Transaction costs do not predict systems costs
If you wanted to predict how many customer contacts a council would have, and how much they cost, what factor do you think would best predict?
- Population?
- Number of people in poverty?
- Geographic size?
- Housing stock?
Spoiler: NOTHING reliably predicts total numbers of contacts and cost.
THE PHONE CALL IS COMING FROM INSIDE THE HOUSE.
It’s the design of the system of receiving demand and dealing with it which is the major factor which drives numbers of contacts and costs.
It’s like a Hendrix gig — the feedback is dominating the signal.
For a while, we offered a benchmarking service where councils could — with a bit of work — gather together and compare their volumes of contacts across different ‘contact channels’ for different services.
Not ‘you’re in the top quartile — congratulations!’
Serious analytics and to show where to investigate and what to think about to make improvements and savings.
Still somewhat crude, but valuable.
One thing we did discover quite clearly: as digital channel contact went up… so did telephone contact, in an apparently-linked pattern.
Lack of ability to absorb demand, we assume — and also the curse of ‘generic email addresses’.
But when we ran regression analysis to try to control for predictable factors that drive contact, it broke the system.
Not population or geographic size, not number of council houses, proportion of people with disabilities, not numbers of people with social care needs.
The design of the system is governing the demand on the system.
I once presented to a council finance director on transforming their customer contact model, really working to get it right first time. He was a rather over-caffeinated and red-faced individual, and turned positively puce when he responded. “All we’re doing with this ‘customer care’ nonsense, Benjamin, is FARMING A COMMUNITY OF NUTCASES!”
He was so wrong, but also so right; failed organisation farm their own demand.
- They fail to get it right first time.
- They create chaotic ‘signposting’
- They break one need into multiple appointments.
- They make matters worse.
- They generate complaints and more needs.
chosen path 
Very Interesting article thank you Benjamin.
The councils leadership focus is always questionable, majority of them I meet, goofing off or busy justifying or fixing BAU. loosing touch becoming irrelevant to masses
The point of your article “ The design of the system is governing the demand on the system.” is tour d’horizon.
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For some ‘reasons’ on why that leadership disconnect is happening you might like to look at
https://www.linkedin.com/posts/antlerboy_publicservices-systemschange-service-activity-6802480342948282368-WUJ-/
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