Multiasistencia on the Internet (B)

Case studyReference no 906-011-1

This case was written by Javier Busquets, ESADE Business School. It is intended tobe used as the basis for class discussion rather than to illustrate either effectiveor ineffective handling of a management situation. The case was made possibleby the co-operation of Multiasistencia.

© 2006, ESADE Business School.No part of this publication may be copied, stored, transmitted, reproducedor distributed in any form or medium whatsoever without the permissionof the copyright owner.

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Multiasistencia on the Internet (B)1 Javier Busquets Rev. February 2006

After José María Añón’s presentation at the corporate board meeting in May 2000, he was given the go ahead he had been hoping for. His mission was to re-engineer the main process of the firm: the CCMS. Javier Bartolomé stated, “We had to focus on our core business, concentrate resources and ensure profitability”. Mr. Añón created a new organization based on three areas: First, the Information Systems area was going to be responsible for controlling and increasing availability over the ICT infrastructures and developing the new Internet application to support the CCMS process. Second, the Network Management area was going to be responsible for defining policies to manage trade professionals. Finally, the organization area had to create a blueprint of the organizational processes. In 2000, the Group had a diversified service portfolio and was also involved in an aggressive international expansion. “Multiasistencia Gestión y Ayuda” had 34 fulltime employees in 2000 and had its “2424” service which provided information to Telefónica’s2 mobile users, from street names to restaurant locations. The “2424” service responded to 900,000 inquiries that same year. The decision taken by the board was to spin-off these businesses. The Group’s President, Nicolás Luca de Tena, was going to supervise these businesses directly. In 2000, there were also some attempts to start operations in Italy and Belgium. Phillipe Kernó, International Managing Director, and Javier Bartolomé (CEO), decided to concentrate their efforts on consolidating the company’s international operations in UK and France. Mr. Bartolomé also decided to create a new position: the Group’s Human Resources Director in order to define standard policies for human resources. Isabel Arribas was appointed to this position. She added,

“We replaced the name tags and the ‘mental salary’ concept with an incentive program for CSRs, stressing quality assurance, customer satisfaction and company performance. In short, we decided to align new incentives with the re-engineering process.”

All the changes would be enhanced by the introduction of a new, simpler and more powerful Internet information system which would be accessible to all the players in the company’s network of relationships.

“But the most important thing was to understand how technology was going to support a radical change in our business relationships,” stated Mr. Añón.

Change had an impact on people and organization. In 2000, Santiago Asís3, Multiasistencia’s COO since 1989, left the company. Weeks later, a small group of his information system team left the company as well.

1Case written by Javier Busquets, Director of the Department of Information Systems (xavier.busquets@esade.edu). The case has been written as the basis for class discussion rather than illustrating either effective or ineffective handling of a business situation. Copyright © ESADE 2006 (www.esade.edu).This case may not be copied, reproduced or transmitted by any means, including electronic. Its use is not permitted without the express permission of the author and ESADE. Further information on Multiasistencia at www.multiasistencia.com. The case is based on real facts, even though some names and situations have been fictionalized. All data, photographs and graphics are reproduced with the explicit permission of Multiasistencia. 2 Spanish PTT (www.telefonica.es) 3 The name is fictional.

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The New Relationship with Trade Professionals A new coordination model for the trade professional network was proposed based on mutual commitment. Mr. Añón added,

“Multiasistencia guaranteed trade professionals a much higher volume of work based on the standard price tables and, in exchange, asked for more exclusivity. In order to be able to manage the new volume that Multiasistencia wanted to spread among its network members, however, the independent professional model had to change from lone contractor to small companies with a sufficient number of professionals to be able to meet the contractually defined timetables. We offered them advice on starting a business that would meet these requirements.”

Since 2001, Multiasistencia offered jobs through the Internet Portal designed specifically for the trade professional network. The system also provided direct payment in order to reduce the paperwork which represented around 50% of working time on estimating, invoicing and collecting amounts owed by corporate clients and end customers. In fact, Multiasistencia now invoices on behalf of the trade professional network. To promote the change, some franchises were asked and selected to start to invest together with Multiasistencia and adopt the new model, thereby becoming early adopters. One of the trade professionals who became owner of a new franchise added,

“Well, it was difficult at first. And I don’t think it was just difficult for us, but also for Multiasistencia. I remember when it began, you logged on to the system and it was very slow, sometimes it stopped.”

The area of Network Management promoted meetings in every region where Multiasistencia had offices in order to explain the new way of working. “Within this process,” one manager added, “the first adopters became opinion leaders in the network of trade professionals.” An owner and manager of a plumbing and electricity repair company commented,

“Initially I did jobs for Multiasistencia and other clients I found by myself. Working with Multiasistencia meant I had to pick up computer skills and comply with very strict quality standards. We had to pull jobs from the system according to our Service Level Agreement (SLA). In addition, Multiasistencia advised us on how to start a company that would meet the requirements they set. To help access the technology, in 2000, Multiasistencia had a special offer for Personal Computers and Internet access.”

The key priority was the network of professionals, and the challenge was to facilitate the adoption of personal computers and mobile phones needed to put the new system to work. Multiasistencia promoted special offers on PC’s, Internet access and cell phone service (see Exhibits 1 and 2).

“We found that some franchises were early adopters of ADSL4 Internet access, going one step beyond the initial Multiasistencia recommendations. We offered very good conditions but some of them improved our proposals.”

As a result, José María Añón decided to give franchises the freedom to accept its ICT applications or improve on them.

“I understood trade professionals were changing because they were adding creativity to our initial offer.”

4 Asymmetric Digital Subscriber Line (high-speed service)

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From 10% PC usage in the year 2000, the adoption level in the franchise network is now at 95%. In terms of cell phones, the vast majority adopted Multiasistencia service via this channel because of its convenience and good service prices. From 2000 to 2004, most of the trade professionals that Multiasistencia had worked with became franchises and this led to a concentration in the network of professionals. Not all trade professionals agreed with this new model, so some trade professionals, some of them having worked with Multiasistencia since the 80’s, left the network (see Exhibit 3). One of the franchise owners added,

“It was practically just me in the office. Well, with time there are now twenty-five people, four in the office, and we have gradually adapted the number of people in accordance with the quantity of work that we have.”

The New Control Center The new Control Center reduced its staff to 375 CSRs who managed in 2004 over 25,000 incoming and outgoing calls5 a day from the different countries in which Multiasistencia offered its services. “The new Control Center organization has been adapted to and realigned with the re-engineering process,” explained José María Añón, adding,

“Our CSRs do not answer telephone calls; they manage the process as owners, being responsible for the predictive control of quality. When a new repair order is created, no one needs to intervene unless an exception occurs.”

The new Control Center structure was based around two teams: the “front office” and the “back office.” The “front office” was in charge of receiving the call. The rest of the process was automatic. The “back office” team consisted of CSRs in charge of monitoring the repair process until its closure and managing exceptions. More senior CSRs made up the new back office team. These CSRs were distributed geographically in the countries where Multiasistencia offered its services. In addition, Multiasistencia offered wide-ranging and complete custom-designed services, such as the comprehensive management of repairable or cash settlement claims, customer care help-lines, managing loss-adjusters and recoveries (whether negotiated or through legal proceedings). The CSRs managed the entire CCMS process by having access to information in real time. Therefore, they had greater decision-making capacity and a higher level of responsibility.

“Incrementing responsibility has led to a considerable increase in employee satisfaction. This new organization is designed to achieve customer and employee satisfaction since empathy is a key factor in ensuring quality in our services,” stated Isabel Arribas, Human Resources Director.

In order to ensure service availability, Multiasistencia’s Control Center was integrated with three other Contact Centers belonging to the most important insurance companies in Spain. They acted as back-up centers to ensure access during peak periods in telephone traffic or during telecommunication network failures. In addition, a similar agreement has been made with computer infrastructure and information systems. As a result, in 2004, service availability was over 99.999%. Multiasistencia’s database was replicated in over 50 insurance companies and sent information daily on all movements via the Internet/Editran6 and XML7 to its corporate clients. The New Internet Process and the Role of ICTs

The new, seamless Internet application allowed the complete management of the CCMS process. Multiasistencia used the Internet as a software technology and as a new communication channel,

5 By way of example, over 80% of the calls are answered in less than 20 seconds and hang-ups account for less than 5%. 6 EDITRAN: System which allows the exchange of information between the computers of different entities, independently of brands, models or languages. 7 “eXtended Mark-up Language”: standard communication language between computers.

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acting like “integration glue” and empowering electronic relationships with its customers and network of trade professionals.

Information technology played a fundamental role in redefining the type of professional that Multiasistencia manages. The Franchise Internet Portal for professionals contained the same information as that available to a CSR in the Control Center with the ability to carry out 100% of the transactions defined by Multiasistencia.

“And it’s also a very good way of monitoring the Service Level Agreement we had with them in the countries where we’re present,” added Philippe Kerno (see Exhibit 4).

Multiasistencia acted as an ASP8 for its franchises, making management applications available to them for accounting applications, taxes, etc. For those franchises that already had their own applications in place, the essential part of the functionality offered by Multiasistencia was available via Web Services technology. Mr. Añón added,

“This technology made it possible to define applications like “functionality modules” in a Lego-like system architecture, downloadable from Internet. This new system has made the integration of inter-organizational applications easier, allowing the franchise’s applications to communicate with the Multiasistencia system, avoiding costly system integration projects and redundancies.”

The Results of the Re-engineering Process José María Añón stated,

“Our model is to make the whole process transparent. The integration of processes on the Internet has allowed us to define a “virtual machine of finite states,” with very precise expiry dates between them. The application has about 100 controlled steps linked to our client and trade professional applications. When an exception occurs, we have to forward all the information available to the person directly responsible for its management to make the decision-making more effective. As a result, the number of errors and incidents in the process has dropped dramatically. The number of telephone calls made from Multiasistencia has also dropped from 10 to 1, and the back office costs have gone down 66%.”

Javier Bartolomé, CEO for the Group, stated that

“As a result of our re-engineering project, we experienced a 49.6% increase in productivity from 2000 to 2003. We also experienced a 25% reduction in terms of intervention time per year.”

8 Application Service Provider.

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In 2004, over 1 million repairs were successfully carried out in the countries where Multiasistencia offered its services. Talking about the balance of this change, Nicolás Luca de Tena, Chairman and Founder, explained,

“We endured a very tough re-engineering process in order to adapt our firm to an expanding market with undefined rules. We must therefore continue to innovate and add value for our clients in all of the company’s activities.”

Figure: Evolution of average productivity: number of claims managed by CSR per year (*) “Full-time equivalent” Source: Multiasistencia

17061845

22492553

0 500

1000 1500 2000 2500 3000

2000 2001 2002 2003

+8%+22%

+14%

+49,6%

Jobs/FTE (*)

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Exhibit 1: Mobile Portal

Source: Multiasistencia

Detail of the cell phone and access menu to the WAP portal for the trade professionals working for Multiasistencia.

Cell phone display options (left): - Register arrival at customer’s house - Register departure from customer’s house- Check repair status - Information - Call - Main Menu

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Exhibit 2: Internet relationships: B2C, B2B and B2B2C

B2C

On-line orders and content

Connections with portals

− White brand

− Co-branding

B2B

Same information as the phone operator

100% “on-line”

Current capacity to carry out 100% of the transactions with Multiasistencia

Direct communication channel with the network

Act as “Application Service Provider (ASP)” in accountancy, tax applications, etc.

B2B2C

Process integration

A single customer service system

Source: Multiasistencia

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Exhibit 3: Multiasistencia in numbers

0

0,2

0,4

0,6

0,8

1

1,2

2000 2001 2002 2003 2004 2005

Claims (in millions)

0

2

4

6

8

10

12

2000 2001 2002 2003 2004 2005

Calls handled (in millions)

0

2000

4000

6000

8000

10000

12000

2000 2001 2002 2003 2004 2005

Trade Professional Network

020406080

100120140160180

2000 2001 2002 2003 2004 2005

Revenues ( in million euros )

Source: Multiasistencia

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Exhibit 4