Merchant Payment Processing Case Study
The Scenario
Paragon’s customer was one of the world’s largest providers of merchant payment processing services.
The company supplies a variety of outsourced in-bound contact centre, data processing and customer support services to many major companies.
The Challenge
The company operated an Electronic Funds Transfer (EFT) process for SME customers of the UK clearing banks to make salary payments to staff. The operation included a help desk, data processing and a customer services operation. The services provided varied widely in complexity and in the skill levels required of staff. In addition, there was a large variation in transaction volumes - peaking in the middle and end of each month. Accommodating these variations provided a major service quality and cost control challenge as the client had become dependent on agency staff at times of peak demand. Consequently, a major priority was to make better use of employed staff and minimise the use of temporary staff.
Any operational planning also needed to demonstrate high resilience – service levels could not be allowed to deteriorate unacceptably if demand varied above expectation or in the face of operating problems such as staff absence.
With so many conflicting factors to consider it was decided to commission a simulation model to help analyse and optimise the operation of the EFT process service centre.
The Solution
Paragon constructed for the customer a highly configurable model of their service centre. The model incorporated all the factors that would affect performance and the interactions between them.
Options for improving performance that could be tested included:
- Re-designing the task-sequence & work-content in the customer service centre
- Altering the number of people & their skill set
- Introducing new technology to reduce effort per task or increased reliability of task outcome
- Changing the staff contract to introduce flexible (annualised) hours and using overtime & agency staff to varying degrees
- Changing the job allocating priorities to improve response times
The model was designed to accurately capture real-life performance metrics such as:
- Revenue, cost & margin with breakdowns by customer and service
- Service-level & response time with varying demand
- Utilisation of staff & equipment in different areas of the operation
The performance reports showed:
- Comparison with the current operation to give confidence in modelled versus actual performance
- Results and comparison of alternative operational ideas as a quick method to rank & short list the most promising ones
- Detailed breakdowns allowing the best operational ideas to be further improved
The Benefits
The model is now used by Paragon’s customer to accurately plan the number of working hours and the staff skill levels required to deliver contracted service levels over a rolling 3 month period. The model predicts unit process costs, staff utilisation, under/over supply by skill-type & customer service levels for different demand patterns. Alternatives can be investigated and the model will analyse expected performance and associated costs.
The flexibility of the model is such that the client can, through the Scenario Manager, accommodate business changes such as the capacity and operational revisions and additions required for new customers and services, thus ensuring that it will be a useful planning tool for many years.
The following screen shots illustrate how the simplicity of the user-interface and the clarity with which the results are presented allowing the customer to investigate various planning options and to gain confidence in the results before implementation.
