Helping Fonterra achieve high performance with a new

Helping Fonterra achieve
high performance with
a new global support
organization
New Zealand’s Fonterra Cooperative Group
Ltd. (Fonterra) is one of the top selling dairy
companies in the world. It is also the world's
leading exporter of dairy products, responsible
for more than a third of international dairy trade.
The cooperative’s global supply chain travels
from farms all over New Zealand to customers
and consumers in more than 140 countries.
Fonterra is owned by more than 11,000 New
Zealand dairy farmers and employs 16,400
people. In 2008, the cooperative reported annual
sales over a 14 month period of NZD$19.5 billion
(approximately US$9.8 billion).
Business challenge
Fonterra occupies a unique position in the
worldwide dairy market. The company exports
95 percent of its product—or the equivalent
of more than 13 billion liters of milk each
year—to a customer base that stretches across
140 countries. To manage this expansive
enterprise, Fonterra historically relied on a
distributed business model. Within this model,
the cooperative applied a decentralized
approach to customer service placing the
primary responsibility for managing, nurturing
and growing customer relationships into the
hands of Fonterra’s 1,000 or so overseas sales
professionals and support staff.
In addition, many customer management
services—such as order fulfillment—fell
outside the scope of what local sales
representatives could deliver. To
arrange for shipments or monitor the
navigation of their orders through
various customs agencies, for example,
customers needed to interact with
several Fonterra resources dedicated to
overseeing those complex supply chain
functions. Fonterra recognized that
these disjointed sales and distribution
processes potentially threatened to
erode the customer relationships that
Fonterra had established over the years.
As part of an enterprisewide effort
to centralize many of its business
operations, Fonterra decided to create
a global customer service center in
Auckland that would provide a single
face and more consistent level of service
and order processing to customers.
For help in launching its customer
service transformation, Fonterra
sought out a company that not only
had deep skills in customer relationship
management (CRM) and the underlying
technology, in this case SAP, but also
had the ability to create a world-class
customer service center from scratch
under a turnkey arrangement. Accenture
fit the bill. In addition to broad business
proficiency, Accenture offered a
global delivery capability, industry
insights, business-value driven SAP
skills and a proven record of helping
companies transform their customerfacing operations. Most important,
Accenture had already demonstrated
its commitment to helping Fonterra
achieve high performance. Since
the cooperative’s formation in 2001,
Accenture helped the organization
design a global operating model
that emphasized shared services and
centralized business functions.
How Accenture helped
Customer service has long been
recognized as an area that can have a
significant impact on a company’s top
and bottom lines. In fact, Accenture
High Performance Business Research
has found that one of the characteristics
of high-performance businesses is their
ability to create and take advantage of
a set of distinctive capabilities—which
include those related to customer
service—that are hard to replicate and
can differentiate a company from their
competitors. Fonterra clearly understood
this mandate for superior customer
service. It was equally aware of the
challenges associated with building a
global customer service capability to
support its expanding business.
performance and technology specialists,
the team developed a highly efficient
and cost-effective organizational
structure, as well as new human
resources (HR) processes. It also created
detailed strategies for agent recruitment
and retention. The team then laid out a
roadmap to make sure the new agents
would be able to maximize the value
of new service center technologies,
including SAP CRM.
To assist Fonterra with these challenges
and steer it on its continuous path
to high performance, Accenture
assembled a global team of experienced
professionals from a number of areas,
including customer relationship
management, talent and organization
performance, supply chain management,
learning and technology enablement.
This team of specialists focused on
creating a customer service center
that would deliver the optimal service
experience for Fonterra customers
and reduce the cost of customer
management and order fulfillment.
The challenge was enormous. Fonterra
was clear: it wanted the facility to be
a showcase, representative of a worldclass organization. It also wanted the
center to be operational in just eight
months.
Drawing on its substantial network of
SAP specialists and a global leadership
position in SAP-based solutions and
services, Accenture leveraged an SAP
CRM based solution that facilitated
service delivery by providing center
representatives a single, on-screen
view of customers, their orders, their
histories and outstanding issues.
In addition to the SAP solution,
the center’s technical backbone
was based largely on interactive
voice response (IVR) and Internet
protocol (IP) telephony that routed
calls appropriately. Resources from
Accenture’s internal CIO organization
joined Accenture’s technology and SAP
professionals to install and integrate
these solution components with the
new CRM system. Accenture’s alliance
relationship with communications and
services provider, BT, and systems and
applications provider, Avaya, helped
Fonterra negotiate favorable contracts
for telecommunications services and
equipment.
The Accenture team immediately set to
work on designing a customer service
center that would operate 24 hours
seven days a week, 365 days per year.
This phase focused on creating a new
operating model and entirely new
service and order fulfillment processes.
Based on an assessment of the business
requirements and customer needs, the
team determined that the new center
should house 150 customer service
agents, with support available in eight
languages. The team also agreed that
service levels should be differentiated by
customer segment, with more valuable
customers assigned to dedicated agents
able to offer “high-quality,” personalized
service.
Next, the Accenture/Fonterra team
turned its attention to organizational
design. Drawing on the experience of
Accenture’s talent and organization
The final component of the design
phase involved working closely with
architects, designers and resources from
Accenture’s internal facilities area to
oversee the design and construction
of the new space, which occupied
the first floor of Fonterra’s Auckland
headquarters. The goal was to create
a highly functional space that would
enable a culture of customer service
that thrives and serves to showcase
Fonterra’s commitment to efficiency
and operational excellence.
With the design phase completed,
Accenture moved to get the new service
center up and running as quickly as
possible. In addition to managing the
overall service center implementation
(including the physical move to the new
facility and installation of the technical
infrastructure), Accenture talent and
organization performance professionals
worked closely with Fonterra to recruit
and mobilize staff. Recruitment proved
to be particularly challenging, given
the need to find local candidates who
not only had proficiency in a variety
of languages, including German and
Spanish, but also would be willing to
work night shifts to meet the needs
of customers in other time zones. By
enticing prospective employees with
advancement opportunities and looking
beyond the local market for talent,
the team was able to fill all vacant
positions.
The final phase of implementation
involved transferring knowledge of
customers from sales representatives
in approximately 25 global locations
to resources and systems within
the centralized customer service
center. Accenture played a key role in
launching an extensive on-boarding,
orientation and training program,
which combined computer-based and
instructor-led learning components
and was delivered by both Accenture
and Fonterra resources. The goal of
the training—which covered everything
from Fonterra’s products and the
center’s new technologies to principles
of customer service, supply chain
management, and order processing and
fulfillment—was to prepare agents to
provide end-to-end customer care from
day one.
With Accenture’s help, Fonterra opened
its new global customer service center
within just eight months, on time
and on budget. Over the next year,
Accenture and Fonterra grew the
center to be fully operational and able
to accommodate customers in eight
languages.
High performance delivered
The significance of the transformation of
Fonterra’s customer service capabilities
cannot be overstated. The project
marks a remarkable achievement, in
terms of both the speed with which the
cooperative created its new center from
scratch and the improvements evident
in customer care and reductions in cost
to serve.
Today, Fonterra is able to offer its
customers an easy-to-use, 24 hour,
seven day a week, 365 day a year
channel to address their customer service
needs. Customers dial the service center
via a local toll-free number. The center’s
IVR system recognizes the location of
the call, welcomes the caller in his or
her native language, and routes the call
to the appropriate representative. For
highly valuable customers, the call is
routed to a dedicated agent. At the same
time, IVR technology communicates
with SAP CRM, prompting that system
to call up the correct customer account
information for the agent. Similar
routing occurs for e-mails and fax
inquiries.
Offering “global coverage with a local
touch” was a key requirement for the
Accenture and Fonterra team. However,
from its previous experience, Accenture
knew that having easy-to-reach,
dedicated agent support was not the
only determinant of superior service. A
2006 Accenture survey of consumers in
the United States and United Kingdom
confirmed as much by revealing that
the ability of customer service agents
to address a full range of needs was, by
far, the single most important aspect
of a satisfying service experience.
Fonterra now excels in this regard,
too. With its centralized operating
model and extensive training program,
customer service representatives have
the knowledge and skills to solve all
customers’ problems and answer any
questions customers might have about
their orders or about the supply chain
process. In fact, each agent is capable of
handling issues that previously required
the expertise and involvement of three
to four Fonterra professionals. This
eliminates the need to put customers on
hold or pass inquiries along to others,
two sources of tremendous annoyance,
according to Accenture’s customer
service research. For Fonterra customers,
the result is a streamlined, effective and
satisfying customer service experience.
Fonterra is benefiting from its new
customer service capabilities, as well.
The cooperative now operates with
consistent customer service processes,
which can be tailored to meet the needs
of various customer segments. It has
greater visibility into how well it meets
its customers’ service mandate. It is
able to assign accountability for service
delivery and resolve issues more easily
and quickly. And it is able to use the
centralized customer service data to
drive ongoing improvements in order
fulfillment and, of course, customer
management. All of these improvements
translate to better customer service,
delivered at significantly lower cost and
position Fonterra to become a highperformance business.
According to Matthew Foster, then
general manager of the Fonterra
Customer Service Centre: “A core part
of the program we undertook relied on
Accenture’s expertise and guidance to
centralize a number of business areas to
improve productivity and overall business
performance. Few of these efforts have
been as visible, as strategically important
or as quickly delivered as the creation
of our new customer service center.
Customer support is now a distinguishing
characteristic for us, and a capability
that positions us well for continued
success in the years ahead."
The success of this project is due, largely,
to the spirit of collaboration and trust
that existed between Fonterra and
Accenture. Accenture provided oversight
and expertise in a number of areas
such as CRM, talent and organization
performance, technology enablement
and strategy. Fonterra provided the
vision for a transformed customer
service capability that would protect its
market share and lay a foundation for
high performance. This combination of
commitment and skill has produced a
customer service center that is unique
to the industry and a model for others
looking to compete through customer
service excellence.
About Accenture
Accenture is a global management
consulting, technology services and
outsourcing company. Combining
unparalleled experience, comprehensive
capabilities across all industries and
business functions, and extensive
research on the world’s most successful
companies, Accenture collaborates
with clients to help them become
high-performance businesses and
governments. With more than 186,000
people serving clients in over 120
countries, the company generated net
revenues of US$23.39 billion for the
fiscal year ended Aug. 31, 2008. Its
home page is www.accenture.com.
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