Call Centres : The Right Perspective

So you think it makes great business sense to set up a call
centre in India to service clients around the world. GE, Amex, Deluxe, British Airways,
and others are already here. And "if they can do it, why can’t we?" you
reason. Moreover, the sheer economics of wage differential between India and the West
(setting up a call centre in India provides a saving of 70-80 percent on labour cost
itself) and the shrinking bandwidth costs makes the case very strong.

But wait! Most companies who set out
on this premise are in for a rude shock.

This single-point proposition of "lower
costs" does not hold much water when it comes to convincing global clients to
outsource. A survey of Fortune 1,000 companies on their outsourcing concerns showed that
cost-reduction is not the top most criterion for selecting an outsourcing partner. Hence,
it is important to understand the criteria for vendor selection and performance
parameters.

Performance Parameters

As we all know,
compensation is very closely linked to performance. However, the compensation models are
undergoing fundamental change–from a fixed compensation structure to a sliding scale
model where definite response metrics are outlined in a detailed Service Level Agreement
(SLA).

These performance parameters are
industry specific as well as application specific. However, these could be broadly
classified into two types: Operational & Strategic.

 

 

 

Operational Parameters

Operational Parameters

These parameters are those
which are directly related to the working of the call centre and as such are closely
monitored by the operational level managers on both the client side as well as the vendor
side. There are more than 300 parameters that are used by call centres worldwide. However,
for the sake of brevity we have grouped these into the following four types: process
related, customer related, employee related, and financial metrics.

Process related:

Parameters
like average speed of answer (less than 15 seconds), percent of abandoned calls (less than
2 percent), all trunks busy (less than 1 percent), first contact resolution (85 percent),
overall system availability are some of the most common process related operational
parameters that are monitored closely. These parameters basically describe the process
productivity of the call centre operations.

Customer related:

These
are mostly related to customer satisfaction surveys that are carried out periodically as
per the SLA. Follow-up surveys conducted by impartial entity (client or third
party–calibrated if conducted by vendor) within 48 hours. Other parameters include
number of complaints per 1,000 calls, etc.

Employee related:

Human resources are
lifeline of the call centre and hence given prime importance. Some of the parameters
include: employee attrition (less than 10 percent), absenteeism, employee satisfaction (90
percent satisfaction levels), days of training (10 days in a year), number of supervisors
per 100 CSRs (8-10 supervisors per 100 CSRs), number of shifts per day, number of hours
per shift, etc.

Financial metrics:

Show me the money! Most
clients expect a cost saving of 20-30 percent when they consider outsourcing. Some of the
key financial metrics are: cost per seat, cost per call, cost per agent hour, revenue per
customer, conversion rate (closed sale/call), sales per hour, profit per CSR, etc.

 

 

 

Strategic Parameters

Customer care is directly
linked to the reputation and future prospects of any service business and as such is a
strategic tool to support business processes. Also call centres are no longer viewed as
cost centres but are looked upon as profit centres. Clients now perceive outsourcing
vendors as strategic partners for the success of their businesses. Operational parameters
would eventually become the price of market and clients would look at certain strategic
parameters like return on investment, increase in total revenue, increase in profits, etc.
to award long-term contracts. Other key qualitative parameters that are bound to become
performance benchmarks are discussed below:

• Systems and processes for keeping
  information and data security and for creating "Chinese walls" to avoid
  information leakage to competitors. Clients do look at issues like physical facility,
  separate telephone lines, passwords on workstations and databases, etc.

• Investment in cutting-edge technologies
  like voice recognition software, neural networks, fuzzy logic, expert systems, call centre
  software, CRM solutions, etc.

• Ability to provide strategic customer
  analysis like trends, early warning signals, opportunity identification in up-selling and
  cross-selling, etc. Vendors would do well to develop/acquire/partner for consulting skills
  in the key application areas. Clients would perceive industry domain expertise as very
  valuable. Companies such as Convergys (largest call centre vendor in the US–formed
  after the merger of Matrixx and AT&T solutions) have customized solutions for industry
  sectors like telecom, foods and beverages, and financial services. And focussed call
  centre vendors like Sykes have developed expertise in vertical domains like hi-tech and
  IT.

• Strategy and policy for human resources
  in employee retention, career advancement, and training. This shows the vendors’
  long-term commitment to business and the ability to provide greater value-add in their
  services.

  Impact of the Internet

  Impact of the Internet

  Will growth of the Internet
  spell doom for the call centre?

  This is one question that is very
  frequently asked nowadays. After all, mass customization and personalization are the key
  features of today’s Web-fronts and this could eliminate most information-requests
  that today’s call centres handle. It is expected that the customer who calls in would
  have already hit the web site and would be more knowledgeable and perhaps more irate and
  hence needs to be handled differently. Also there is a risk of obsolescence of technology
  of the call centre and skills of CSRs.

  While all this is true, web sites will not replace
  the call centre. However, its functions will change significantly. Tomorrow’s call
  centre would play a more complementary role to the web site. Internet savvy companies like
  Cisco and Dell, who have complex products that can be configured and bought over the Net,
  have not closed down their call centres. In fact, there has been a burgeoning of the
  number of CSRs. These are not the CSRs as we know them but highly trained and qualified
  consultants who also act as marketing and sales agents. As more mundane and routine tasks
  are taken over by the web site, the CSRs would no longer remain mere
  information-transceivers but would need to transform to relationship managers and business
  consultants rolled into one. This would mean a different set of performance benchmarks
  that would evolve as companies learn more about consumer behavior in a multi-media
  environment and also use technology to solve the routine problems.

  Some Lessons

  Most call centre vendors
  will eventually realize that it is not easy to penetrate the customer care market in the
  developed countries. To win lucrative contracts, the vendors must keep in mind the
  following things:

  • Customer care outsourcing is increasingly
    being looked upon as a strategic decision

  • Continuous investments and innovation is
    needed to succeed in the long run

  • Operational performance benchmarks will
    eventually become the "price" of market entry

  • Partnerships with best in class will keep
    the cash registers ringing

  • Lastly, it is not about "costs"
    but more about "class".

  The Future

  For India to replicate the software success
  to customer care outsourcing, vendors need to have a complete strategy for people (both
  customers and employees), processes, and technology. As competition increases and industry
  specific requirements emerge, vendors need to link that strategy with capability to exceed
  an ever-increasing bar of performance metrics.