Caselet
Collaborative Outsourcing and
Partnerships: The Changi Experience
By Germin Ong
April 2014
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ABOUT THE AUTHOR
Germin Ong is Senior Researcher in Public Finance and Law with the Institute of Public Administration and
Management (IPAM), Civil Service College, Singapore.
ABOUT THE INSTITUTE
Through research, curriculum design, programme development and delivery, the Institute of Public
Administration and Management (IPAM) builds public service capabilities in service management, HR
management, public finance and law, and foundational competencies.
ABSTRACT
Many organisations that have outsourced service delivery functions are facing the challenge of providing
excellent service outcomes to their customers. However, Changi Airport Group (CAG), as the manager and
operator of Changi Airport, has shown it is possible for organisations with complex vendor relationships to
work effectively and collaboratively with vendors to achieve service excellence.
This caselet draws out CAG's procurement philosophy and service partner management principles and
highlights four key success factors that public sector agencies could learn from.
KEYWORDS
Outsourcing; Service Delivery; Procurement; Partnership; Collaboration; Service Excellence; Service Culture;
Changi Airport Group
DISCLAIMER
This case study is intended for class discussion only and not to illustrate effective or ineffective management.
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Collaborative Outsourcing and Partnerships:
The Changi Experience
Singapore’s Changi Airport is one of the world’s best airports. Since its inception in 1981,
Changi Airport has grown to become the sixth busiest international airport today. Changi
Airport won its first “Best Airport in the World" title from Business Traveller (UK) in 1988,
and by 1997, it had been voted "Best Airport in the World" by the same magazine for ten
consecutive years. 1 Today, managed by the Changi Airport Group (CAG), the airport
received a total of 28 Best Airport awards in 2013, 2 as well as being named the Word's Best
Airport by air travellers for the second year in a row at Skytrax's World Airport Awards in
March 2014. 3
As the manager and operator of the Changi Airport, CAG has worked very hard to maintain
and continuously improve the service experience of travellers at the airport. Although CAG
was only corporatised as recently as 1 July 2009, it has in fact been operating the airport
since 1981 as part of the Civil Aviation Authority of Singapore (CAAS). For over 30 years,
CAAS and subsequently CAG have established the airport as one of the world's best airport.4
Achieving service excellence is no mean feat for CAG which sees more than 136,000
passengers arriving and departing every day. While visitors are served by 32,000 staff across
a range of aviation functions, only 4.4 per cent or 1,400 staff are directly employed by CAG.4
The remaining staff belong to the other players in the airport eco-system, such as
groundhandlers and government agencies, as well as service partners to whom CAG
outsources. To achieve the goal of providing quality service, CAG employs about 330 people
in its operations management team to oversee the 6,000 employees of its service partners
who support various functions at the airport.
CAG plays an active role in building and cultivating a customer-centric culture and mindset
within and beyond the organisation. By internalising the "Changi Service DNA", they expect
their service team to be able to deliver a Changi Experience that is personalised, stress-free
and positively surprising. Similarly, they also expect their service partners to express the
same service spirit in all their interactions with the customers of the airport at all touchpoints.4
1
Changi Airport Group (2014). Major milestones, http://www.changiairportgroup.com/cag/html/mediacentre/major_milestones.html, accessed on 28 March 2014.
2
Changi Airport Group. (2013). Annual report 2012/13,
http://www.changiairportgroup.com/export/sites/caas/assets/changi_connection/Changi_Airport_Group_Ann
ual_Report_20122013_Full_version.pdf, accessed on 26 March 2014.
3
Channelnewsasia. (2014). Changi Airport voted World's Best Airport for 2nd consecutive year,
http://www.channelnewsasia.com/news/singapore/changi-airport-voted/1050070.html , accessed on 28
March 2014.
4
Changi Airport Group. (2014). Corporate website, http://www.changiairportgroup.com/cag/html/thegroup/index.html, accessed on 26 March 2014.
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Today, many organisations that have outsourced service delivery functions are facing the
challenge of providing excellent service outcomes to their customers. Many of these
outsourced partners have been unable to perform to expectations, especially on the service
front. However, CAG, with its focus on delivering the Changi Experience, has shown that it is
possible for organisations to work and partner across complex vendor relationships to work
effectively and collaboratively with service partners to achieve service excellence.
1. SMART PROCUREMENT — CHOOSING THE RIGHT SERVICE PARTNER
Building a successful collaborative working relationship starts with selecting the right
partner. In this regard, CAG takes a strategic approach in selecting service providers.
Selection criteria are not based wholly on costs alone. Beyond cost concerns, it is important
to consider both the importance of the service and its impact on the customer experience.
Selected service partners must be able to deliver the service quality expected by CAG and
contribute to the Changi Experience.
For example, CAG uses the Price-Quality Method (PQM) to evaluate their procurement
options. This method looks at both the price and quality criteria which are assigned
weightages and translated into quantitative scores during evaluation. Services that are
considered homogenous will have a higher P weightage in the PQ ratio. Such services
include refuse disposal and pest control. On the other hand, services that have a more
significant impact on customer experience will be evaluated with a higher Q ratio, such as
customer service.
In addition, as the custodian of the Changi Experience, CAG adopts a three-pronged
approach in its contract management to ensure the vendors and service partners work
closely together with CAG for a one-Changi experience for passengers and visitors. 5
Contract management and KPI tracking
(a) Key performance indicators (KPIs) are all clearly stated in the contracts for effective
management and monitoring of performance.
(b) The monitoring of service outcomes are based on various feedback channels and
platforms that include:
Customers feedback through e-feedback system (SWIFT), complaints and
compliments, and surveys;
Ground observations by duty staff;
Systemic monitoring of KPIs by CAG staff, e.g., audit checks, vendors' monthly
reports on KPI performance.
5
Changi Airport Group. (2014). Changi Airport bestows top honours on airport community for service
excellence, http://www.changiairport.com/our-business/media#/pressreleases/changi-airport-bestows-tophonours-on-airport-community-for-service-excellence962964?utm_source=rss&utm_medium=rss&utm_campaign=Subscription&utm_content=pressrelease,
accessed on 26 March 2014.
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Collaborative Outsourcing and Partnerships | 5
(c) All issues are rectified and improved through the following:
Clearly stated KPIs in contracts to ensure timeliness of rectification works;
Weekly Customer Experience Meetings, chaired by the Executive Vice President of
Airport Management, focusing on service-related matters;
Monthly reports to track improvements.
2. STRENGTHENING PARTNERSHIPS AND ALIGNING SERVICE CULTURE
Selecting the right partners is only the first step. It is also important for CAG to build and
sustain the relationship with their service partners. A merely transactional relationship with
service partners may not be good enough to create a dynamic and positive customer
experience for passengers and visitors at the airport. As such, to operate in a more complex
environment, coupled with higher customer expectations, it is necessary for CAG to work
collaboratively with their service providers to achieve successful partnerships.
It is important to have a strong service culture which everyone working in Changi Airport is
part of shaping. This is achieved by making partners feel part of the CAG community. To
create a shared service vision, a common service tagline is shared by all the 6,000 staff of
their service partners - "many missions, one Changi". These staff wear the CAG badge on
their uniforms, so that everyone sees themselves as a representative and service
ambassador of Changi Airport.
To drive service excellence across the entire airport community, incentives are awarded to
individuals who have been nominated for exemplary service attitudes on a regular basis.
Pictures of winners are posted on the "Wall of Fame" in each terminal. Such rewards and
appreciation for service excellence is extended to staff of all airport partners to reinforce
the One Changi mind-set.
In addition, CAG also holds an Annual Airport Celebration to bring together all airport
partners to recognise them for their contribution to service excellence. These awards seek
to recognise partners that have made a significant contribution to service levels at the
airport and motivate them to continue investing in customer-centric initiatives, and
partnering CAG closely on service improvements.5
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Figure 1. Service partners of Changi Airport Group.
(Photo courtesy of Changi Airport Group)
3. TAKING OWNERSHIP AND ACCOUNTABILITY
One important underlying philosophy of CAG's approach to working with partners is the
acknowledgment that it is CAG who is accountable and responsible to customers. This is an
important principle and belief held by the CAG management team. As the guardian of the
Changi Experience, CAG can never outsource the responsibility of operating the airport.
Although the majority of work and processes within the airport are delivered by the staff of
their service partners, CAG sees itself as the ultimate owner for all the processes at the
airport - only the work is outsourced. As such, CAG takes a pro-active approach to work with
their service partners to improve service delivery and overcome problems. For example,
when service lapses occur, CAG works together with their service partners to resolve them.
They also make it a point to learn and improve service processes together with their
partners.
As the process owner, CAG is responsible for monitoring and managing service processes. To
gain comprehensive understanding and insights of all their work processes, CAG ensures
that all the key processes are blue-printed with the support of their service partners. This
enables them to retain the necessary expertise, knowledge and control over work processes
that are deemed important to achieve the customer experience they want passengers and
visitors to have at the airport.
In addition, CAG's operations management team also takes responsibility for analysing and
conducting performance reviews for key processes. Exercising ownership over all processes
and services has led CAG to invest US$3.8 million on a technology initiative called One
Changi. One Changi aims to help keep the quality of passenger service consistent and is a
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centralised platform that enables CAG to share information with its partners and tenants so
as to collaboratively provide good customer service. The system also helps them to oversee
the staff performance of over 200 airport partners as they contribute to value-add to the
Changi Experience. Such partners include ground handling officers, emergency services
officers and cleaners. 6
One important component of One Changi is the Customer, Tenants & Partners Relationship
Management (CTPRM) solution. This is a relationship management portal that processes,
manages and tracks interaction and cases between CAG and its customers, partners and
tenants. Partners and tenants can access dedicated portals to gain insights from customers'
feedback, as well as respond to feedback that require corrective actions.6 As the owner of
all airport processes, CAG deems it necessary to take the lead and invest in this
technological platform to drive service improvements. The platform will enable them to
share information and engage service partners to co-create and co-deliver the unique
Changi Experience to customers.
4. LEVERAGING DATA AND TECHNOLOGY AS AN ENABLER FOR SERVICE
EXCELLENCE
In the age of "Big Data", organisations must learn to leverage on data analytics and
technology to improve service performance. While most organisations tend to adopt a datadriven approach sparingly on specific function such as customer service or operations, CAG
has embedded the use of data and technology in its key operations and processes. For
example, the use of the One Changi platform transcends all key functions in service
management and operations, as well as performance management.
Recognising that good service is as good as what has been experienced by the customer, the
airport has also invested in other customer-facing solutions that help to transform the
customer experience. One such initiative is the Service Workforce Instant Feedback
Transformation (SWIFT) system, which is an integrated feedback management and business
intelligence system that represents the heart of the One Changi platform. It comprises both
the Instant Feedback System (IFS) and e-Inspection. Through the IFS, CAG is able to gather
real-time feedback from customer. This is deployed at over 660 locations across the airport.
Today Changi receives more than 1.5 million pieces of feedback every month, with close to
90 per cent of these positive.2
The e-Inspection component of SWIFT enables the staff of Changi and its service partners to
make timely responses to facility operations. It also enhances the productivity and service
6
Nurdianah Md Nur. (2013). Uncovering Changi Airport's secret to good service. CIO Asia, http://www.cioasia.com/resource/applications/uncovering-changi-airports-secret-to-good-service/, accessed on 26 March
2014.
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recovery of frontline staff across multiple functions. For example, the use of SWIFT supports
the dynamic deployment of cleaners. Instead of being stationed and responsible for the
cleanliness of a specific toilet all the time, the system allows a cleaner to clean a larger area
and attend to specific toilets based on users' feedback, resulting in resource optimisation.
The use of the e-Inspection system also allows supervisors to conduct checks on rectification
work done via handheld electronic devices, reducing the time and paperwork required.2
The use and investment in technology has been integral to CAG's efforts to drive service
excellence. Recognising that service partners may have limited resources or little incentive
to support service innovations, CAG takes a pro-active approach to design and provide
technological resources to their service partners to enhance service delivery outcomes. It is
also this spirit that allows CAG's partners to walk together and follow CAG's lead to achieve
service excellence for the airport.
APPLICATIONS FOR THE PUBLIC SECTOR
The use of outsourcing is a significant part of the public sector's strategy to deliver costeffective public services to citizens. As such, it is vital that public officers develop strong
capabilities and knowledge to embrace and leverage outsourcing effectively to improve
service delivery outcomes. It is therefore useful for public agencies to draw insights about
successful outsourcing practices from CAG's experience.
The four key success factors underlying CAG's success in outsourcing is a timely reminder to
the public agencies that the responsibility and accountability for public services cannot be
outsourced. It is essential that public agencies assume ownership and control over the
services that it has decided to procure from external service providers.
In addition, CAG demonstrated that it is important to deliver consistent and high service
standards across all the different customer touch points, regardless whether the service is
actually provided by the public agency directly or by an outsourced partner. To achieve this,
it is critical that everyone involved in the delivery of the services must share the same
common vision and mission.
Furthermore, with a relatively more complex operating environment, coupled with
increasing citizen expectations, the public sector must also recognise the limitations of a
transaction-based approach to build more collaborative relationships with their service
partners. The prospects of a stronger and mutually beneficial partnership between the
public and private sector can potentially improve service outcomes, which may ultimately
help to foster greater trust between citizens and the government.
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CONCLUSION
Working closely together with their service partners, CAG and Changi Airport have managed
to consistently score more than 70 points in the Customer Satisfaction Index of Singapore
(CSISG) index in the last five years, well above the national average.7 Its penchant for service
excellence achieved an all time high in 2013 when the airport broke the "national" record in
customer service in the latest CSISG with a record score of 85.5. 8 This remarkable and
consistent set of results could only have been achieved through close partnership and
collaboration between CAG and its 6,000 employees of its service partners, and how they
have worked together to create The Changi Experience.
7
Institute of Service Excellence, Singapore Management University. (2014). CSISG Scores & Rankings,
http://ises.smu.edu.sg/csisg-scores-rankings, accessed on 26 March 2014.
8
Changi Airport Group. (2013). Changi Connection, Issue 22.
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