Achieving ROI

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Where is the return on investment from call center technologies when the entire operation is frequently accounted for as a cost of goods sold on a company's income statement? According to Gary Harmon, call center ROI can be found in many places. And as director of call center operation for Silicon Graphics Inc.'s (SGI) North American service organization, he should know. The Mountain View, Calif.--based vendor of computer solutions, servers, workstations, operating system (OS) software, and storage products embarked on a reengineering of its call center operation, and is realizing ongoing and significant cost reductions and other operational efficiencies in the company's four call centers across the United States and Canada. This is driving a positive ROI and gross profitability, since gross profit is defined as revenue minus cost of goods sold. Harmon credits this success in part to SGI's investment in a bundled software package, including Blue Pumpkin's Director-Enterprise, a workforce management software for call centers, and Aspect switch, an automatic call distribution (ACD) technology that routes calls entering a call center. "The feed from Aspect into Blue Pumpkin gives us the time-of-day call pressure we are under," Harmon says. "Prior to this it was gut feel. Now we know where our call volume is and what technical abilities are needed. [For example], during the hours of eleven to one Eastern Standard Time we need thirty percent of our OS people on staff, but only four percent of the graphics staff." Essentially, the applications give managers visibility into a range of call center activity--concentration of calls by time of day, agent idle time, duration of calls, calls by skill set needed--and out of that operational data, provides them much better decision-making ability around staffing. If viewed as a close cousin to business analytic applications like offerings from Cognos and Brio, it is clear how important call center activity data is to this class of software. The good news, as Harmon learned, is that ACD infrastructure is already effective at collecting gigabytes of important operational data that can be fed into a database, which the workforce management application extracts and interprets for decision makers. Unlike pure business analytics applications, which can require the construction of complex data warehouses, Blue Pumpkin's technology can read the native data formats of several switch manufacturers, theoretically cutting down on integration and deployment costs. "In the call center world, one thing that we are fortunate with is that with ACD we have just gallons of data," says Joe Mathews, director of the ROI Programs Group at Blue Pumpkin. Blue Pumpkin is one of about a dozen vendors in an arena that attempts to solve a classic supply-and-demand problem: how to supply the optimal amount of labor (call center agents) to the volume of calls coming in (demand), according to Lisa Hager-Duncan, an analyst at research firm GartnerGroup. The simple answer is to either throw lots of money at center resources to ensure someone is ready to answer immediately or to keep costs low, because the company decides it is not interested in customer satisfaction, she says. In the real world call centers search endlessly for equilibrium between the two extremes. In the case of SGI, the company uses Director-Enterprise to make informed labor-allocation decisions in that constant balancing act between keeping the cost structure as low as possible while keeping customers happy. One metric driving ROI has been nearly a 37 percent productivity improvement among SGI's staff, Harmon says. Almost simultaneous with the initial software investment, SGI ended outsourcing relationships and brought the entire call center operation in-house. This meant an immediate increase of call volume from 2,000 to 3,000 calls a week, into call centers in Montreal, Atlanta, Egan, Minn., and Mountain View, Calif., he says. SGI used a forecasting algorithm in Blue Pumpkin's application to determine the optimal number of agents. Based on SGI's predefined service goals--the customer speaks to an agent within 30 seconds of calling in and to a support engineer within five minutes--the company would need to increase staffing by only 8 percent to maintain existing service levels with the 50 percent increase in calls. "Nine times out of ten, when we complete the performance management studies for our ROI analyses, we find contact centers are overstaffed," Blue Pumpkin's Mathews says. Since that early revelation, SGI has been able to cut staffing about 15 percent through better labor management, Harmon says, which has translated into a $1.5 million in labor cost savings. This is an even more powerful ROI performance indicator than the productivity increase, since this relates to cost reductions and not just cost avoidance. Also driving cost efficiencies has been SGI's ability to better align its reps' skill sets against the nature of calls coming in. Data analyzed by Blue Pumpkin revealed that tech support help for certain kinds of technology, whether it be operating systems or storage, actually occurs at certain points in the day. SGI can schedule certain engineers with specific expertise at specific times, therefore avoiding staff redundancies. Better engineer-customer alignment also has boosted customer satisfaction by 47 percent. Mutual funds routinely claim that past performance is not a predictor of future results; in the call center world just the opposite is true: past is prologue. "Blue Pumpkin is a start," says Harmon about predicting skills deployment. "It gives us a ninety percent degree of accuracy as to where we think we should have folks." If a call center manager disagrees with an existing forecast, Harmon says, Director-Enterprise is flexible enough that the manager can override its staffing recommendations. This circumstance might occur if a holiday falls during mid-week and the manager knows the center will require fewer employees than the software suggests. Conversely, if SGI has a product launch or product upgrade, it can overstaff engineers with that domain expertise in anticipation of increased call volume, Harmon says. Today SGI enjoys between a 92 percent and 95 percent performance rating--that is, only 5 percent to 8 percent of total calls are not handled within the company's defined service levels, Harmon says. Although happy with this result, the company is using Director-Enterprise data to explore the cost implications of pushing that number so 97 percent of calls are handled within expected service levels, he adds. "How much will it cost to get to ninety-seven percent, and is it worth spending the money?" Harmon asks. He is also analyzing what additional cost savings the company could capture were it to lower service levels to say, one minute to a live voice and six minutes to a support engineer. As much as Harmon might like Blue Pumpkin to make this decision for him, this is one tactical business call he will have to make himself.
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