Room service

I have been using a hotel recently on business and have managed to strike up a good relationship with the local staff. My business priorities changed after I had made a booking locally at the hotel. No worries I thought I will ring them and let them know that I need to change my plans. That’s when the fun started. How hard can it be?  Well I was about to find out!

I googled the hotel to find the number and make the call. I hit an IVR system, I thought this is strange –  the hotel is not that big and an IVR system seemed a bit over the top. I started musing about the IT salesperson the had flogged them an overly specified system for the purpose. A large bonus would have resulted and you would have not seen him/her for dust. Anyway, back from my day-dream and  having chosen the bookings option I was then surprised to hear that I was 5th in the queue! It started to dawn upon me that this was not a call that was going to be answered by the hotel reception, but by a call centre somewhere in the world. To cap it all the message playing advised me that I was being charged 10 p a minute by the hotel for the call and I was still 5th in the queue. At this point I thought stuff it! I put the phone down and emailed the local sales manager at the hotel to make her aware of my experience and to change my booking. She answered first thing the following morning and all was well.

Upon my arrival at the hotel the sales manager immediately apologised for my experience and said that they had no control over the phone calls. The hotel group to which they now belonged had centralised it call handling facility some time ago and that there was nothing that she could officially  do. However, she then whispered that I could have the local number for reception which is managed about 20 hours a day and that they would be very happy to help me in future. Of course she was quick to let me know that this was against company policy,and she could be shot for giving the number to me. Shot for doing the right thing!

The conversation then went on to reveal that the centralisation of the booking system causes all sorts of problems for not only the customers, but also to the local staff. She said, Imagine trying to book a conference or a wedding through a call handler somewhere else in the world who does not understand the local hotel, its provisions etc.  It causes a lot of problems which have to be sorted out once the hotel become aware of the booking, causing duplication of effort and frustration for the customer who is keen to ensure that their event goes off well. As is always the case the local team pull together and do their best to make sure that the customer gets what they want on a way that best suits their needs, but at what cost to the business and its hard-working employees?

Another classic case of a bunch of suits in an ivory tower somewhere in the world thinking that they can save money by centralising and standardising their approach to customer enquiries. Of course they will be using a bunch of metrics that tell them that the system works wonderfully and probably also helps to justify the decision to invest in the IVR system and call centre operation. If only those guys got out of their tower and came to study and understand the reality of their decision through the yes of the customer and colleagues in the workplace they would understand that all was not what it seemed. Until then I will use the local phone number to sort out my accommodation. However, the obvious frustrations and morale of the staff will continue to suffer along with the reputation and lost business to the hotel and others in the chain until someone is brave enough to wake and realise that this does not make good business sense.

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Data data all around, but not a bit that’s useful

It’s that busy time of the year for people in finance in local government –  ‘close down’.

A magical time when every last ounce of energy goes into the exercise.

There is a target date to meet and everything must add up, balance and be filed for inspection by the dreaded external auditor.making efficiencies

Life and death for accountants: like watching paint dry for everyone else.

During ‘close down’ it’s very difficult to get any useful information out of accountancy, as they are ‘too busy’.

So whilst the business goes on spending millions of pound a week managers run blind on what’s actually happening with cost, until they get an update at the end of the quarter. That’s when the fun starts again.

One persons view of a budget and spend profile is different to another. As the manager of the budget you often have limited say in what get reported to the many meetings that purport to scrutinize the detail only to nod it through.

It’s claimed that only the accountants really understand what the figures mean. In practice I wonder if even that it true.

The slight of hand that goes on to churn money in the system means that it’s difficult for anyone to know what the true picture is. By the time it gets reported, and audited the game has moved on.

Every year as a manager you do you best to manage and profile your spend to get value for money.

Now let’s not get started on VFM that will come up in a later blog.

A while ago in quarter two I was told that I was going to over spend by the end of the year by £2M (I was naturally quite worried) at the end of the following quarter I was going to underspend by £550K (now I was even more worried, did anyone know what was really going on?)

You could not make it up. What are you supposed to do!

Experience says keep your own information, so most of us keep our own spreadsheets just in case. They obviously sit outside of the main financial system, possibly even on memory sticks, but don’t tell IT as its against the policy to stick anything dodgy into your USB port.

At least having your own records gives you something to argue with when the accountant tries to manage your codes and your budget for you, and gets you in to hot water.

Ironically the latest accountancy system was introduced to remove the need for all those spreadsheets, but I am really glad that I secretly kept mine. It’s duplication of effort, but you cannot be too careful.

Another thing that bugs me is that fact that you are accountable for the budget and its spend, but the accountants mysteriously have secret powers to enter the system and move numbers around, seemingly at will, to balance things out for that all important financial report.

Overspends of course remain the managers problem.

This can be hugely frustrating when the overspend is cause by a cock up in accountancy when a Zero or the comma in the wrong place. Opps sorry these things happen!

Can you give me an explanation of the reasons for the overspend, and what you intend to do about it for the Management Team report. Oh and by the way the Director of Finance needs it by tonight.

The irony is that the budget is pored over and used as some amazing tool that informs our decision making.

In truth it’s a lagging measure, historical information regurgitated at various meetings to show everyone that we are in balance for the year against the agreed allocation of spend.

This whole exercise is an arbitrary judgement made largely on the basis of rolling forward previous years spent plus or minus a percentage.

It has little relationship to community or customer need, and gives us little if any information about true end to end operational cost of the services being delivered.

Why?  Because budgets are apportioned to hierarchical structures and further subdivided into functions and cost centres causing the system to sub optimise.

In practice this means that individuals manage the money that they have been allocated and spend it on the part of the organisation for which they have responsibility.

Simple really.

The issue is that each of us looks after our bit and has little, if any, focus upon the impact this has upon the customers that we are all here to serve. This in fact drives massive inefficiency and therefore cost into delivering essential services.

The result is that the organisation runs very inefficiently, but few people realise that this is the case because they are focused on their bit. The drive for efficiency only compounds the problem faced by many organisations.

Salami slicing or prioritisation of spend via a lottery causes individuals to act in a territorial way to protect spend in their area. It’s human nature.

The true cost of the system is in the flow – how things actually move around the organisation, not in unit cost.

Only by studying the organisation as a system can you begin to understand where and how to act to improve service and reduce operating cost.