ATM networks continue to experience unparalleled change; terminal upgrades, elimination of marginally performing units and new technology/functionality equate to a leaner and more effective delivery channel. Correspondingly, equipment service and maintenance needs – critical for uptime and customer satisfaction – are changing dramatically.
With these changes has also come the need for proactive service contract management. Equipment service changes do not happen automatically – and having the wrong service plan can result in excessive downtime, lowered customer satisfaction and wasted service dollars. Those Credit Unions taking a practical and informed approach to updating and renegotiating existing service contracts (including those long considered “sacred cows”) are being rewarded with improved service and significantly lower costs.
The good news; Credit Unions today do have options – and need not be held hostage to their existing service plans and/or remain paralyzed by confusion as they have in the past. The following 4 step plan addresses how the auditing and managing of ATM equipment service contracts can improve uptime, reduce costs and support the delivery of exceptional customer service.
Step 1 – Understanding Current Service Coverage
A review of your current equipment service data base (available by request from your current service provider) will identify what equipment they reflect as being at each location, what is or is not currently under service and what type of service coverage is being provided.
Unfortunately, the equipment listings you receive will (invariably) be outdated – and do not accurately reflect the true makeup of your current/updated network.
As a long time service consultant I have reviewed hundreds of equipment/service listings representing millions of dollars of service – it has been my experience, and without exception, that the listings I am provided are outdated/incorrect – and are frequently wildly different than reality.
As absurd as it may sound – I have yet to experience a situation in which a client was initially presented with what they considered to be a “clean” equipment/service listing by their current service vendor. The implications of this scenario supports my professional opinion (only); that the probability that Credit Unions today are receiving the appropriate ATM equipment service they need lies somewhere between zero – and not a chance.
Only through securing current/accurate network information – and comparing it to the service vendor listing will you reliably be able to identify and document:
- Units/locations that are no longer are in operation/being paid for
- Unwarranted and/or incorrect service coverage
- ATMs in operation without needed service coverage
While it can be a challenging process, developing this detail will be crucial in allowing you to evaluate service alternatives, needs and to identify opportunities for savings/cost reduction.
Step 2 – Understanding Service /Maintenance Options and Costs
After depreciation, equipment service/maintenance is the number one ongoing ATM network cost line item – representing 20% to 30% of all network operating costs. A number of variables directly impact service performance, response and costs – and by understanding relative service options Credit Unions can make informed decisions regarding their particular service needs and situation.
A few of the (many) items impacting service costs include:
- Equipment; ATM Model/Functionality – including base hardware and components
- Service Plan Coverage; Hours of service, Parts/no parts
- Minimum Service Performance/Response Time (Service Level Agreements)
- Contract Term and Conditions
Many of these items are variable in nature – and by developing an understanding of these options you can assess your current service coverage versus alternative service coverage. Knowledge is power – and by understanding what many service providers have not communicated in the past (i.e. what service options include, don’t include and what they cost), Credit Unions can make an informed evaluation of current versus alternative service coverage available.
Step 3 – Evaluating Your Service Needs, Expectations and Objectives
ATM uptime and customer access to the services they provide is essential to today’s banking business strategy. If your network is not consistently available to meet your member’s expectations there’s an excellent chance they will be taking their business down the street – to your competitor. The right service plan and service level agreement has a direct impact on network uptime. Matching available service plan options with service needs – and negotiating service contract variables effectively allow Credit Unions to significantly improve network uptime, member satisfaction and reduce costs.
For many, cost reduction alone can be the primary driver/objective in their service contract evaluation process. In my experience average/typical institutional savings of 25% to 45% are realistic – representing potential cost savings that can be in the hundreds of thousands of dollars.
By identifying, understanding and evaluating available service options – and developing a balanced plan between service expectations and cost reduction, organizations can realize the best of both worlds.
Step 4 – Develop Your Action Plan
After developing an accurate accounting of your current service situation – and establishing reasonable objectives/goals for where you’d like to get to – your remaining challenge is how to make it happen. Options include going at it alone – or getting there with some help.
Going at It Alone…
can be arduous, time consuming, confusing and for many – simply maddening. To be effective, the process will requires securing, auditing and deciphering a number of important pieces; including service plan and pricing documentation, service/no service considerations and trying to identify viable alternative service providers. One of the biggest challenges faced by many Credit Unions is simply making heads or tails of the information they do (or do not) receive; what it includes, does not include and what it all really means. A number of my clients have likened it to trying to understand a foreign language – without the help of a translator and/or dictionary.
Sadly, the sheer frustration of trying to tackle a task this daunting – and in light of other “priority projects” this project often ends up on the back burner or the “I’ll get to it next” pile. The end result; existing contracts are allowed to automatically renew year after year, costs continue to rise and available service improvements/cost reduction benefits are never realized.
This is a classic example of the status quo being bad for the bottom line – and when identified as happening – tends to drive senior level managers (and board members) simply crazy.
Leveraging Expert, Professional Help
Evaluation and effective negotiation of equipment service contracts requires a unique skill set – including in-depth understanding of ATM hardware, expected and/or typical repair and service needs, available service plan options, network/central management and competitive/market pricing.
An expert service analyst/consultant can help identify:
- Current service coverage/contract status – including problems and service gaps
- Potential/available service plan modifications
- Other contract variables; recommended changes and negotiation options
- Expected/realistic cost reductions as a result of these changes
Another benefit of expert help (and particularly important to Credit Unions with limited resources and or complex service needs) is that they can bring a proven set of tools and processes to the project that can save the client a tremendous amount of time and effort. This expertise – and a disciplined, structured approach to the project will greatly enhance the probability of attaining established objectives, cost reductions and service improvements.
Simply put – professional support allows projects to get done, done right and with significantly less frustration, strain and drain on internal resources.
Today’s business realities have changed – and the challenges faced by senior management as a result of a changing business fundamentals, technology and member expectations are daunting. Simply allowing the “status quo” to continue – and the inability/failure of the organization to manage “sacred cows” can represent a significant liability in today’s economy. The ability to competitively deliver strategic services and control costs has never been more important – and to do so requires proactive, informed and ongoing management. The opportunity to identify “low hanging fruit” remains – and with the right help can be realized without placing a significant drain on internal and/or limited resources.
The ability of Credit Unions to identify and realize these opportunities remains largely a management challenge. Only by setting clear, realistic goals and expectations – and allocating the required resources to attain them can management realistically expect and achieve success.
Tim Bergman is founder and principle at The Bergman Group (www.thebergmangroupinc.com) a consulting firm specializing in branch optimization, ATM and branch equipment specification, purchase and service/maintenance contract support. Tim has provided trusted expertise to the financial services community for over 20 years – and continues to help clients with managing costs, reducing waste and delivering focused, value added customer services.