Counting the cost of Public Sector Channel Shift

A lot of Public Sector organisations are now getting serious (or at least semi-serious) about Channel Shift. Most have by now realised that the potential savings are real and significant.
So coupled with a central Government agenda of cost-cutting, whatever the Administration in place, the digitisation of public services looks set to continue. In fact a recent survey by Goss Interactive highlighted that on average public sector organisations plan to save £1.75m each through Channel Shift in 2015.

But how much does it actually save your organisation to shift customers to online channels?

Back in 2009 Socitm (The Society of IT Managers) worked out the cost to serve for each of the channels being provided by a UK public Sector organisation (in this case a Council). The benchmarking work they carried out showed that the costs per visitor were:

• £7.40 for face-to-face
• £2.90 for the telephone
• £0.32 for web enquiries

However, the direct costs of channel shift can also be supplemented by additional benefits such as:

• Increase customer service and satisfaction
• Building engagement and loyalty
• Meeting customer expectations
• Freeing staff to be re-deployed on more "low tech / high touch" activities

It is still worth pointing out that providing digital content and self-service functionality only helps a percentage of the population you are trying to help. For example there are 10.8 million people in the U.K. who do not use the Internet and therefore any 'digital first' self-service options for businesses and citizens should not be 'digital only'. 

Serious About Channel Shift?

The whole topic of Channel Shift is something that is being discussed in most businesses. Yet very few organisations I speak with actually have a documented strategy of how this shift will be realised.

Firstly, what do I mean by the term?
In my opinion... Channel Shift is the managed process of migrating customers to self-service channels (typically digital ones) to reduce cost and increase availability of service.

Reduced cost:
Back a few decades, it was humans that were cheap and computers that were expensive. Now, computers (or more specifically: computing power) is cheap compared to the cost of a person. Using self-service functionality via websites and mobile applications has a much lower cost-to-serve than a trained person, even a lower paid one in an off-shore outsourced contact center.

Increased availability:
The web never sleeps and your customers expect that they can now access your site at a time that suits them, not your company. Whereas a decade or so ago you may have had a telephone line staffed to deal with purchases, amends and refunds... not most of this functionality has now moved to a 24/7 online presence. In fact, as far as seasonal eCommerce goes, some of the most high volume times are public holidays (e.g. Black Friday and Christmas & Boxing Day) - days when most staff are either on holiday or otherwise unavailable.

So if your organisation is serious about Channel Shift, what should it do?

The first thing, as I mentioned in my opening paragraph is to have a written strategy. This needs to clearly document:

1. Who are your user & customers?
   Think you know who your customers are? Think you know what motivates them to engage with your organisation and purchase from it? Think all your customers are the same and have the same needs? Think again! 
2. What are the user tasks your want to move to lower cost channels?
   It may be easy to say "all of them", but in reality this may be either too much to do at once, or there may be business rules & restrictions that stop you from doing this. It may therefore by better to prioritise and understand the dependencies between these tasks first.
3. What channels do your customers use?
   This may not be as simple as you think. Different customers may use a specific mix of channels to: build awareness, inform & educate themselves, transact and then carry out subsequent self-service tasks. 
4. What are your actual current cost-to-serve figures?
   For example, what does it actually cost to serve your customers via each of your channels

This is the easy part... once you have this, the hard part is then working out what you want these customers to do in the future and what channels you actually can manage them to.

Are you a digital driver or just a passenger?

Are you the person leading the digital change in your organisation, or are you just along for the ride?

I've now seen enough digital transformation initiatives to know who is driving from the front and who is not. It becomes quite clear after a while (especially if you are frequently involved with similar types or style of programmes) to identify the leaders and passengers in online change initiatives.

So here are my tips on how to recognise these two types

Digital Leaders:

Typically these people have the vision or initiative to start the digital revolution within an organisation. They may be the technical person that creates the overall enterprise solution that enables a shift away from analogue processes to online ones, or the executive who drives forward the business case or rationale for sweeping channel shift. They may also have a number of different roles across a project, either stepping into different positions where necessary or act as the project manager in the absence of any other leadership.

Digital Passengers:
These are the people that try to align themselves to a digital change project without actually having any responsibility (yet will be first to claim all the credit when change does start taking place). They will understand that 'digital is the next big thing' but will not have had any real experience and yet claim to be knowledgeable when stakeholders or executive sponsors are in the room.They are also most easiest to identify by their repetition of a small number of key facts they have picked-up along the course of the transformation, possibly even getting them wrong over time.
Or put more esoterically... Just because a person is standing in the direction of movement,  it doesn't mean they are actually going that way.