Tax Relief

This time of year, when you think of taxes, you think of H&R Block. That's successful branding. However, for the Kansas City, Mo.-based company, it's not enough. For the past two years, it's been working diligently to migrate from a tax preparation business to a fully integrated financial services company.

By doing so, it could spread its revenue stream over more quarters and move away from its seasonal paradigm. However, its success in this endeavor would depend upon leveraging relationships with seasonal tax customers. To do that, the company needed an efficient way to pass information to its new team of financial advisors. In addition, as it added more online services, it needed to keep track of relationships across multiple channels.

The answer was found in a customer relationship management suite from Nortel Networks. Though the project started as an upgrade to its call centers, the completed solution will ultimately drive the success and future of the company.

"As H&R Block evolves from a tax-based specialty business to a complete provider of financial services, we need to increase customer loyalty across multiple financial products," says Mark Ernst, H&R Block's chief operating officer. "By capturing customer interactions through our financial centers and tax offices, over the phone, the Web and e-mail, we will gain a single view of our customers' financial needs."

Searching for a Solution

Founded in 1955, H&R Block has grown into a diversified company with subsidiaries providing a wide array of financial products and services. Between its tax preparation services, mortgage operations and consulting firm, the company's net earnings for last fiscal year totaled almost $252 million. During the 2000 tax season, the company served 19.2 million taxpayers through its 10,000 offices and another 1.8 million tax clients through its Kiplinger TaxCut software program and online tax preparation services. The company began its foray into financial services by creating H&R Block Financial Advisors in 1999, and by the end of the year, had finalized its acquisition of Detroit-based Olde Financial Corp.

Earlier that same year, the company made the decision to consolidate multiple call centers into a single integrated customer contact center. To accomplish this, it needed to address some technology problems. Each of its three existing centers used different platforms. One group was using an AS400, another had a modified Access database and the third used a product called Support Magic.

Looking at the platforms from a Y2K compliance perspective, the only one that was upgradable was Support Magic. However, that vendor had been purchased by a competitor, making the product extinct. There was also the issue of scalability. "The current platform didn't offer us the opportunity to meet any of our future applications," says Bryan DiGiorgio, vice president of H&R Block's service center. "It put us into the position where we had to go to an RFP."

After evaluating several vendors' offerings, DiGiorgio purchased Nortel Networks' Clarify eFrontOffice, including ClearSales, ClearSupport, ClearCallCenter, Script Manager, Clear Helpdesk and Clear Quality. The company also uses a Nortel PBX switch and its Symposium call center server.

Beginning with the 2000 tax season, the software would be used by more than 750 mostly seasonal service reps who handle inquiries from consumers, H&R Block tax offices and the company's financial services and e-commerce groups. The service center provides technical support for tax preparers in the field, support for the company's TaxCut software product and Web-based tax services and general customer service for its tax operations.

According to Peggy Menconi, vice president of research quality at AMR Research, the software choice was a good one. "Their product fully understands the financial services market," she says. "That's different than some of the call center software that assumes you have a product. Their software understands that a product could be just a different way of handling something or an intangible."

Five months later, the company purchased Clear Sales to support 1,300 financial advisors working for H&R Block's Financial Advisors subsidiary, as well as another 500 users classified under the company's tax preparer/financial advisor program.
Adding this sales piece would not only allow a consistent face to the customer regardless of the channel used, but would also provide the infrastructure necessary to grow the business, says Jonathan Farmer, group manager, product marketing at Nortel. "This is where we really align with their business strategy," he says. "They want to sell more, different and more complicated product sets. Now, they can look at cross-sell opportunities and capture information across all these different business units. They have a tremendous amount of ability to see what their customer is making and where their money is."

However, choosing Clear Sales wasn't a slam dunk decision for the company. "It didn't just happen by default," says John Thompson, director of technology for H&R Block Financial Advisors. "The fact that our service center had gone with Clarify definitely weighed heavily on my mind when we made the choice, but we did a pretty substantive analysis of competitors."

In doing so, Thompson found functionality in competitive products that he would have liked to have seen in Nortel's solution. "The Clarify sales product is not as advanced as their support product, although it's getting better all the time," he says. "We started with version 6, and we're now on version 8. They've made quantum leaps forward in each release. As they've had success in financial services, we begin to see more tailored things in their product that fit within our particular implementation."

Even so, the biggest factor in the decision was in not introducing a second CRM vendor. "We were able to leverage a lot of the hardware infrastructure and share those costs across the organization, so adopting a single vendor really helped in that respect," says Thompson.

According to Menconi, that balancing act isn't uncommon. "I think the way to look at it is the entire front office suite and the strength of that. Different companies are going to have strengths in different areas," she says. "Clearly, to them the call center was first, and they picked among the best there is. Then, you stick with that vendor for the rest."

Contact Center Success

At the contact center, the implementation timetable was brisk. "From the time we made the decision to going live we had 90 days to make it happen, and we could not miss," says DiGiorgio. Not only was he installing new technology, but he was also moving the three call centers into one physical location. Everything had to be in place by November 1.

In addition, he was in the middle of the seasonal recruiting process. "I had training the last week of October for all the new hires, because it takes us time to ramp up to hiring the 750 seasonal associates. We cut over from one system to another over the weekend, moved into a new building and we were up."

Early on, DiGiorgio made the decision to roll out only the Clear Support product in those 90 days. "We kept our scope fairly stringent to make sure we were able to go live," he says. "As we came out of season, we got a lot of end user feedback and went through implementation of the other modules, as well as made a variety of enhancements. I think the management of our scope was probably paramount to the project's success."

H&R Block's IT staff received training from Nortel. Third-party providers were used for training the reps, as well as the actual implementation. However, DiGiorgio says Nortel took ownership of the project. "If there was a unique item that went beyond what the integrator had seen, their team was involved," he says. "This has been one of the best implementations that I've been through. And to be able to talk to a 90-day time frame and be able to hit that mark was just a huge feat. I'm proud of the decision I made, and I think it was the right one."

Today, during peak periods, H&R Block's contact center manages almost 20,000 customer inquiries each day, including more than 7,000 e-mails. In the 2000 tax season, H&R Block used Clarify to manage nearly a quarter million e-mail interactions from January through April, up from 65,000 e-mail transactions during the same period in the previous year.

To handle that e-mail volume, Clarify eFrontOffice automatically creates a case and places it into the contact center queue for resolution. By identifying all the e-mails addressing the same issues, the company is able to send out mass responses, handling much greater quantities of e-mails in a much shorter time. An agent tends individually to remaining e-mail inquiries. "For my staff it's been great," says DiGiorgio. "These are truly the tools that make my team's job a lot easier. It really was taking what they were doing and going from a Yugo to a Lexus."

Financial Services Ramps Up

While the contact center project was a significant evolution, for the financial services team, it was more of a revolution. In the first phase of the rollout, which began in February of 2000, Clarify was deployed in 94 offices, reaching about 700 advisors--approximately half of the 1,300 financial advisors that came to be a part of H&R Block through its acquisition. Subsequent phases would complete the implementation enterprise-wide by the 2001 tax season.

Implementation objectives were two-fold. First, the company needed an effective means for acquiring information from its tax operations group and forwarding that to the most appropriate financial advisor based on geography and advisor experience. That was a particular challenge. "All of the cross-selling opportunities effectively happen in the span of 16 weeks, and we generate a volume of leads that really could not be managed by many sales forces in the world," says Thompson.

The second objective was to provide fundamental CRM-style customer management capability to its financial advisors. Prior to the implementation, some financial advisors had used their own contact management software, but the majority used paper-based systems.

Because the implementation came at the heels of the Olde acquisition, Thompson wasn't able to spend much time with those financial advisors to see how they worked. To compensate, he had to make sure the processes defined by the software were relatively generic. "A big part of the exercise of implementation has been about streamlining the user interface, removing those functions which were not core to our business model," says Thompson.

"Our intent was to go live with the product 30 days after the close of an acquisition," says Thompson. "That's very difficult, as you can imagine, to understand the culture of the company, to really acquaint the advisors at Olde with a new business model with H&R Block financial advisors and new processes. There was a lot to overcome."

Another difficulty encountered during implementation was the overall speed of the application at initial deployment. "It left a little to be desired," says Thompson. However, he says Nortel's professional services organization and technical groups were responsive to the problem, helping to solve it before the system went live.

Training was tackled in a variety of ways, including a half day of hands-on instruction prior to implementation. "We wished we would have spent probably at least two days on it, because it clearly was not enough," says Thompson. That was followed up with Web-based training. "We were focusing on making sure we had some very effective users in each office that could serve as mentors."

Getting advisors to use the system has been a continuing challenge. "I don't think it's at 100 percent, but a definite majority of the advisors are using it, and our training department and field management group is hard at work every day to push that as high as we can possibly get it."

According to Thompson, a big part of gaining user acceptance is making sure the product gives value to the users. "You have to balance that against the need of the company to have as much detail as possible about that sales process," he says. "Finding that right mix is key for us, because sometimes they compete with each other."

To add value to advisors, Thompson has automated many of the routine tasks they do on a daily basis. Advisors can track client follow-up, and they're able to rank, sort and identify customers for campaigns, targeting specific products or services. "A big part of what we're trying to do with Clear Sales is to make their day as efficient as possible and get them to focus on the right clients and the right incoming opportunities," says Thompson.

In the tax offices, the company's tax preparation software identifies key areas of potential customer needs, such as retirement or education planning. During the tax interview, preparers present clients with the option of speaking with a financial advisor. With the client's consent, opportunities are prioritized and routed to the most geographically appropriate financial center, where they're distributed based on the availability of financial advisors and their skills relative to the client's needs.

Currently, tax offices are networked via a dial-up and transmit information on an hourly basis to headquarters. Leads are distributed nightly to financial services offices, which are connected over private networks. However, Thompson says the company expects to migrate to the Web-based version of Clear Sales when it's available. At that point, the company will reassess whether to use the Web for information transmission.

Following the 2000 tax season, the system was tied to two systems, including the company's Cofinity financial planning products and its back-office transactional processing systems. The principal effect for the advisor is there's no need to maintain that information in more than one location. Changes to customer information are synchronized across those systems. Interactions that happen directly through the financial planning tool or directly through the back office, such as a trade, also get reflected in Clarify.

"We just will be integrating their back office system," says Thompson. "It's the first time they'll be able to see their existing customers, meaning their non-tax-
services-originating customers, inside the product, so improving their efficiency against their existing book is just beginning to happen on a broad scale."

Positive ROI

Though no formal return-on-investment analysis was done, both groups believe the projects were necessary and will pay off in time.

"My piece was right around $1.5 million in its entirety, and that accomplished a heck of a lot," says DiGiorgio. "It's a challenge having such a seasonal business," he says. "The products we buy need to return a positive ROI within a very short window of time. It makes for a difficult justification, but we had to migrate to something. We couldn't stick with the same platform."

"We were clearly looking at return on investment coming from the organization's commitment to cross-selling as a key component of our business," says Thompson. "Opportunity distribution and management was something that would have to be in place to facilitate the process, so to a certain extent, implementation of this kind of technology wasn't a choice for us."

In that area, Thompson says they have achieved some payback. "About 35 percent of clients that we were able to refer or that indicated an interest in meeting with an advisor opened one or more accounts with us, which is pretty significant," he says.

Return on investment with respect to increased advisor productivity has yet to be realized, however, Thompson believes that will happen over the course of this year. "The focus on the relationship has always been a big part of H&R Block," he says. "Enabling that systematically and building efficiencies on top of that relationship is a big change for the company. But we think it's one that's going to pay off handsomely in terms of customer satisfaction, employee productivity and ultimately, profits."