Competitor Analysis of Htc
The United Kingdom Passport Agency The situation prior to the implementation of the new computer system The agency employed around 1800 staff in passport offices at Belfast, Glasgow, Liverpool, London, Newport and Peterborough. London also housed the headquarters. The agency’s main aim was to provide passport services for British nationals in the United Kingdom promptly and economically. Included in its targets were: ¦ to maintain a maximum processing time of 10 working days throughout the year for straightforward, properly completed applications to meet customers’ declared travel dates for at least 99. 99 per cent of passports issued ¦ to recover the full cost of the passport service.
Since its creation in 1991 the agency had dealt with a steady increase in the number of passport applications. In the last year before the computer system was introduced the figure was around 4. 9 million, a slight fall from the previous year’s 5. 1 million. The agency’s annual forecasts of demand were reasonably accurate.
The forecast for the first year of the computer system estimated demand at 5. 1 million.However, shorter-term forecasts of monthly demand were not so accurate. For example, monthly variances of actual demand against that forecast averaged nearly 30 000 applications during a sample period. There was always a backlog of applications, which rose during the busy period. The backlog varied from its lowest point of around 80 000 applications in December to its highest peak of nearly 300 000 in June.
Capacity was increased by overtime working and recruiting casual staff. The maximum processing times had steadily increased, and in the last two years the agency’s target of 10 days had been breached.In July the maximum processing time reached a record high of 18 days. The most recent annual figures showed that full costs were ? 93. 6 million and income was ? 89.
6 million, leading to a shortfall of ? 4 million. Since 1991, the unit cost of processing a passport had fallen by over 26 per cent in real terms, from ? 13. 74 to ? 10. 14. The plan to introduce a new computer system The agency completed a review of its passport process and concluded that: ¦ the existing procedures and equipment were outdated secure procedures and better technology, including digital photography, were needed to reduce the scope for fraud.
The agency decided that it would raise two private finance contracts. One contract would be for a new computer system to deal with the initial processing of applications. The second would outsource the digital printing and despatch of new passports from a central site. Only examining and authorizing passports would continue as an in-house function. This decision was based upon an analysis of the various options on volumes ranging from 3.
5 to 4. 7 million.The agency was strongly influenced by the attractiveness of transferring responsibility to the private sector for areas such as system design and implementation, maintaining service levels, responding to changes in the volume of applications and providing technological updates. The plan was to roll out the new computer system to the various offices over a five-month period covering the low demand months between October and February. To ensure that it could tackle the usual seasonal rise in applications the agency planned to start implementation at its largest offices (Liverpool, Newport and Peterborough).
Liverpool would go live at the beginning of October. The roll-out to the other offices would take place once Liverpool achieved its normal output under the old system, i. e. 30 000 issues per week. This would be achieved within six weeks. Siemens obtained the contract to provide initial processing and the new computer system.
The final printing and despatch contract was awarded to Security Printing and Systems Ltd. This contract guaranteed the supply of a minimum volume of two million new passports a year to Security Printing and Systems Ltd. Failure to achieve the minimum would invoke penalties for the agency.Before the first office could go live in October the agency had to ensure that: ¦ all issues involving staff transfers to Siemens had been resolved ¦ the new system met the agency’s needs and was adequately tested prior to implementation. Implementation of the new computer system The development of the new secure printing system proceeded according to the schedule. The initial processing and examination system did not go so smoothly and this is the focus of the remainder of the case.
In order to transfer staff to Siemens, all personnel were interviewed to identify the preferences of individuals.It took until October to agree the final list of all staff transfers. The design stage took four months longer than expected, as the agency and Siemens sought to clarify each other’s intentions and agree the system’s specification. Testing was therefore four months later than planned. During the factory tests agency staff became aware that the examination stage was taking much longer than under the current method. Further tests of this were planned prior to Liverpool going live, but these never took place due to the lack of time.
Trials of the scanning technology suggested that errors dealing with hand-written documents would be high, but the project staff took the view that the trial was not representative. They argued that real applications would be filled in with greater care. Training in the use of the new computer system started at Liverpool in September. Feedback from the staff suggested that the training had been a success, but there were reservations that the clerical procedures needed to support the new system had not been thoroughly addressed. The new system started at Liverpool on time.Preparations in the Newport office were begun before Liverpool went live.
These preparations included new office layouts, recabling of the IT network and staff training. By 14 October it was obvious that the target of 30 000 issues per week would not be achieved within six weeks. The agency revised its criteria, deciding that Newport should proceed as long as there were no outstanding serious problems and that output at Liverpool was likely to be nearly 10 000 issues after four weeks and around 20 000 by six weeks. The agency decided to transfer the new system to Newport on 9 November.By this date Liverpool had actually only achieved 6200 issues per week. However, the testing at Newport had gone well.
In addition, changing Newport back to the old system was viewed as a difficult and timeconsuming task. Any delay also meant delaying the whole plan until the Autumn. This would have meant incurring extra cost for maintaining the old system. Moreover, Liverpool alone could not maintain the guaranteed minimum volume for Security Printing and Systems Ltd. The potential penalty of relying solely upon Liverpool was ? 3 million.
By mid-November output from Liverpool and Newport was 10 000 per week.On 18 November the agency deferred the further roll-out of the new system until both Liverpool and Newport achieved minimum outputs of 30 000 issues per week. It took nearly six months for this to be achieved, with Newport improving quicker than Liverpool. Peterborough, which had been preparing for the new system, had to revert to the old method. This meant Peterborough was idle for 10 days. The results of the implementation The technology led to a situation that the media described as chaotic.
Among the results were: ¦ the volume of processed applications fell dramatically ¦ the backlog of asylum and refugee cases grew enormously the queues of personal callers to the passport offices stretched for hundreds of metres ¦ many telephone calls went unanswered ¦ sacks of letters were left unopened around the offices. News of the problems in the media led to a surge of applications. At their peak, the maximum processing times across the offices ranged from 25 to 50 days. By June 565 000 applications were waiting to be processed. This compared to a maximum of 300 000 in the previous year.
Overtime increased substantially. Staff were working on average four days overtime per month. To maintain the overtime levels needed the agency ntroduced hourly bonuses. These reached ? 20 per hour in July and August. The Home Office authorized the recruitment of 300 extra staff. Because of the time needed (two and a half months) to train new examination staff it was only by July that 276 extra passport examiners were in place.
The agency avoided publicizing its delays for fear of fuelling demand. From March staff gave interviews in response to requests from national and regional media, but at no time did the agency develop a formal communications strategy. The volume of telephone calls overwhelmed the agency between March and July.The agency changed its recorded message to advise callers to write or fax. However, the number of written queries quickly exceeded the agency’s ability to cope. A call centre was set up by the Central Office of Information and this eased the pressure from early July.
At the end of June the Home Office introduced a series of emergency measures, including free two-year passport extensions from the Post Office and the recruitment of 100 staff in addition to the 300 already authorized. By the end of August the backlog was down to 74 500 and processing times were within the 10-day target.The company responsible for the computer system, Siemens, had its contract fee reduced by $4. 5 million for the delays. Note: this case is based upon the National Audit Office report into the United Kingdom Passport Agency (ref: HC 812 Session 1998–99).
Questions 1 Why did the agency decide to invest in new computer technology? 2 What were the strengths and weaknesses of the agency’s plan? 3 What were the strengths and weaknesses of the implementation of the new computer system? 4 What lessons can public sector organizations draw from this case? Are these lessons applicable to the commercial sector?