the challenge of mixed customer service infrastructures


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the challenge of mixed customer service infrastructures

  1. 1. the challenge of mixed customer service infrastructures a teasel White Pa p e r In the last five years, customer servicing infrastructures have become increasingly complex. Since 2000, many businesses have developed a more sophisticated approach to contact centre provision and mixed infrastructures have become increasingly prevalent. By mixed infrastructure we mean a combination of in-house capability, supplemented with outsourcers for some call types or activities such as outbound telemarketing, and offshore centres for basic customer servicing. In this White Paper we explore the growth of mixed infrastructures and consider the implications in terms of performance management and the provision of integrated management information. Having discussed the MI challenges these developing models present, we provide an alternative perspective showing how integrated performance management information can be delivered cost-effectively. The growth of mixed infrastructures investments also stimulated more rapid development of operating processes and According to the 2004 DTI study The UK contact centre technology. Enhanced Contact Centre Industr y, some 790,000 capability soon found its way into indigenous people were employed in contact centres at UK centres. the end of 2003. This included 500,0 00 agent positions spread across 5,320 operational Growth accelerated through the second half centres. Growth rates have been exceptional, of the 1990s. Much of this continued to particularly since the mid-1990s with the reflect the perceived cost advantages of sector expanding some 250% since 1995. moving routine enquiries and customer servicing away from face to face or paper Against this background, the growth of mail channels. It was also enabled by mixed infrastructures involving a combination increasing sophistication in the underlying of in-house, outsourced and offshore technology including automatic call centres, each delivering specific components distributors, IVR systems and computer- of an overall customer proposition, is telephony integration. However, these relatively recent. technical improvements in call management According to the DTI study, until 1995 the systems only tell part of the story. Away majority of UK contact centres were from the contact centres themselves, other implemented by larger firms seeking cost technologies were revolutionising back office savings through rationalisation and processes and marketing operations. In the centralisation of customer servicing and back office, electronic order processing sales activity. It was also a period which saw changed the way in which suppliers and several US-owned outsourcers building providers worked together to provide a substantial centres in the UK. Given that the seamless customer service. In marketing , US contact centre industry was some years rapid improvements in customer profiling ahead of the UK from both an operational and analytic provided the basis for better and technical perspective, these inward targeting, particularly around outbound tele-marketing. © 2005 Teasel Performance Management Ltd. All rights reser ved 1
  2. 2. Towards the end of the 1990s, outsourcers Configurations and challenges were able to offer organisations highly The rapid growth of multi-channel distribution professional contact centre infrastructures, and customer servicing in the 1990s supported by advanced call management and presented many organisations with a customer contact systems. Fuelled in part by performance management headache. Some the additional cost advantages in areas such early thinking assumed that customers would as routine enquiry and customer servicing, naturally gravitate towards the immediacy outsourcers also found themselves well and directness of (cheaper to operate) placed to take on the customer service role telephone services. However, experience of large government agencies such as TV has since shown that when faced with more licencing and DVLA. choice, customers generally become Such was the rapid expansion of outsourced promiscuous users of multiple channels. provision that the market became saturated Nowhere is this clearer than in retail banking. in 2000 – 2001. This, combined with Understanding and managing performance in continued advances in customer data terms of customer outcomes across multiple management and communications channels is, in itself, difficult to achieve. infrastructure, set the scene for the growth Multi-channel businesses have seen of offshore solutions for some customer improvements in their ability to track management activities. Cost has been the performance on a channel by channel basis, primary driver so far, since countries such as but have struggled to develop reliable India offer highly qualified agents at a fraction measures of customer delivery where of UK costs. Whilst many early adopters of customer interactions cross channel offshore capability report success, it is boundaries. The growth of alternative currently unclear how these centres will contact centre configurations since 2000 perform in the longer term. Equally, customer now means that in many cases, businesses response has been mixed with some have difficulty in understanding performance anecdotal evidence of customers asking to holistically even in the telephone channel. be transferred back to a UK-based operator. A brief examination of three alternative Rapid growth and infrastructure mixed infrastructure configurations highlights diversification means that many organisations some of the management information and are now operating mixed contact centre performance challenges. The three infrastructures incorporating at the very least infrastructures are illustrated in Figure1 a mix of in-house and outsourced provision. Financial services is one of the leading sectors stimulating the growth of offshore Multi-site in-house operations solutions. Where this happens, three-way mixed infrastructures involving in-house, In this configuration, an organisation will be outsourced and offshore provision are operating at least two centres providing becoming more common. customer service and sales capability across the customer base. Regardless of whether Whilst these developing models are widely the centres operate independently from one believed to offer more effective customer another, on a geographic basis for example, service at lower cost, the consequent or operate on a virtual basis, a number of fragmentation means it is often difficult to performance management and MI compare performance on a level basis. challenges arise. © 2005 Teasel Performance Management Ltd. All rights reser ved 2
  3. 3. Multi site in-house centres Multi-operator networks Marketing Applications Customer Customer Claims In-House Outsourcer Service Service Contact Contact Contact Contact Contact Centre Centre Centre Centre Centre running outbound campaigns Contact Contact Centre Centre Marketing Contact Contact Centre Centre Outsourcer Offshore Operator Contact Contact Contact Centre Centre Centre The challenge of understanding Multi-operator networks create the greatest Where marketing campaign execution is performance across multiple customer complexity. Comparing performance and shared between in-house and outsourced service centres is deepened where more value for money on a like for like basis is capacity, reporting lines tend to be than one department ‘owns’ part of the difficult where multiple business models complex. Measuring outcome in terms of in-house infrastructure. and management teams are involved. business delivered vs source of the original call is also challenging. Figure 1 Benchmarking performance across different Multi-operator networks teams and individual agents can be In this configuration, an organisation will be problematic, not least because there may not delivering services to its customers via a be a clear articulation of what ‘good’ combination of in-house and external performance looks like. Part of the challenge centres. The most common variant is for in- here is to ensure that the definition of house facilities to be supplemented with UK- desired performance is balanced and based outsourcers although the most comprehensive. Too much emphasis on cost complex infrastructure also include some drivers can have negative effects not only on offshore capacity. customer satisfaction, but also on the value of customer outcomes. Effective The primary difficulty here is the ability to benchmarking can deliver a range of benefits. establish an objective view of performance Once in place, organisations are better across all centres, regardless of their equipped to understand not only where the provenance. From a customer perspective, best performers are located but also what it the service and overall experience should be is about these agents and teams that make seamless, but it is often difficult for them perform better than others. Armed with operational managers to know whether or this, management teams can reach better not this is the case. From an executive judgements about how to inculcate best management perspective, it would be performance more widely, and can also valuable to know whether the business assess whether any investment in staff benefits being delivered by any particular development would pay for itself in terms outsourcer are acceptable given the cost, of improved financial performance. and how they compare with the value and cost of in-house provision. A second issue, linked to benchmarking and especially acute in virtual contact centres, is Since seamless service is an important the difficulty of matching customer characteristic of multi-operator networks, satisfaction and/or business outcome to benchmarking performance across all teams specific centres. © 2005 Teasel Performance Management Ltd. All rights reser ved 3
  4. 4. and agents involved in customer service A further challenge in the absence of an delivery is an important requirement. integrated performance management system However, it is rarely possible for is the ability to compare the effectiveness of organisations to be able to evaluate the in-house vs outsourced outbound capability. performance of third party agents and This may mean that some organisations are compare it like-for-like with in-house staff paying more than they need to on other than through the thresholds set in a outsourced capability when an in-house service level agreement. Moreover, the level solution would deliver a better overall return. of flexibility to respond to changes in the delivered service depends on the nature and frequency of any performance reports. Teasel perspective Marketing applications When faced with these challenges, many software vendors and specialist IT Marketers frequently make use of specialist consultancies are tempted by the idea that a outsourcers for outbound telemarketing complex problem requires an equally campaigns. In some cases, this can involve complex solution. At the extreme, the use of more than one outsourcer, completely new enterprise data warehouses particularly where different operating have been built purely to feed MI reporting subsidiaries adopt local approaches. Equally, systems. The justification for this is often that outbound activity can be split between in- data from multiple operating systems and house and outsourced provision. platforms needs to be homogenised to a Regardless of where outbound activity very high degree of accuracy before it can be originates, it tends to result in an increased of real value in supporting the MI volume of inbound calls. A lack of integration requirements or performance management in management information and the absence framework in front-line operations. We of unified process control can lead to question whether this is really the case. In disconnects between the volume of inbound any event, the effort and investment required calls generated and the ability of in-house to build data warehouses that accept data operations to manage them effectively. In feeds from outsourced and offshore some cases the resulting capacity mismatch providers constrains future flexibility in can be severe, leading to significant call choice of third party providers to an backlogs building up; increased abandon unacceptable degree. rates and the failure of the marketing In our view, there are practical and pragmatic campaign to deliver to its potential. The solutions that are not only capable of negative impact on customer satisfaction and delivering 80% of the value derived from agent morale should also not be costly IT infrastructure investments in MI underestimated. capability but do so at a fraction of the cost Whilst most performance management and and with additional benefits in supporting MI tools do not allow for simulation as well holistic performance management. as reporting, this is a key requirement where Careful up-front analysis is required before outsourcer-based activity is designed to an MI and performance management stimulate inbound calls. Even where higher solution that delivers better output cost than normal inbound volumes are not effectively can be implemented. It also intended, the ability to model alternative requires a willingness to think differently volume scenarios can assist considerably about the nature of delivered performance in identifying the volume at which some and how a range of variables combine to additional capacity needs to be brought determine performance on any given day. on stream. © 2005 Teasel Performance Management Ltd. All rights reser ved 4
  5. 5. By thinking about the challenges the level of performance to which the systematically, solutions are possible that organisation aspires. Where mixed maintain the ability to change the shape of infrastructures are deployed, this analysis the overall infrastructure in future while should be conducted as though all enabling a more agile approach to da y-to-day contributory centres were part of a single changes in the business environment. A infrastructure. The second step is to develop more detailed discussion of some of these a thorough understanding of the capability of issues can be found in the Teasel White the current infrastructure. Again, this should Paper Holistic Performance Management. be developed independently of the specific components and include the capability We believe that part of the problem with available in outsourced and offshore many MI systems is that they start with environments as well as through in-house technology rather than the business issue. centres. Current capability should be defined One result of this is that business managers in terms of a range of variables such as call are confronted with highly sophisticated management technology, agent desktop and applications that are to some extent a hybrid skill mix. It should also be set in context of between a performance management current processes, since the way in which system and an investigative and analytical customer management processes are tool. Some investigation and analysis is designed may also present capability always required as part of an effective MI constraints. solution, particularly where additional effort is required to identify the root cause of a Once aspirational performance and current specific problem. But it is not the primary capability are defined the foundations are in purpose of operational management place to identify the specific data necessary information. Acquiring MI systems that are to drive an operational MI system. In most over-complex in their ability to analyse cases, far less data is required to run an activity to a highly granular level risks the effective operational MI system than might production of an unwieldy volume of first be thought. Moreover, because the data performance reports that provide items are tightly focused on the core drivers considerable detail about activity in the in- of performance, it is relatively straightfor ward house components of the mixed to extract them from outsourcer and offshore infrastructure described above, but which operator systems without the need for any provide no information about what is intrusive intervention into those systems. happening in outsourced or offshore centres. In summary, mixed contact centre What is needed is a more considered infrastructures present a range of approach to understanding the nature of performance management and MI performance in mixed infrastructures, and challenges. Companies continue to strive to the MI required to inform management offer their customers seamless service and decision-making. It also means bringing reliable delivery regardless of whether the greater clarity to the specific requirements of point of contact in inside or outside the operational managers, who are responsible company’s own customer service for recursive daily activity, and executive infrastructure. By considering all components managers who need to be equipped to make as part of an integrated customer contact strategic decisions about investment in solution, a practical and pragmatic different parts of the infrastructure. performance management and MI solution can be developed that gives both operational One way to do this is to undertake detailed and executive managers direct access to analysis designed to establish two key current and comparative information from all benchmarks against which performance can parts of the system, including outsourced be assessed. The first involves articulating and offshore capability. © 2005 Teasel Performance Management Ltd. All rights reser ved 5
  6. 6. About Teasel We are specialists in operational performance management. The focus of our work is on the management information framework required to support management decision-making at both operational and executive levels. Our goal is to help our clients save money on the cost of operational MI provision while getting more effective performance from existing customer delivery operations. Operational MI means the performance information required to support business activity in the following areas: • Revenue generation and sales • Customer management and service delivery • Core cost-base management Within this, we offer 4 services: • Consulting • MI solution design • Managed services • Benchmarking For more information or to discuss how Teasel could benefit your business, please contact: Tim Burfoot Managing Director t/01223 370184 m/07966 293352 Teasel Performance Management Limited Sheraton House Castle Park Cambridge CB3 0AX © 2005 Teasel Performance Management Ltd. All rights reser ved 6