Draft guidance note Channel Strategy Development Work program ...

Norwegian Tax Administration Draft guidance note: Channel Strategy Development Work program 2005-2006 OECD Taxpayer Services Sub-group meeting 11 October 2006 Gyda Folkedal Norwegian Tax Administration Planning and Development Norwegian Tax Administration Agenda for the Channel Strategy Development session  Presentation of draft document  Questions and answers (plenary session)  Workshops on selected topics (groups)  Main conclusions from workshops (plenary session)  Process towards final approval Norwegian Tax Administration Purpose of the guidance note  To promote the development of a channel strategy and to present ways in which that might be accomplished, based on experience from different tax administrations and other sources Norwegian Tax Administration Definitions of channel strategy - examples  A set of business driven choices of how and through what means services should be delivered to customers (e-Envoy)  A directive and differentiated approach that clearly guides customers to the most appropriate channel that meets both the needs of the customer and the organisation and achieves compliance at the lowest cost. (HMRC, UK) Norwegian Tax Administration About the work Part of Taxpayer Services Sub-group’s work program 2005-06 Task group of 5 countries  Australia, Canada, Norway, Sweden, USA  Later transformed into reference group incl. interviewed countries  Ireland, the Netherlands, UK  Sources of information  Qualitative interviews with channel strategists  Documents from tax administrations and other sources  Qualitative interview approach  Interview guide  Two interviewers and one to three interviewees in each tax adm.  Face to face, telephone, video conference, 1 ½ - 2 hours  Transcriptions  Results: Not only what, but also why and how – background, reflections, explanations, context sensitive...  Gave better understanding of other relevant info and documents   Norwegian Tax Administration Status draft document  Comments, adjustments and additions received from reference group are integrated in draft presented for Sub-group meeting  Document contains relevant and interesting information and insights about different types of approaches and experiences  Some themes/chapters can be further developed  Room for further improvement of the document structure to increase readability and coherence - table of content will change Norwegian Tax Administration Presentation of selected topics from the guidance note  Theory  General status on channel strategy approaches in the tax        administrations Channels - strengths and weaknesses Cost versus user value Cooperation across government bodies CRM Segmentation Types of analyses you can do Guiding principles Norwegian Tax Administration Some theory/framework for understanding of findings Types of strategies  Planned strategies  Strategy developed (often a Strategic levels  Corporate level  Business level  Functional level  Elements of channel strategy project), then guided and implemented through a detailed plan  Emergent strategies  Realise strategic intentions through actions  Emerge over time as a result of activities, projects, ways of working can be found at all levels, but most explicit at functional level Norwegian Tax Administration General status on the tax adm work with channel strategies  All tax adm have a “channel strategy”, but  may call it different things, or is found in different strategies  may be more or less explicit/visible  may be initiated from different parts of the organisation, stakeholders etc  Most tax adm have separate e-channel/-service strategies  Growing need for more integrated strategy, across all channels and services Norwegian Tax Administration Two “opposite” approaches to strategy  Extensive, holistic strategies  Examples: USA, UK  Take form in large projects or dedicated organisational units  Long time perspective: “the whole strategy will be implemented within 2010”  Emerging strategies  Examples: Ireland, Norway  Take form through actions different places in the organisation  Short time perspective: “this solution will be a reality within half a year”  Both approaches seem to lead to good channel strategies in their respective tax adm! Norwegian Tax Administration Example of holistic channel strategy project - USA Source: The 2006 Taxpayer Assistance Blueprint, April 2006 Norwegian Tax Administration Channels – strengths and weaknesses Channel Electronic Internet Email Telephone Telephone (agent) Telephone (automated) IVR SMS Post Letter Mass distribution Face-to-face Counter / walk-in Outreach activities Other Fax Interactive kiosks Interactive TV Description Strengths Weaknesses Norwegian Tax Administration (see table in draft guidance note) Norwegian Tax Administration Cost versus user value Norwegian Tax Administration Value to user  Reduced cost of transmitting information – phone, post, paperless interactions  Reduced associated costs (e.g professional advice, software tools, equipment, etc. predominantly for businesses  Reduced user time (hours saved)  Reduced need for multiple submission of data for different services and events  Reduced travel time  Differentiated filing deadlines and timing of refund Monetary Benefits Time-based nonmonetary benefits Value-based nonmonetary benefits  Quicker response  Reduced application processing time  Impoved response to events  Improved interactive communication  Improved information  More reliable and up-to-date  Faster and easier access  Transparency (e.g. Status of ”live” applications  Can be live or real time  Improved reliability  Reduced error rates  Greater confidence and certainty of transaction  Service consistency and overall reliability  Choice and Convenience  Range of access channels – increased choice and ease of access  Greater user convenience (24/7 service delivery)  Decrease in abandoned transactions and complaints  Premium Service  Extra tools and functionality for users  Improved customer service  Personalised service  Service integration Norwegian Tax Administration Cooperation across government bodies  All tax adms are in the forefront when e-solutions across government bodies are being developed  Often a slow process but rewarding in the end  Canada  Improving services through governmental cooperation. Government On-line: common government IT infrastructure with secure channel as centrepiece.  Norway – Altinn: portal for public reporting  19 public departments participating, 4 more in process.  More than 100 public forms and services available  Success factor for tax adm: involvement of ERPs  Sweden  Cooperate with other public bodies on physical locations, in particular in rural areas. Pilot: interactive kiosks with web camera connection to frontline staff or caseworker. Norwegian Tax Administration CRM – Customer Relationship Management  Most tax adms would like to have a CRM system but it is perceived as costly and complex Ireland  Built integrated contact system in-house, relatively low cost Australia  New CRM system implemented  Brings together information on a particular taxpayer across the organisation, allowing front line staff to provide more personalised, consistent and responsive service  Largest CRM roll-out in the southern hemisphere  Included training of 2500 staff in 24 client contact areas   Norwegian Tax Administration Integrated Contact system - Ireland Norwegian Tax Administration Integrated Contact system - Ireland  Instant viewing – no paper  Screen pop in call centres – voice recognition system, integration VoIP and main IT systems  Full contact history - contact registered: post, email, phone call, walk-in visit, self service including SMS  Accountability – who is working on what, trail for all documents  Management – post very easily distributed and redistributed to the right team Norwegian Tax Administration Segmentation  Many tax adm see the importance of segmentation as a tool, but find it challenging in practice  Some tax adm have recently developed segmentation models  Most common criteria used  Businesses: size, organisational structure, industry, use of third parties  Private taxpayers: Needs, attitudes, behaviour, life events, income, age/generation, educational level  UK  Segmentation enables differentiated approach. Will be used as a guideline for the user’s propensity to migrate and what channel they prefer.  USA  Analysis by customer segment provides critical insights into taxpayer filing behaviours and expectations for service (TAB).  Criteria: income and generation  Norway  Segmentation as part of work with cost-benefit analysis  Private taxpayers: age ( under/above age 60) and level of education Norwegian Tax Administration Segmentation - UK Needs summary Overall Channel objectives Size % pop Segment 1 12% I demand accuracy, my affairs are complex and need to be handled face to face. I rarely use the internet. Signpost from F2F and gradually push to phone and automated systems, respect the lack of understanding of the internet. Push towards automated phone channels for low complexity contacts. Segment 2 18% I am driven by speed and human interaction but am uncomfortable dealing online. Segment 3 37% I want an accurate record of dealings with IR and don’t care how long it takes. I am more likely to use post and phone than go online. Encourage phone usage, gradually introduce online services through gentle training programmes. Provide more information on online services, promote ease of use, time-savings and email capabilities. Segment 4 25% My main requirement is for speed although I value human interaction. I would move online if it would save me time. Segment 5 8% I am driven by the need for speed and convenience Increase and retain usage of online service through improvements and communications focused on speed and convenience, gradually decreasing outbound paper communications Source: Presentation by HMRC, UK Norwegian Tax Administration Variable Age Geography Testing of segmentation variables - Norway Conclusion There is a clear correlation between age and channel selection/preferences. The clearest distinction is between over and under age 60. There does not appear to be any significant regional differences – there are some differences, but not enough for use as a variable for the segmentation of the users. There is a certain correlation between the selection of a channel and the distance to the local tax assessment office – special tendency to visit the TAO in person. There is, however, little difference in the preferences. There is a certain correlation between the size of the municipality and channel selection/preferences. The larger the municipality, the more positive the user is to electronic channels. There is a certain correlation between the complexity of the tax return and channel selection/preferences. This correlation is, however, weaker than we had assumed prior to the survey. There is a clear correlation between the level of education and channel selection/preferences. There is a clear correlation between the level of income and channel selection/preferences. There is, however, a large group who do not wish to state the household’s level of income. The level of education is therefore a better variable since more respondents disclose this information, and there is a high correlation between the level of income and level of education. It is difficult to say anything about the correlation between the main occupation and channel selection/preferences. This is due to the fact that few respondents responded that they were employment seekers, homemakers or students. Distance to TAO Size of the municipality Complexity of the tax return Level of education Level of income Main occupation Norwegian Tax Administration Analyses and studies  All tax adms conduct qualitative and/or quantitative analysis or studies related to development and implementation of channel strategies  Broad range of analyses:  Cost analysis  Different types of user analysis  Channel specific analysis  Analyses of the effect of marketing initiatives  Challenges  Can be time consuming and costly, often use of consultants  Need a baseline in place for measuring change - often missing, and think of it slightly to late  Own existing data not always suitable for your analysis  Can be a challenge to find the good (possible to measure) indicators for measurement Norwegian Tax Administration Channel costs  All tax adm focus on serving their users in the most cost efficient channels  Some tax adm have conducted cost analysis – cost in each channel per contact is the most common approach  Very often a challenging task to find costs due to lack of data or not available in a suitable format  Very important to not only look at the cost isolated, but in a larger perspective! Example of channel costs for service categories - Norway C h a n n e l: S e r v ic e c a te g o r y: Face– to -fa c e T e le phone In te r net Paper E -m a il SM S C o m p lex in fo rm a tio n en q u iry (A v era ge C o st, N O K ) F ilin g o f ta x retu rn fo rm (A vera g e C o st, N O K ) 53 40 - 238 235 12 2 7 12 2 Norwegian Tax Administration V o lu m e 15,000,000 15 000 000 Cost analysis (ABC) - Norway 10,000,000 10 000 000 5,000,000 5 000 000 In p ers on/ cou n ter eleT elefon p h one In ter nett M ail E -m ail SM S 50,000,000 N O K - 50 000 000 100,000,000 N O K - 100 000 000 150,000,000 N O K - 150 000 000 A n n u a l ch a n n e l co sts fo r S c e n a rio 2 : 168 134 194 232 905 836 -64 771 642 NOK A n n u a l ch a n n e l co sts fo r b a s e lin e : D iffe re n c e in c o s t:  For each channel:  left column: existing costs and volumes  right column: changed costs and volumes if migration based on both users and tax adm needs and preferences Norwegian Tax Administration User surveys  Some of the most important analysis related to channel strategies  Many tax adm repeat user surveys (often every second year) to measure development – very useful  Increased use of qualitative studies, for instance focus groups  Increased use of detailed studies of content of contacts Norwegian Tax Administration Guiding principles - suggestions A clear understanding of what you want to achieve with the channel strategy 2. Move towards a holistic channel approach 3. Understand your users 4. Understand your cost structure 5. Proactively shift channel usage through take-up and migration strategies 6. Develop quick wins 7. Develop momentum for change within the organisation 8. Measure any change 9. Use segmentation to effectively meet the needs of the user and the tax adm 10. Define roles and responsibility of channels or customer groups 1.   What are the most relevant topics for guidance? How specific should the guiding principles be? Norwegian Tax Administration Q uestions & A nswers Norwegian Tax Administration Workshops  Suggested topics 1. Channels – strengths and weaknesses 2. Analyses you can do – must have, nice to have 3. Guiding principles – recommendations from the Sub-group Go to group – ca 10 minutes break One facilitator in each group Choose one reporter in each group to present highlights and conclusions afterwards   