we dealt with a different person, the different people didn't seem to have access to notes on previous conversations, conflicting instructions were given. When we finally did get set up, part of the service still didn't work, but we were so pleased to have most of it in operation, that we decided not to push our luck (or our sanity).
Fast-forward to March 2009 with one month to go before our contract expired. As you can guess, I looked for deals and found one that would save me GBP276/year on what I was paying. I rang current supplier to request a MAC code (a code to transfer the service to the new supplier). Of course, they asked if there was anything they could to to keep us, so I asked if they could match the new price. They could, but I said that I wanted a particular aspect of the service (the bit that didn't work) checked. I was assured that I would receive a call within "24 working hours" from the technical team. No call came, so I called up again to ask for my MAC code. Same process started, I asked them to refer to their notes - none available.... I asked for (and got) the code.
If they had managed the last little check on what I had asked, and called me back when they had said they would, they would have kept business worth GBP382/year. Less than before, but better than zero which is what they have now. Ironically, I wanted to stay with this supplier, but despite my best efforts, they practically drove me away.
By dividing up the service provision, my supplier is destroying shareholder value thanks to lack of connectivity within the divisions. No one connects with each other, no notes can be found, no one can safely say that something will happen when it is meant to. I took business worth GBP660/year away. Not much, but assuming that I am not the only one in this position, this adds up. Of course, legislation may be preventing them from offering a more "seamless" service if different legal entities are involved, but then this is an organisational issue that management need to review.
posted by William Martin @ 02:08
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