Innovations in Partner ManagementInnovations in Partner ManagementDan P. WiersmaSVP Service Platform
Sony Service StrategySony Service Strategy
♦ How has Sony?– Selected vendors
– Leveraged partners’ strength
– Minimized partner’s weaknesses
– Set up Performance Measurement Systems
– Managed the relationships
– Established a management structure
– Reduced Costs
– Improved Customer Satisfaction
Our Look Today – Partner Management InnovationsOur Look Today – Partner Management Innovations
Sony CorporationSony Corporation
♦ Established 1946; Tokyo, Japan as Tokyo Tsushin Kogyo, Tokyo Telecommunications Engineering Company, Ltd. by Masaru Ibuka and Akio Morita
♦ Changed to Sony in 1955♦ Today the company consists of
– Electronics– Games– Pictures– Sony BMG Music– Sony Financial Services– Sony Insurance– Sony Ericsson
♦ FY 2005 Sales; ~$70B USD♦ Electronics is the largest segment at ~$50B
– SEL (Electronics US Operation) is the largest of the regions in terms of sales
Sony in the US (SEL)Sony in the US (SEL)
♦ #1 Brand in America (2005 Harris Poll)
♦ Sales, Marketing, Manufacturing, Engineering, Service and Support Operations
♦ >15,000 employees
♦ >10,000 products in TV, Digital Imaging, Home Audio, Home Video, Personal Audio, General Audio, eVehicle, Broadcast & Business, Storage and Components
♦ HQ facilities located in San Diego
♦ Multiple facilities located in the US and Mexico
Sony Service PlatformSony Service Platform
♦ Cost & Profit Center Structure♦ ~1400 Employees internally and 1000’s with our partners♦ Support over 10,000 active products and more than 20,000 total
(inactive and active)♦ Manage ~2M returns and repairs per year♦ Manage 3-4M total parts in inventory; 800K orders/1.7M lines
per year♦ Receive & respond to ~40M contacts per year
(Voice, Web, email, Chat)♦ Integrated Service for SEL Consumer Products
– Contact Center Management– Consumer & Vaio Repair/Refurb Service (In Home & Depot)– Repair Parts and Accessories– Product Regulatory Compliance– Customer Satisfaction & Quality Reporting
Service Platform OrganizationService Platform Organization
CE Service
V.P.
CE Service
V.P.
Call Center
V.P.
Call Center
V.P.
CS21 & Quality
V.P.
CS21 & Quality
V.P.
Repair Parts
V.P.
Repair Parts
V.P.
Dan WiersmaSenior Vice President
Dan WiersmaSenior Vice President
IT Service
V.P.
IT Service
V.P.
• Customer Satisfaction
• Quality
•10 WW centers
•800-1200 agents
•3+ million contacts/month
•Web, email, chat, and phone
• Centralized parts warehouse
•Forecast, Plan & Procure
•Repair & Escalation Support
•Refurb
•ASC/Field Ops
• Repair & Escalation Support
•Refurb
•ASC/Field Ops
Before - Large number of Internal Service Operations
High costPoor CS
Little specialization
Before - Large number of Internal Service Operations
High costPoor CS
Little specialization
Now – Insourced andOutsourced Solutions
Much lower costMuch better CSATProduct experts
Now – Insourced andOutsourced Solutions
Much lower costMuch better CSATProduct experts
Sony Service StrategySony Service Strategy
Strategic Re-Engineering of Internal Service NetworkStrategic Re-Engineering of Internal Service Network
Sony Service StrategySony Service Strategy
Sony Service Platform set up newPartner Management System to meet goalsSony Service Platform set up newPartner Management System to meet goals
Excellent
Customer
Satisfaction
Excellent
Customer
Satisfaction
Strong
Financial
Results
Strong
Financial
Results
Growth & Expansion
of the Business
Growth & Expansion
of the Business
CoreCore
Non Core High External Value Added Capability
High Customer Touch & Technical Capability
Innovation- Determine Core & Non-CoreInnovation- Determine Core & Non-Core
Segments:- Repair Centers- Refurb Centers- Call Center Providers- Warehousing
Consolidation:- Laredo (internal)- Solectron- Alorica- New Breed
Innovation - Determine What You Do BestInnovation - Determine What You Do Best
♦ Lesson learned – we had a very clear guide as to comparable metrics between internal and external servicers.
♦ Advantage of an insourced solution.
♦ Allowed us to determine what is best internally and what is best externally.
DIGA/ HA/ HV/ ME
Action – De-authorize categories
TV
“Sweet spot”“Sweet spot”
Innovation -Select Best in Class PartnersInnovation -Select Best in Class Partners
♦ Lesson learned – once we had clear metrics, we could determine a clear ranking system to pick good versus bad providers
♦ Developed a complex algorithm to rank servicers by our 6 metrics – TAT, TAT>12, CR, CS, Cost and Fraud.
♦ We ranked our servicers on the two metrics – Customer Satisfaction and Cost / Fraud
♦ Each servicer received a scorecard where they fell compared to their peer group
♦ Based on our metrics, we reduced over 600 servicers
TV MaxRate versus Performance Score
$-
$50
$100
$150
$200
$250
$300- 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0
Performance Score
Max
Rat
e
“Red is Dead”
Innovation -Partner with Good ServicersInnovation -Partner with Good Servicers
♦ Leveraged ability of key GOOD servicers..
♦ Select key partners in Digital Imaging (Precision Camera), Computers (Solectron) and TV (QualxServ).
♦ Sony and key servicers became true partners
– Sony drives business to them – phone, web, some exclusivity
– In return, high levels of performance and commitment
– Better rate / cost structure for both partners
TVDIGA/ HA/ HV/ ME
Key Relationships
Innovation-Partner with Good ServicersInnovation-Partner with Good Servicers
♦ Depot Repair – 3-day target TAT (Turn-Around-Time)
– Both Sony-internal & 3rd party
♦ Customer Self Repair (CRU)– 1-day target TAT
– HDD, ODD, Memory, Keyboards
♦ Onsite Repair – 2-day target TAT
– Standard on Desktops
– Optional/upgrade on Notebooks
Memphis, TN
ITD-Service-San Diego, CA
Service Self Help
Electronic Dispatch UPS Stores
Expanded Networks
ResultSony Controls User Experience
Better Customer Satisfaction
More touch points for customers
ResultSony Controls User Experience
Better Customer Satisfaction
More touch points for customers
Innovation-Extend Our Reach VirtuallyInnovation-Extend Our Reach VirtuallySony Offers Customers the Right SolutionSony Offers Customers the Right Solution
Innovation -Train and SupportInnovation -Train and Support
♦ Previously, we neglected our training and support functions
♦ Sony took the savings from our program and invested in “best in class” support:
– Technical Phone Support – hired seasoned ex-repair techs to man phone support lines to talk servicers through problems
– Technical Web Support – service manuals, FAQ’s, service bulletins and key tips on the web – servicers bring them on calls
– Comprehensive Training Program – utilizing live trainers; “train the trainers” at major dealers and web training
– Technical Call Support-training of our partner agents in products & technologies
– Soft Skills Support-working with our partners to insure non-technical training is offered and supported by their operations
Innovation-Train & Support (New Product)Innovation-Train & Support (New Product)
SonyTrainingCourse
Development
PartnerTraining
Department
CentraWeb-Based
Training
Partner Techs &Support
New
TV
Pro
du
cts
Pre-P
roduct
eB
n
t
Intr
oCo
urs
e
Par
tner
Tec
hTr
ain
ing;
Ser
vice
Courseg
ins
Product
io
Prod
uc
Rel
ease
Star
ts
om
te
Par
tner
Fin
ish
es
Trai
nin
g fo
r tr
iage
Co
urs
eC
ple
& T
ech
s
Mo
nit
ori
ng
Min Qualified TimeMin Qualified Time
Innovation -Train & Support (In Home)Innovation -Train & Support (In Home)
Partner Techs
PartnerTraining
Dept
PartnerTechnical Support
Center
Sony AnalysisOf
Exchanges Units
Sony Ride Along Program
w/Techs
SonyTraining
Dept.
Sony AnalysisOf
CRM Database
Training
Demand & Performance Training ProcessDemand & Performance Training Process
Innovation-Performance ManagementInnovation-Performance Management
♦ Establish clear performance level requirements linked to the business
♦ Review regularly; operational requirements dictate hourly, daily or weekly reviews of performance (e.g. Contact Center, Repair/Refurb partners)
♦ Establish minimum quarterly review meetings with senior management and operations management of both companies
♦ Partners should share in the benefits of improved performance above targets
Innovation-Performance ManagementInnovation-Performance Management
KPI TargetACD Metrics Service Level
ASA
Abandon
ATT
80% or above
< 60 secs
< 5%
Trends and comparisons
Handled vs. Forecast and Staffing
General overview
Detail/issues discussed in separate forecast meeting
100% (+/- 5 to 10%)
Voice of the customer
FCR
Agent Knowledge
Agent Courtesy
Agent Responsiveness
80% or above; focus on improvement
> 3.25 avg
> 3.25 avg
> 3.25 avg
Escalation/transfer rate CE < 8%
VAIO < 12%
Innovation-Performance ManagementInnovation-Performance Management
Threshold – X% / Target – Y% / Maximum – Z% FY’06 YTD -----
Threshold
X%
Target
Y%
Max
Z%You are
here
You are here
Month
# Surveys Received
# Surveys
YES %
# Surveys Received
# Surveys
YES %
# Surveys Received
# Surveys
YES %
# Surveys Received
# Surveys
YES %
# Surveys Received %
Apr-06 1405 973 714 454 536 313 864 524 3519May-06 839 579 587 360 379 216 593 366 2398Jun-06 791 550 644 385 343 198 626 359 2404Jul-06 890 588 657 402 342 197 795 472 2684Aug-06 994 664 771 467 332 173 888 552 2985
HPD PMID Desktop Notebook Weighted Avg.
Innovation-Performance ManagementInnovation-Performance Management
OBA Results
July(WK1)
July(WK2)
July(WK3)
July(WK4)
Aug(WK1)
Aug(WK2)
Aug(WK3)
Aug(WK4)
Sept(WK1)
Sept(WK2)
Sept(WK3)
Repeat Repair Percentage
Aug (WK4) Sept (WK1) Sept (WK2) Sept (WK3)
WIP - Sony
June(WK4)
June(WK5)
July(WK1)
July(WK2)
July(WK3)
July(WK4)
Aug(WK1)
Aug(WK2)
Aug(WK3)
Aug(WK4)
Sept(WK1)
Sept(WK2)
TAT
Aug (WK4) Sept (WK1) Sept (WK2) Sept (WK3)
Repeat Returns
Repeat Returns
WIP WIP
Quality/OBA
Quality/OBA
TAT TAT
Innovation-Performance ManagementInnovation-Performance Management
Call Center Workforce Forecasting ModelCall Center Workforce Forecasting Model
All Products Offered
0
20,000
40,000
60,000
80,000
100,000
120,000
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Offe
r Cal
ls/w
eek
FY 2003 FY 2004 FY 2005 FY 2006
Forecast
Innovation-Performance ManagementInnovation-Performance Management
95 89
74
0102030405060708090
100
J J A
•Working with In Home Service Partners to identify issues creating missed service calls
•Constant Feedback to all Touch Points• Tier II• Service and Delivery• Partner 1• Partner 2• WRPC
• 22% Improvement
27
19
1311
97 6
0
5
10
15
20
25
30
Missed Appt Wrong PartsOrdered
Wrong PartsShipped
Missing Parts MissedCustomer
Parts OrderedWrong Location
Parts Returned
FIRST CALL RESOLUTION – VAIO Three Point Plan FIRST CALL RESOLUTION – VAIO Three Point Plan
Issue: Missed On-Site AppointmentsIssue: Missed On-Site Appointments
Innovation-Partner Management StructureInnovation-Partner Management Structure
♦ Lessons learned; establish key management resources to manage the partner relationships
♦ Each functional partner relationship in Sony Service Platform has a partner management team (e.g. Contact Center, In Home Service, Warehouse and Refurb)
ManagerEngineering
ManagerEngineering
Vaio ServiceVice President
Vaio ServiceVice President
ManagerOperations
ManagerOperations
ManagerMarket Quality
ManagerMarket Quality
Sr. ManagerVOSC
Sr. ManagerVOSC
ManagerService
Partners
ManagerService
Partners
ManagerProcurement
ManagerProcurement
Innovative Partner Benefit ExamplesInnovative Partner Benefit Examples
♦Consumer Service-In Home
– Outsourced our internal In-Home solution
– Clear Communication Path
– Innovated a new in-home service solution
– Used the web to drive customer inquiries and scheduling
Before:♦ In-home TV service a part
of Sony Service
– Limited coverage
– High costs
– Average customer satisfactionNow:
♦Sony In-home techs a part of QualxServ
Pros:– Product expertise transferred
– Internal In-Home service cost eliminated
– Cross-training opportunity
– Increased national coverage at lower cost
– Improved Customer Satisfaction
QualxServ-Sony’s In-Home Service PartnerQualxServ-Sony’s In-Home Service Partner
RepairRepair
RepairRepair
RepairRepair
RepairRepair
RepairRepair
RepairRepair
RepairRepair
RepairRepair
• Process Expertise• Unified Customer Interface• Eliminate Fraud
Hard Fraud – Parts TheftSoft Fraud – Solder / Alignment
• Combined Repair Status Reporting• Daily Reporting and Visibility• Field Q.C. Feedback
• Process Expertise• Unified Customer Interface• Eliminate Fraud
Hard Fraud – Parts TheftSoft Fraud – Solder / Alignment
• Combined Repair Status Reporting• Daily Reporting and Visibility• Field Q.C. Feedback
• Focused Account Management• Consolidated Claims Handling &
Customer Satisfaction • Daily Status Reviews
• Focused Account Management• Consolidated Claims Handling &
Customer Satisfaction • Daily Status Reviews
InIn--Home TV ServiceHome TV ServiceSingle communication channel = better account
management & partnership
Single communication channel = better account
management & partnership
QualxServ-Clear Communication/Escalation PathQualxServ-Clear Communication/Escalation Path
Calls Sony Call Center - Tier 1(Call Avoidance)
Call Dispatched
Troubleshoot
SchedulesIn-Home Service
Order Parts
Dispatches TechRepair
Completed
Customer Sony QualxServ
Calls Customer( Tier 2 – Triage )
Parts Center
QualxServ-Joint Triage Increases CSATQualxServ-Joint Triage Increases CSAT
Call
Web
Self –Scheduling
2. In-Home Solution
1. Self Serve Solution or
www.updatemytv.com
Self-ServiceScheduling
Reduced Calls & Costs
Self-ServiceScheduling
Reduced Calls & Costs
QualxServ-Web Solution for SW UpdateQualxServ-Web Solution for SW Update
Huge Project for Sony76% of events handled viaWeb / Self - Scheduling
End User
CISC
Software Distribution
Success Factors in Partner ManagementSuccess Factors in Partner Management
♦ Business strategy
♦ Select Best in Class Partners
♦ Solid Service Level Agreement (SLA)
♦ Train & Support the Partners
♦ Provide regular performance management process
♦ Create a Partner Management Structure
♦ Create an environment of open communication and partnership; not just a vendor