New RMG Structure To Improve Customer Service
23 July 2001
New RMG Structure To Improve Customer Service And Boost Profitability
Leading listed receivables management group, RMG Limited, is set to substantially increase its profitability with a major operational restructure which will produce annual cost savings of at least A$6.0 million. These savings are in addition to cost reductions already achieved by RMG of A$4.0 million. As a result, RMG’s ongoing cost of business has been reduced by A$10.0 million per annum.
Deputy chairman and CEO, Mr James Boult, today announced the restructure as part of a new operating plan, known as ‘Project One’, which has been developed to ensure RMG Limited becomes the pre-eminent operator in the Receivables Management business.
“The new structure will produce substantial upside benefits for our customers, our staff, and particularly, our shareholders and is a first step towards making the company the most profitable in the sector,” Mr Boult said.
RMG’s country Victorian offices will be integrated into a regional Call and Collection Centre in Melbourne. This centre will also adopt the operational capabilities of RMG’s offices in Queensland, South Australia and Western Australia and will be restructured as sales and marketing centres
Concurrently the Sales, Marketing and Customer Relationship roles of the RMG offices in Brisbane, Adelaide, Perth and Melbourne will be strengthened.
RMG’s Call and Collection Centre in NSW and its New Zealand and Malaysian businesses will not be affected by the changes.
“The restructuring of our Sales, Marketing and Customer Relationship functions will enable the company to reap significant benefits from the economies of scale presented by the bringing together of 22 companies across Australia and New Zealand into one entity,” Mr Boult said, “and enable a great focus to be placed on upgrading the skill levels and training of all staff in the customer contact and service area.
“From the RMG customers’ perspective, this will mean more efficient service of their business with substantially improved customer service levels by the appointment of client liaison managers in the restructured centres.
“Today, we are also announcing the acquisition of the former Vectus customer service centre in King Street, Melbourne which will enable the rationalisation benefits to begin immediately.
“Having immediate access to this state-of-the-art 223-seat call centre will enable us to advance the integration of regional operational functions into this one location in the shortest possible period of time. There will be significant cost savings in being able to get this centre operating almost immediately.”
“The restructure will enable overall staff numbers in Australia to be reduced by 160 , with an initial annual saving of A$6.0 million from staff and premises. This is a very large cost saving, and together with the improved standards of customer service being introduced concurrently, will produce a substantial bottom line impact,” Mr Boult said.
RMG will absorb a restructuring provision in its 30th June 2001 accounts. The company is also critically examining the balance sheet values of all assets and any necessary adjustments will be reflected in the annual announcement the company expects to make by late August. As a consequence the company will report a loss for the 6 month trading period ended 30 June 2001.
“The arrangements we are now putting into place will enable RMG to run in the most effective and efficient way possible and seize upon the future opportunities for an emerging debt recovery/management industry, both in the Australasian industry and internationally.
“The reduction of staff numbers is very much regretted,” he said, “but it is the next logical step after successfully bringing together so many companies and is in the best interests of the business overall. We are confident the remaining staff, shareholders and customers will understand that making these moves will ensure the business is operating as efficiently and competitively as possible and has a very positive long term viable future.
“There will be some opportunity for a limited number of these people to be offered positions in Melbourne, but where this is not possible, terms of separation and redundancy will be fair and equitable,” Mr Boult added, “and of course the company will be offering outplacement counselling to all staff affected”.
“RMG is now in a strong position to take advantage of its excellent revenue base through the lower cost structure achieved through these changes. The company is now poised to expand its revenue through the revised sales and marketing structure and expand its business in areas such as Acquired Distressed Debt,” Mr Boult said.