TransUnion serves consumers and businesses across multiple lines of business in South Africa and in selected neighbouring states. Operating in a fiercely competitive industry, the organisation is focused on evolving its business from a holding company model with discrete, self-contained business units to an integrated shared services model that is able to support go-to-market activities for each line of business.
The objective behind these changes in operations and business structure is to become a more customer-centric organisation that provides improved customer service and efficiencies, optimised use of data and enables growth through focus and simplification.
In order to meet TransUnion’s requirements for a full business process outsource, the team ensured they had an in-depth understanding of the complexity of the client’s operations, its business drivers and its strategic objectives.
TransUnion recognised that its core business centred on servicing its customers via the management and procurement of data. It also acknowledged that its contact centre and business process outsource services are disciplines in their own right which require expertise and experience for optimal service delivery. In recognition of these factors and the strategy needed to enable such change, TransUnion made the decision to outsource the operations for three key lines of business to an appropriate partner.
TransUnion’s criteria for selecting an outsource partner were based on the following:
- Specialist supervisory and managerial skills that are focused on ensuring customer service excellence and efficiency
- Strong cultural alignment between TransUnion and the prospective outsource partner
- A specialist approach to learning and development
- Career management opportunities for current and future TransUnion personnel
- Focused and effective HR practices related to the nature of the work
TransUnion engaged Merchants to deliver a convincing business case as part of the outsource partner selection process. Merchants was asked to demonstrate the cost benefits of outsourcing, and to illustrate how it could deliver improved customer service and benefits to the greater TransUnion business.
TransUnion identified three lines of business that would need to be outsourced and operational requirements would include the transfer of 146 permanent and contract staff members from the Credit Bureau (CB), Automotive Info Systems (AIS) and Cheque Guarantee Services (CGS) in South Africa.
The Credit Bureau targets consumers and commercial businesses and is strictly regulated and governed by the National Credit Act. Auto Information Solutions provides automotive industry data to auto dealers and Cheque Guarantee Services assesses the risks related to cheque payments and provides guarantees for approved cheques.
Along with operational requirements, TransUnion had an existing outsourcing strategy driven by shareholders in North America to offshore and outsource to India. For this reason, the proposed Merchants solution needed to demonstrate the comparative benefits and business value of outsourcing to Merchants in South Africa as opposed to India.
Merchants commenced its engagement with TransUnion by conducting a four-week due diligence assessment of the operations of CB, AIS and CGS. The assessment provided key insights into existing business practices and processes, and Merchants consultants were able to identify re-engineering opportunities and areas for improvement to achieve operational efficiencies and improvements in customer service.
The analysis and assessment exercise involved meeting executives and senior managers across the relevant business areas and engaging several subject matter experts in the process. In order to meet the TransUnion’s requirements for a full business process outsource, the team ensured they had an in-depth understanding of the complexity of the client’s operations, its business drivers and its strategic objectives.
To achieve TransUnion’s objectives of eliminating duplicate overheads and driving operational efficiencies through shared services, the insight gained through the assessment provided Merchants with an opportunity to propose an end-to-end solution that would support the business case for what was a large transformation initiative.
The Merchants team presented a solid business case explaining the implications of the alternative option of offshoring South African business operations to India. Perhaps most importantly, it included the ‘softer’ elements which were critical to TransUnion such as job retention and service execution in South Africa.
Issues around language are important to TransUnion and would have required operations to be split and Merchants provided proof of these offshoring realities, layered with operating models to demonstrate the challenges
The cornerstone of the Merchants value proposition centred on TransUnion’s commitment to its people and the development and retention of jobs onshore. Compared to the cost differential offered by other offshore destinations, the team highlighted issues around the capabilities of existing staff under the strategic operating model and certain core competencies required to provide services in Southern Africa. The team also identified a higher than average proportion of staff with long tenure and a lack of career progression opportunities, which put the intellectual property at risk.
The decision to outsource a third of its operations to a strategic partner involved the crucial move away from a silo-based approach to a shared services model that could be provided by Merchants. The team also identified weak management information and reporting, and issues around quality and day-to-day staff management.
Facilities and Information Technology
The existing premises were expensive and staff members were located across different buildings. The Merchants assessment identified largely disparate technology systems that were outdated and no longer fit for purpose. The new location is central, close to amenities and cost effective for staff in terms of travel. The new working environment is more comfortable and all staff will be located in one building. TransUnion branding of the new operation will ensure staff feel the same sense of belonging as before.
In addition, the solution adopted by Merchants incorporates an integrated telephony platform across all three business units.
Phased transition Programme
The assessment resulted in a well-defined roadmap for improvement that included a three-step phased programme beginning with a transition phase, followed by two business improvement phases.