Improving Customer Communication in Pension Fund Administration

In the professional services industry, efficient communication with clients is essential. For pension fund administrators, this becomes even more critical, as clients need clarity regarding their benefits, contributions, and payouts. This case study demonstrates how Lean Six Sigma (LSS) methodology was applied to reduce the volume of customer inquiries at a pension fund administrator, while improving operational efficiency and customer satisfaction. 

The Problem 

A financial services company experienced a significant increase in customer calls about income statements. This surge overwhelmed the team, reducing accessibility and customer satisfaction. In the first quarter of 2017, it was found that 73% of customer inquiries were driven by just eight key processes out of the 44 total handled by the department. 

The Senior Manager of Operations identified that tackling these high-frequency issues could significantly reduce call volume, cut costs, and improve the customer experience. A target was set to reduce calls related to salary processing inquiries by at least 30%. At the time, the call rate was 13.6%, which equated to 5,912 calls from a customer base of 43,544. 

The Approach 

The financial services company used the DMAIC (Define, Measure, Analyze, Improve, Control) methodology, a core Lean Six Sigma framework, to address the issue systematically. 

Define Phase 

The project’s first step was to identify critical customer concerns. A Voice of the Customer (VOC) analysis revealed that unclear information on income statements and issues with the pension website were the primary drivers for the high call volume. A project charter and stakeholder analysis were completed, securing senior management’s buy-in due to the potential financial and customer service improvements. 

A SIPOC (Suppliers, Inputs, Process, Outputs, and Customers) diagram mapped the processes from income statement preparation to customer inquiry resolution, highlighting areas for improvement. 

Measure Phase 

Data collection followed. The team analyzed thousands of call records to determine why customers were reaching out. A CTQ (Critical to Quality) analysis linked customer concerns to specific issues with the income statement process. The primary metric, or “Y,” was the call rate, which was measured to define a realistic reduction target. 

Analyze Phase 

Using tools such as Value Stream Mapping (VSM) and hypothesis testing, the team uncovered the root causes of the high call volume, including: 

1. Ambiguities in the income statement form, prompting customers to seek clarification. 
2. Website login issues that frequently locked customers out. 
3. Delays in IT response times, leading to unresolved customer problems. 

The analysis also revealed internal bottlenecks, such as over-reliance on manual processes for handling inquiries and IT-related problems. 

Improve Phase 

With root causes identified, the team implemented solutions:

• A new form module was developed to eliminate ambiguities in the income statement, allowing customers to calculate their contributions independently. 
• A pilot program tested automated customer communication updates to reduce calls for status checks. 
• Website improvements, including better login support and automated password recovery, were rolled out. 

Team members also received additional Lean Six Sigma training to support the project’s long-term goals. These improvements directly reduced the call volume. 

Control Phase 

To sustain the improvements, a control plan was implemented, which included setting up a dashboard to monitor key performance indicators (KPIs) like call rate and response time. 

Standardized processes were introduced for updating customers on their inquiry status through the website, further reducing calls. 

Continuous monitoring of performance was ensured by assigning a senior employee to manage control charts and performance data. Weekly progress meetings helped to review improvements and make adjustments where necessary. 

Challenges and Lessons Learned 

Despite the project’s success, several challenges emerged: 

1. Employee Resistance: The IT team, in particular, struggled with the changes. Employees who traditionally handled data processing were hesitant to adopt new flexible work strategies aimed at reducing call volume. 
   • Solution: Regular meetings were held to address concerns and incorporate employee feedback into process changes, ensuring buy-in. 
2. IT Implementation Delays: Key improvements, such as the new form module and automation of response letters, faced delays due to coordination issues between departments. These delays impacted the project’s ability to meet all goals within the timeline. 
   • Lesson Learned: More rigorous prioritization of IT improvements and regular follow-up meetings were necessary to ensure progress. 
3. Setting Realistic KPIs: Initial KPIs were adjusted after it became clear that the company and the pension fund board had different expectations for call volume reductions. This highlighted the need for clear, shared goals from the outset. 
   • Solution: Through negotiations, better alignment of KPIs was established between all stakeholders. 

Results and Benefits 

Although the project did not fully achieve its goal of reducing call volume by 30%, substantial progress was made: 

• The call rate decreased from 13.6% to 10.5%, resulting in a 16% reduction in call volume. 
• Financial savings of approximately $30,000 were realized. 
• Customer satisfaction improved, as reflected by fewer calls and faster response times. 
• The organization is now better equipped to handle customer inquiries through improved digital services, with the expectation that automation will further decrease call rates. 

Conclusion 

This Lean Six Sigma project demonstrates how a structured approach can lead to substantial operational improvements. By utilizing tools like VOC analysis, SIPOC diagrams, and DMAIC methodology, the project team addressed specific pain points, reducing customer call volumes and generating financial savings. 

While challenges such as employee resistance and IT delays were encountered, the overall improvements to processes and customer satisfaction were significant. Lean Six Sigma provided a roadmap for success that other organizations in the professional services industry can replicate.