PEO Insider - August 1999

Operations E-Service
Linking 'High Tech' And 'High Touch'

By Paul Sarvadi

What’s on Your Company’s Web Site?

Seems like a simple question, right? At a minimum, there’s probably a description of your business, its leaders, and goods or services offered. The web site might also contain company news, investor-related information, interactive components, and a way to conduct secure transactions online.

Here’s a more challenging question: Are the features on your company’s web site also conducive to e-service?

What is E-Service?

We’ve all heard of or learned about e-commerce – buying or selling products electronically — and how it’s helping reshape the business of business. In fact, the Forrester research firm predicts business-to-business e-commerce will grow from $170 billion in 1999 to $3.2 trillion in 2003.

In a very short time span, we’ve witnessed the Internet evolve from tech toy to marketing tool to news ticker to transaction device. As is the case with traditional business, there’s much more to electronic business than being able to buy goods and services online. The next logical progression is to provide a new level of electronic service previously confined to interpersonal relationships.

The e-service concept acknowledges the importance of e-commerce, but takes it a step further by focusing on enhancing the customer’s overall online experience – up to and including a potential electronic business transaction. New technology advances enable a new level of online service – and tech-savvy consumers demand it.

Effective e-service empowers clients to process information at their convenience and handle routine matters more efficiently by accessing useful information online. From a service perspective, this enables clients with more complex needs to receive the attention they deserve from the company’s customer service representatives.

Becoming ‘E-Service Friendly’

To become e-service-friendly, it’s best to explore the criteria that help determine whether your company web site is e-service-oriented. For example, does the information on your company’s web site reflect your clients’ expressed needs? How long does it take for clients to download information from the web site? Is the web site visually stimulating, or is it cluttered? If the answers to these questions and others are not favorable, then there’s little incentive for clients to conduct business at that web site.

Combining continual client feedback with technological know-how is a sure way to enhance your company’s e-service. For example, we learned from clients and employees that they wanted faster ways to find and download information on Administaff Assistant, our Internet service platform available exclusively to clients and worksite employees. This site is a significant addition to our client service program because it offers secure, instant, and around-the-clock access to a personnel guide, more than 60 human resources forms, links to our preferred service providers, customer-specific payroll information, and more. To make the service more productive for our target audiences, we installed a search engine that helps people find information more quickly, and we streamlined our graphical components, striking a balance between aesthetics and functionality. We also listed our services in categories our clients could identify with, not using internal titles or technical names.

After making these e-service enhancements, the usage rate increased by 88 percent while the average time spent on it per visit dropped by half. More important, our overall customer service capabilities increased.

Phase II — which is being introduced in stages this year – will enable client companies to submit and approve payrolls online, run a variety of payroll reports based on historical data, and complete personnel forms and other routine transactions via the Internet. Phase II literally extends our human resources platform to clients and worksite employees at home or in the office, seven days a week, 24 hours a day.

Establishing and Maintaining an Extranet: What It Takes

Certainly, offering clients an interactive, password-protected extranet is a logical way to extend a PEO’s customer service commitment. But before committing to an endeavor like this, PEOs should be well aware of the investment of time, money, and manpower that goes into an interactive extranet.

To begin with, PEOs should realize building an extranet is a never-ending process, one with a beginning but no end. We are constantly improving our extranet based on our customers’ requests. Through focus groups, surveys, and feedback gained from our customer service representatives, we ask our clients what’s working, what’s not, and what they’d like to see more or less of.

Developing an Extranet

Getting an extranet up and running is no small task. From our first work on our extranet to its initial release in July 1998, a development team worked full-time on the project for more than one year. It’s imperative to dedicate a full-time team to the development stage … developing an extranet is not something people can do part-time. The size of the development team depends on the size and complexity of the extranet site. Our development team had more than 20 people devoted full-time to the project.

Project leadership is a critical element to the success of an extranet. The endeavor should be managed by a person skilled in project management, one who works well across departmental and functional boundaries and who has the authority to make things happen. Use of outside expertise is another must. Few, if any, companies have all the expertise available in-house to direct a project of such magnitude.

The technical challenges of developing, launching, and maintaining an extranet are as complex as the manpower challenges. Obviously, a PEO’s information systems infrastructure must be large enough to handle the amount of anticipated traffic. In fact, it’s a good idea to have extra capacity because clients may use the system far more than originally anticipated. For smaller PEOs without a large IT infrastructure, it’s a good idea to have a third party provider host their extranet site.

Programming expertise, whether in-house or outsourced, is another must for developing an extranet. Because most off-the-shelf applications conducive to extranet use are stand-alone and not web-enabled or multi-client, we built our extranet largely from scratch. The off-the-shelf components that were used had to be customized extensively.

How much does an extranet cost? It’s hard to say for sure, because the cost depends on the level of complexity and interactivity. At the least, a static, relatively simple system will cost in the hundreds of thousands of dollars, whereas a complex, interactive system can easily run into the millions. Either way, it’s easy to see extranets are a significant capital investment for PEOs.

Once the site is up and running, the maintenance team is significantly smaller than the development team. Our site is maintained by a dedicated department, who updates its look, content, and back-office systems on a continuous basis.

Spreading the Word and Increasing Usage

Using our extranet is not a mandate for customers; rather, it’s another tool to help us build a relationship with them. That’s how we market it — as another option for our clients. Our numbers show our customers appreciate the tool. We quickly learned there was a huge pent-up demand for e-service. Our outside consultants predicted that only 5 percent of customers would use the site in the first six months of operation. Instead, 40 percent of the company’s clients used it. One reason our usage has been high is the system is extremely intuitive, and little or no training is needed. Anecdotal feedback from our customers reinforces what the numbers tell us.

Positive response to our extranet has not been limited to our clients. Our employees love it, too – not only because it makes our clients happy, but also because it improves internal workflow and removes paperwork.

Is It Worth It?

So what are the results so far of our e-service efforts? Increased customer satisfaction by streamlining processes, reducing paperwork, increasing access to information, and boosting productivity. During the first six months of operation, approximately 1,500 clients each averaged five hits per day on the password-protected site and together downloaded more than 3,500 personnel management forms. Interestingly, more than 30 percent of this activity occurred outside of normal business hours, indicating that clients appreciate this round-the-clock access to the company’s services. Clients also told us using the system is more convenient than calling a customer representative for routine information.

Another result of e-service is reduced costs. Our online system has reduced expenses for such items as copying, printing, postage, and calls to customer service centers and other departments. Producing and distributing the company’s personnel guide online, for example, totals only 1/10th the cost of the traditional hard copy. In addition, the introduction of online requests for certificates of insurance saved 169 days of manual processing time over a three-month period. Previously, clients requesting a certificate of insurance for workers’ compensation had to wait 24 to 48 hours to receive the item; using our extranet, they now receive the needed documentation in 20 minutes. Other online processes have saved the company an estimated 700 workdays since July 1, 1998.

Achieving business success in the new millennium is about nurturing harmony between people and technology — high tech combined with high touch. E-service effectively links both. In the future, a smartly designed, interactive company web site will define stellar client service as much as, if not more than, answering a telephone promptly.

The key to successful e-service is a delivery platform that makes doing business better and easier than before. A web site with this capability ensures clients will flock to e-service … with a correspondingly higher degree of customer satisfaction.

Paul J. Sarvadi is president and chief executive officer of Administaff, Inc., a Houston-based PEO that has 25 offices in 15 major markets nationwide. The company has been recognized by InformationWeek magazine as one of the country’s top 500 users of information technology.

From the PEO Insider ©NAPEO 1999. Posted with permission. Further commercial publication or distribution is not permitted without the express written authorization of the author and NAPEO.