Operations

Global State of the Contact Center Industry

1 Jan, 2007

By: William Durr

My colleague Oscar Alban and I are constantly reminded that much like the famous Disney song and amusement park ride, it is a small world after all. We recently spent a month visiting nine countries in the Asia Pacific region in addition to recurring trips to Europe and within the Americas. And while there are important differences in contact center technology adoption and operational processes exhibited in some regions of the world, it is increasingly true that what affects contact centers and enterprises in Asia, also affects organizations in Europe and the Americas. Based on our conversations and interactions with a wide variety of contact center management teams, we’ve unscientifically identified some common concerns that promise to shape 2007 and beyond. In no particular order, they are as follows:

  • Efficiency versus effectiveness
  • Increasing focus on customer-centricity
  • Establishing the center’s value with senior management
  • Outsourcing
  • New focus on the supervisor.

Efficiency versus Effectiveness
The first order of business for any contact center is efficiency: Are we doing things right? Nobody doubts that good service delivery makes good business sense, but there’s plenty of debate about the level of service companies think they can afford. For example, quite a few centers in Asia still rely on spreadsheet-based forecasting and scheduling because they either think solutions cost more than they will save or they simply don’t believe solutions exist that can improve the current practice. In this belief, the Asian centers are very much like smaller centers in Europe and in the Americas. Increasingly, forecasting and scheduling software solutions are finding their way into more centers of all sizes. This is partly due to a quickening acceptance rate in Asia as early adaptors report successful implementations and the fact that even smaller centers need to control labor costs.

We met with an outsourcing company based in Japan. They have more than 600 agent seats across four sites. The firm handles voice, e-mail and Web support for a large number of Japanese companies. The firm was COPC certified (Customer Operations Performance Center) back in 2000, but only recently decided that forecasting and scheduling solutions might make sense.

After implementation, they realized a quick reduction in the number of people involved in producing a new schedule by 50 percent and saw opportunities for labor cost reductions of about 20 percent.

Smaller centers in Europe and the Americas are also more likely to investigate forecasting and scheduling solutions in 2007 driven by more complex operations and/or customer-driven extended hours of operations. Delivering a consistent customer experience is seen to be increasingly important and a necessary first step in the automation of the entire forecasting and scheduling and schedule-adherence process.

Once centers have tools to help secure efficiencies, attention begins to turn quickly toward effectiveness. The question that keeps contact centers managers awake at night globally is: Are we doing the right things?

 

What Companies Think and Customers Perceive
Oscar and I noticed a huge number of companies focusing attention on quality in the center. And they should, according to a recent Bain & Company study. In the study, Bain asked 362 companies if they felt they were delivering a “superior experience” to their customers. Fully 80 percent of the surveyed companies said they were, in fact, delivering a superior experience to their customers. Then, Bain & Company solicited feedback from the customers themselves. Only eight percent of the customers felt that they were, indeed, getting a “superior experience.”

The gap between what companies think they provide and what their customers actually perceive is wide enough to send center management scurrying for better quality monitoring technologies and improved QM processes. Many centers will be revisiting their quality assessment forms in 2007, as they try to re-imagine quality from the customer’s perspective.

During a meeting with a Chinese banking center director, the gentleman expressed frustration with the entire efficiency versus effectiveness conundrum. He understood explicitly the measures of efficiency like average handle time and adherence to schedule, but when it came to customer-based quality measures, he was lost. “How can I get inside my customers’ heads without the intrusion upsetting them?” he said. And isn’t that a universal question right now?

Until we develop reliable ESP, the answer to his question involves triangulation. Lacking objective data readily available for efficiency measures, contact centers must rely on more subjective measures. Agent quality assessments provide subjective measures of internally defined customer satisfiers. IVR post-call surveys (customer feedback management systems) are used to answer two critical questions: (1) Was the agent courteous? and (2), was your problem fully resolved? Callback, Web and/or mail surveys need to be conducted to discern whether customers are satisfied with their most recent contact center interaction and with the policies and procedures of the company itself.

The growing global interest in the customer will drive many centers to consider a more robust and far-reaching quality solution. It isn’t just about the agent anymore.

 

Increasing Focus on Customer Centricity
No matter where Oscar and I went, we always encountered an organization embarked on a project to become more customer centric. The idea here is that the era of product-based competitive differentiation is largely over. The Internet and the concept of “Internet time” means that for nearly all firms, product-based competitive differentiation is both costly and short-lived.

So, if there’s little opportunity for long-lasting differentiation based on the product, more and more companies conclude that there can be successful competitive differentiation based on customer service. After all, while products can be duplicated, really great customer service representatives and the processes that support them can’t be copied quite so easily.

You won’t find many ready definitions of customer centricity. It’s one of those terms that are seldom defined, but often discussed. An article in a recent Harvard Business Review Newsletter defined customer centricity this way:

  • It’s not just about handling customers’ calls efficiently. It means addressing all customer issues fully and resolving them completely
  • It’s not just something involving the frontline. It’s ensuring that the entire enterprise adopts an external focus
  • It involves more than having your employees treat customers right. It means giving employees the tools and authority to decide how to treat customers right
  • It’s not organizing your company to serve customers. It’s letting customers determine how you organize.

Being customer centric means that instead of the typical inside-out mindset, the company reinvents itself from an outside-in mindset.

To become more customer centric, contact centers are embracing a workforce-optimization strategy. An example is a wireless carrier in Sri Lanka. With two centers --- and a total of 300 seats --- the company employs about 750 agents and services 3 million customers. The organization realized that since it was the fourth entrant into the mobile phone market, it needed to excel at customer service if it was to succeed against its longer-entrenched competitors. The company selected a strategy that implemented workforce optimization in the pursuit of creating a truly customer-centric organization. The company’s head of customer service defines a customer-centric organization to be “…one which has organized its entire operating model around its customers, by understanding customer values, with a well-defined strategy and action plan for delivering exceptional customer care with a guarantee of best value and satisfaction during every interaction.”

To achieve this, the company has implemented workforce management, service quality management, scorecards, business intelligence and a formalized process review and process-change management initiative.

The process-optimization effort can be summarized as follows:

  • Frequently review workflows and current processes
  • Eliminate redundant processes
  • Centralize key processes
  • Promote collaboration to reduce duplication of efforts and force people to see their work in the context of a larger framework
  • Automate as many processes as possible
  • Always balance operational metrics with outcome metrics.

Further, the company balances its internal quality monitoring with a post-call IVR-based survey. The IVR asks the caller two simple questions. One, did the agent conduct himself or herself courteously and professionally? Two, was your problem or request handled completely and satisfactorily? In addition, it is implementing a SMS (short message service) queue so its customers can interact with agents using that technology --- a neat linkage with its product.

Beyond this, we see more companies eyeing other parts of the enterprise with the notion of applying some of the contact center’s tools and processes.

 

Establishing the Center’s Value with Senior Management
Everywhere we go, we hear the same lament: How can I get senior management to understand the contact center’s potential? Variations on this theme include:

  • How does the center become more strategic?
  • How does the contact center get a seat at the executive table?
  • How does the center move away from being a cost center?

One way is to market the center to senior management. Too often we see contact center managers place themselves into an inferior corporate position because of what they choose to report. Contact centers are largely still reporting tactical information to the executive suite. This includes data like the number of calls taken, average handle time, average time in queue and all the similar arcane metrics most contact centers wallow in.

But some contact center management personnel have broken the senior executive code. They either report what the executives truly need or portray themselves in ways more familiar to senior executives.

Some centers we visited have repurposed their quality assurance teams. While still doing some agent assessments, repurposed QA teams devote more time identifying customer and market trends, root-cause identification and enterprise process breakdowns. They convey these findings to marketing, finance, engineering, production, fulfillment and other areas that could benefit from the insights. Perhaps no finer contact center partner exists in the enterprise than marketing. In many companies, marketing is spending a lot of time, effort and money trying to learn what customers and prospects think about the company and its products. Often, marketing arranges “focus groups” in an effort to understand the customer. Ironically, contact centers are engaged in a continuous “focus group” of sorts every day. By transforming how they approach the quality monitoring process, contact centers elevate their ability to contribute to the goals and information needs of senior management.

One center we visited in Europe had an interesting approach to the problem of senior management recognition. They issue an annual report. The document has the look and feel of an annual report – glossy paper, charts, graphs and photos. The center’s annual report includes a mission statement, how they performed over the previous year and what the focus is moving forward. To add a level of personalization, it also features photos of some of the agents and supervisors, along with individual success stories.

The professionally bound book is then provided to all company executives. And they look forward to receiving the document because it helps them understand the strategic value the contact center provides to the company. One result of their approach is that the budget approval process is easier.

 

Outsourcing
The Asia/Pacific region is a hotbed of activity for outsourcer organizations. By some estimates, the outsourcer industry has experienced 80 to 100 percent growth a year for the last four years. The drivers behind this growth include a much lower wage structure coupled with a well-educated workforce that speaks English.

That said, there have been numerous reports in the trade press that illuminate some growing problems with offshore outsourcing of customer telephone calls. These negatives include problematic accents, cultural differences and the troubles outsourcer employees have coping with working all night because of the time zone differences between the U.S. and Asia. That last driver is one reason the cost of labor in offshore call centers is rising. The result is that while outsourcer telephone servicing is still growing, the rate of growth has fallen significantly.

Perhaps in anticipation, Asian outsourcers have shifted from handling real-time voice calls to handling enterprise back-office work. Because back-office work can be time-shifted and because accent issues don’t matter, Asian outsourcers find this work to be better suited to their workforces. And for an increasing number of American and European firms, moving back-office work to an outsourcer makes great operational and financial sense without incurring any negative press or company exposure to a sometimes fractious national debate about job retention.

What is becoming clearer, however, is that the relationship between outsourcer and company client is becoming tighter. Obviously, some of the impetus for moving calls to an outsourcer lies in their ability to process them for less cost than can the client company. But more client companies seek a stronger partnership with their outsourcer. Anyone can answer phone calls, but few can make an impact on the business. In 2007, more companies will begin to view their outsourcers as important business partners. And clever outsourcers will leverage this trend to secure better margins while moving away from pure price competition.

Smart outsourcers will continue to be successful if they keep the following points in mind:

  • Offer value-add benefits to clients like voice of the customer information
  • Position themselves as an extension of the client customer to the marketplace
  • Provide feedback on root causes that drive customers to make phone calls in the first place
  • Pursue ways to more fully integrate outsourcer employee schedules with the client company’s in-house center operations by sharing forecasting and scheduling data.

 

New Focus on the Supervisor
Oscar Alban offers this profile of the typical contact center supervisor: “Youngest member of the management team with the largest number of direct reports and the least amount of functional training.” Of course, he’s spot on. More often than not, supervisors are top-performing agents who have been elevated into a critical job without requisite training or development of important skills, such as coaching. As we traveled around the globe we found more and more centers confronting this issue.

You can pick up almost any trade publication and find an article discussing contact center turnover and retention. Increasingly, contact center management realizes that agents don’t leave companies, they leave bad managers. It’s pretty hard to deny that the manager who has the biggest impact upon an agent’s work experience is that agent’s supervisor.

Contact center attrition rates in the U.S. easily approach 30 percent a year with some organizations experiencing up to 100 percent annual defections. Agents are literally voting with their feet. We are left to conclude that the current job description and support infrastructure for supervisors is toxic to agent retention. As a result, many centers are re-examining the role of the supervisor. They’re not happy with what they are finding.

Benchmark Portal published some research last year into how supervisors typically spend their time. Much more than half of their time is spent on handling personnel issues, creating ad hoc reports, attending meetings and doing special projects. Coaching and one-on-one interactions with agents consumed only five percent of the supervisor workweek.

We found that some centers have embarked on a journey that will transform what supervisors do and the tools they use to accomplish the new mission.

All too often, supervisors have no tools other than a spreadsheet and a word processing program on their PCs. While it’s true that supervisors receive work product from functional specialists in the center such as agent quality assessments (from quality monitoring) and agent work schedules (from workforce management), the lack of available tools diminishes their ability to truly manage their teams.

We see that progressive contact centers are taking advantage of workforce optimization and the webification of software capabilities to re-imagine the supervisor role. Instead of being given raw ACD reports that have to be analyzed in order to draw out actionable information, supervisors are grateful for Web-based scorecards that provide insight into key performance indicators for each agent in their charge. The daily scorecard not only confers performance ownership upon the agent, but enables supervisors to easily and quickly determine which team member is most in need of coaching and in what skill area.

We also see that the re-imagined supervisor role performs more agent quality assessments. By listening to recorded calls and scoring interactions according to the quality definitions document, supervisors gain powerful direct insights into agent skill gaps. When a separate quality assurance team performs all quality monitoring assessments, supervisors are forced into relying upon a second-hand insight. In order to recapture insights into interaction nuances, the quality definitions document frequently grows in terms of the number of questions until it becomes unwieldy.

And finally, some front-line supervisors are benefiting from Web-enabled schedule adherence screens, previously the exclusive domain of the forecasting and scheduling team. This enables them to understand exactly what each agent is supposed to be doing, compared with what they are actually doing. Armed with this information, supervisors are able to assume a real leadership posture with their team, rather than the token leadership that results when the functional silos have exclusive control and use of the tools and information.

 

Conclusion
The global contact center industry has been astonishingly immune from many of the forces exerting profound changes upon enterprises. In a real sense, contact center management has not changed significantly since inception. While it’s true that centers have more access to better tools, the core processes and roles have scarcely evolved over the course of 25 years.

Paleontologists, in their studies of evolutionary processes, now believe that evolution in nature is not a slow, steady progression. Instead they see evolution in terms of what they call “punctuated equilibrium” where things tend to remain the same for protracted periods of time, followed by a sudden burst of sometimes profound change. The same phenomenon applies to organizations.

Dramatic forces of change like the Internet, voice over IP and global hyper-competition have reached the tipping point in contact centers. During 2007 and the remaining years of the first decade of the 21st Century will see unprecedented change sweep across contact center management.