Contact Centers: Maximizing Performance

All customer service-oriented industries face the challenge of improving service while also optimizing costs. For most companies, contact centers are not only the largest line item in the customer service budget but are also, as the primary point of contact with customers, among the most important. When making changes to contact centers, you must strike the right balance between increasing revenues and improving customer service on one hand and reducing costs on the other.

Some companies consider this a dilemma—either you improve customer service or you cut costs. We do not believe this is an either-or decision. Rather, service levels should be set based on customer or call value, and costs should be optimized within that constraint. Companies that take a holistic view of their contact center operations can maximize performance while also optimizing service.

Performance Matters

Improving contact-center performance requires developing an appropriate operating model and the organizational structure to support it. Understanding the economics of the main contact types is fundamental to cutting costs, improving service and increasing revenues. A contact center cost transformation typically involves optimizing internal and external operations, and managing demand.

Optimizing Internal Operations

The following are three primary strategies to optimizing internal operations.

Improve workforce productivity. Labor is the biggest expense in a contact center operation. Accurate performance measurement, including quantitative and qualitative measures to gauge quality, productivity and service, is vital to improving productivity. Management should be aggressive in setting targets and establishing standard processes and procedures, including online call-handling tools and training programs. All non-value added activities, such as customer look-up, should be eliminated.

Consolidate call centers. Site consolidation is not solely about real estate. It can also provide size and location advantages, a consistent organizational structure, and streamlined processes, procedures and tools. Consolidation is a means for improving workforce efficiency and productivity and reducing complexity.

Simplify back-office operations. Back-office operations are a reflection of front-line operations. Simplifying, streamlining and eliminating unnecessary procedures and policies at the front office will have a similar effect on the back office.

Improving External Capabilities

Leading companies make strategic use of the mature supply-market capabilities that have developed in several markets across the world. There are two aspects:

Make-versus-buy decisions. A make-buy analysis paves the way for better partnerships and services by quantifying contact types and call queues based on their business importance and location. You should not outsource your most valuable customers, but outsourcing low-value and less complex tasks can reduce operating costs.

Global service model. A global service model matches organizational needs to the location offering the best combination of skills and cost. Some organizations augment this by developing a global service delivery model to benefit from service duality, risk diversification or “follow-the-sun” 24/7 service delivery models.

Managing Demand

Companies use demand management strategies to increase customer participation in the end-to-end processes and to help reduce the number of callers to their contact center operations.

Reduce volume of calls. Reducing the volume of calls into a contact center requires first knowing the reasons why customers make contact in the first place. This is accomplished through a call-contact analysis, which can lead to improved processes and policy changes. For example, resolving issues during the first call into the center is a primary measure of performance.

Change channels. As technology becomes more sophisticated, companies can deploy new methods and channels with vastly different unit costs and service levels. The goal is to move customer contacts away from the high-cost channels to cheaper channels while continuing to provide high-quality and consistent service.

Case Study: Communications Provider

A.T. Kearney performed a contact center cost transformation for a leading North American communications firm.

Situation. The company wanted to improve service, processes and cost performance throughout its contact center operations, which included more than 10,000 full-time union employees in 30 centers. The focus was on support and back-office functions, select outsourcing agreements and almost $1 billion in addressable spending across its major units, including mass-market, enterprise, wireless, Internet and television.

Approach. We worked with the contact center executive team and senior management to baseline costs, outline opportunities, design a detailed transformation program and governance structure, and mobilize management. The four-part initiative included: consolidating contact centers; optimizing staff (including front-line agents) and back-office support functions, including training, quality assurance, workforce management and hiring; sourcing existing vendor contracts in multiple countries; and developing outsourcing and offshoring strategies.

Results. The team identified more than $200 million in savings—the result of consolidating centers by almost half, reducing almost 25 percent of full-time support and back-office staff, obtaining more than 20 percent savings on the existing outsourced workload, and outsourcing and offshoring almost 60 percent of the company’s low-value, less-complex calls.

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