At IP Centrum, we’ve never charged urgency fees. We were advised strongly against this when we founded the company, and there was sound wisdom behind the advice. But wisdom isn’t always logical.
IP Service providers are not IP Firms, and in our opinion shouldn’t try to be. IP Firms have a lot more to deal with than we do. The work they do often requires a skilled human being to use their experience, judgement and time to perform actions which result in the desired outcome for their clients.
IP Service providers are different. They have a comparatively narrow and more focused set of functional services, rather than tasks involving opinion and grey areas. This gives the opportunity to orchestrate operational scale.
Operational scaling is hard, however. It requires a tremendous amount of up-front investment and planning, before accepting a single instruction. It is much easier to simply try to follow the model of IP Firms and just provide an economy of scale through centralising instructions. But that doesn’t really add much to the supply chain. It’s essentially just outsourcing.
In the same way that the operating model of a Michelin-star restaurant really shouldn’t be emulated by the supplier who delivers the vegetables, the same is true of the IP service provider – no matter how high quality the vegetables are!.
Either you can deliver the service safely within the timescale or you can’t.
We think it’s our responsibility to be able to deliver pretty much any volume of vegetables the restaurant needs – within the bounds of minimum safe timescales – without fuss or adding charges. Either you can deliver the service safely within the timescale or you can’t.
What are urgency charges for then?
Maybe some service providers consider them a carrot or stick to encourage earlier instructions. But to what ends, and what is their motivation for receiving earlier instructions?
If it is a noble desire to reduce the risk of late instructions, that essentially means a willingness to accept instructions that you have a lower confidence of completing and charge more for that essentially worse service. If you have lower confidence of success, surely the cost should reduce, rather than increase. So it can’t logically be that.
Is it because the service provider actually has additional costs for late instructions? If so, why? The service provider knows they will receive urgent instructions from time to time – and therefore, at scale ALL the time. This is business as usual. Do they employ more staff suddenly when there is an urgent instruction? Is it to cover the electricity bill due to the office having to open later that day? There really shouldn’t be any additional operational costs. This is something that will happen, and must therefore be planned for. The costs are therefore locked in already as part of the costs of operating the business.
Of course if the instructions are so late that the PoAs need to be delivered by fighter jet, then of course there really are additional costs – and incidentally if there really are unusual additional costs outside of our control due to late instructions, then we will advise our client immediately for approval and charge these on at our cost without margin. But these are extremely rare, and almost always avoidable with a bit of care and effort.
So it starts to look as though the carrot and stick is just about reducing the need for the service provider to be ready for these things, and surcharging those who provide late instructions to pay for that. But this feels like a cop-out to us. In many ways it’s similar to those automated telephone answering systems – “Press 7 to go through to the next layer of menus”. These things are not there to help the customer. They’re to help the supplier at the cost of the customer.
There are countless legitimate reasons for late instructions. It’s part of our world.
We’re a professional industry; nobody sets out to place instructions as late as possible, and everyone already has motivation to get instructions placed and dealt with as early as they practically can. But there are countless legitimate reasons for late instructions. It’s part of our world.
We’re not an IP Firm, so we get the chance to focus intensely on how to perform the comparatively small number of services we provide to an extreme level of operational efficiency. This means doing it differently, not just providing outsourced staff to do it the same way.
We can either handle your instruction or we can’t, and we believe therefore it’s up to us to make this super efficient and to find ways to allow us to be able to handle your instructions. As an IP services specialist we shouldn’t carrot / stick clients through urgency fees (or even worse, stepped urgency fees) just to make our job easier.
Franco Oriti says
How do you handle instrucutions received on the last day or at the end of the month for renewals?
Simon de Banke says
Hi Franco,
Thanks for the question.
The short answer, is that we have sophisticated mechanisms in place in order to cope with very short timescale instructions.
TL;DR
The long(er) answer:
As part of our Gen3 solution (which is a combination of operational orchestration and technology augmentation), when any instruction is received, our systems automatically select the most appropriate route to completion within the deadline.
How do we do that?
Firstly, we know what the deadlines really are. This means, knowing to the second the latest moment that the formality can be affected. This isn’t a straight forward as it might seem! For example some territories have multiple offices – some of which deal with only certain types of formality, and others only accepting certain types of filing route (electronic / counter service, etc). We monitor office closing times during public holidays and to take into account early closures on certain days, for many reasons, etc.
We then have a sophisticated lead-time calculation system. This is highly complex, accounting for such factors as an IPO technology failure on deadline-day, leaving only counter-service available. This means calculating travel times (by car, public transport, and on foot – taking into account estiamted traffic patterns at different times of the day) for each of our foreign associates in real-time, so that an instant, electronic decision can be made to avoid precious seconds being wasted.
Our agent is then electronically instructed, and due to the time pressure all of their relevant staff receive an additional SMS alert, requiring acknowlegment of the instruction and acceptance of the deadline within 15 minutes (usually sooner).
All of the above happens within about two seconds of the client clicking the button.
Incidentally, under these short-deadline circumstances an additional “Acceptance” mode is enabled, to allow agents to either “Accept” or “Accept With Uncertainty”. If an agent “Accepts”, this means they are absolutely sure it can get done. If the “Accept With Uncertainty” this raises internal alarms at IP Centrum’s Global IP Formalities Control Centre, for immediate action, and simultaneously attempts instruction with alternative agents – we take the risk, that at a worst case we’ll pay two agents to perform the same renewal (although in some cases even this isn’t possible).
The list continues, and the above is just a small part of the overall solution, but key is that we know and accept that these circumstances will occur (a number of times every week), so we’ve worked pretty hard to make it as seemless as possible.
Of course, there are times when it is simply too late for human beings to get it done. If there are literally 15 seconds to go before the deadline, there really isn’t a practical way for this to be handled manually.
For this reason, we are mid-way through the development of IPC RoboFiler, which forms part of our Gen3 suite of technology. This module acts exactly the same as a foreign associate, interacting with our system as though it were a human being, but is able to electronically file, and perform checks, collect filing evidence / receipts, and submit them for our internal checking (a combination of AI and a sophisticated human checking process).
Theoretically, this means even when there are a handful of seconds (in some cases sub-one-second) to go until the final deadline, it can still be done.
None of the above is easy, but if it was easy it would be boring!
More info on how we built all this here if you’re interested.