 Tactical
Centers: Rest in Peace
By Bill Durr
Chief Evangelist
Blue Pumpkin
Contact center management teams have been contemplating
their evolution from purely tactical to more strategic positioning
within the enterprise for several years. While many wish
this transition were as simple as flipping a light switch,
the reality is that the industry is embarked on a difficult
journey. If you thought that this journey would proceed
at its own pace, carrying your center along with the prevailing
current, I urge you to think again after considering two
recent news items.
News item 1: Dimension Data, a global
systems integrator with special emphasis upon the contact
center, recently reported that their work in India leads
them to predict that nearly 200,000 agent positions will
be outsourced from North America over the next several years.
The key driver? Sharply lower labor costs.
News item 2: Southwest Airlines announced
that it will close three of its nine call centers in the
United States during the first quarter of 2004. Executives
at Southwest said that Web bookings had increased significantly,
accounting for nearly 55% of all travel reservations at
the airline. This has reduced the number of telephone calls
into their reservations centers, leading to a consolidation
that will see 1,900 agent positions vanish.
These two news items suggest that the days of purely tactical
contact centers are clearly numbered. Prevailing wages for
highly educated workers in India are 20% of the typical
wage in the United States. Web commerce grows inexorably
because of ease and convenience. For center management teams
the drive to strategic status now takes on a new impetus:
Change or die.
The call center industry and its management teams would
not be in this predicament but for an historical accident
that fundamentally shaped call center management practices.
When the very first call centers were created to provide
directory assistance, executives searched for a management
model that could be modified to suit the new situation.
Unfortunately, the model they focused on was the piecework
assembly factories that flourished in the late 1800’s.
These factories operated with a relentless focus on time
management and cost reduction. Coincidentally, these factories
employed mostly women, not unlike the first call centers.
Fast forward to the present. Thirty years later, most contact
centers are still regarded as costs of doing business. And
management’s attempts to reduce cost year over year
have resulted in scripted interactions and rigid procedures
where the main focus is on time. We concern ourselves with
time-oriented measures such as average speed of answer,
average handle time and sign-on time. Much hard work has
been undertaken to make each transaction more efficient.
What we have achieved is the standardization of routine
customer interactions and the transformation of agents into
commodities – enabling the rapid demise of tactical
centers by either electronic self-service or outsourcing
to India.
If contact centers must become strategic or face extinction,
then the fundamental questions include:
| • |
What is a strategic contact center? |
| • |
What do strategic centers do differently from tactical
centers? |
| • |
How can the transformation be accelerated? |
Wishing won’t make it happen. What is required to
make the transition is an entirely new approach to center
management and a simultaneous shift in what centers actually
do and how they interact with the rest of the enterprise.
A recent book by the management guru, Peter Drucker, provides
some clues to the answers for the questions posed above.
Drucker suggests that businesses (and call centers by extension)
are undergoing a fundamental transformation from manual
workers to knowledge workers. A table, listing characteristics
for each kind of worker, follows:
| Manual
Worker Attributes |
Knowledge
Worker Attributes |
| Less Formal Schooling |
Better Educated |
| Measured by Quantity & Quality |
Measured by Contribution |
| Output Quantitative & Objective |
Output Qualitative & Subjective |
| Managed by Others |
Self Managed |
| Policy & Procedure Defines Behavior |
Situation Analysis Defines Behavior |
| Looks for Direction |
Chooses a Direction |
| Coaching is Relatively Simple |
Coaching is More Complex |
| Work is Viewed as a Means |
Work is an End in Itself |
| Cost |
Value Add |
|
Scanning the list, most people would agree that agents
have been regarded as more closely aligned with the attributes
of manual workers. And, this orientation makes sense as
long as the center is engaging in routine tactical transactions.
Strategic centers rely upon the attributes associated with
knowledge workers. Here’s why.
Strategic centers go beyond merely handling tactical transactions
with efficiency. Strategic centers become capture points
for information of vital interest to other enterprise departments.
Capturing and distilling information of interest requires
a degree of customer intimacy and understanding of enterprise
goals that can only be realized by the development of the
human potential that exists inside each center agent. Yes,
calls do get longer. Customer intimacy can never be scripted
or relegated to electronic self-service.
Clearly, one key to becoming strategic to the enterprise
is to have a seat at the senior executive round table. Painfully
few contact center executives have this access today and
it’s our own fault. We will never sit at that table
until we start talking and thinking like senior executives.
Comfortable though it may be, we need to move away from
call volume, average speed of answer and handle times and
begin speaking about revenue and profit opportunities. A
methodology that enables this change in acting and thinking
is performance management.
Performance management is sometimes confused with performance
reporting. They are not the same. Performance management
is a process for establishing and assessing performance
standards and consistently communicating results to all
levels of the organization to achieve strategic business
objectives. The key differences between performance management
and performance reporting involve goals, comparisons to
peer employees and benchmark comparisons. Performance reporting
lacks all of these valuable contexts.
Strategic centers will make use of some time-oriented metrics,
particularly at the agent level. But to become strategic,
a center must create customer-focused, value metrics –
measures that convey the customers’ voices into the
enterprise. Most notably, value metrics for contact centers
will involve quality as judged by the customer, first call
resolution rates and customer satisfaction measured at the
individual agent level.
With a new collection of Key Performance Indicators, strategic
center management teams gain the ability to view their agents
– valuable human resources – in entirely new
ways. Instead of focusing on activities, powerful KPI’s
permit us to see results on an individual agent and team
basis. Armed with this new insight, center management can
take informed steps to raise the performance in truly meaningful
ways for the benefit of the enterprise. And in so doing,
center management teams begin to speak the same language
as enterprise senior executives.
If what you tell senior management consists of the number
of calls received, handled and abandoned coupled with average
speed of answer and/or service level attained, you are portraying
the contact center in terms of a transaction factory and
the agents as human cogs in an assembly line. Thus, it is
no surprise that senior management’s response tends
to be along the lines of “better, cheaper and faster.”
That’s what factories are about.
Instead of reporting to upper management that the contact
center handled 114,500 calls, 10,000 e-mail messages and
250 web site text chat sessions, imagine what the response
and reaction from senior management would be if you reported
200 customer “saves” with an estimated lifetime
revenue stream of approximately $12 million; web site shopping
cart “saves” worth another $1.2 million; and
the resolution of 78% of customers’ complaints on
the first interaction resulting in higher satisfaction and
retention translatable into even more revenues and profits?
Becoming strategic will be difficult for many center management
teams. They will have to let go of some closely held beliefs
and shift their energies from activities to results. An
example: Suppose it’s 1:00p.m. and the workforce management
system projects that you will miss your service level targets
for the rest of the afternoon. The usual reaction is to
reschedule breaks and lunches, cancel meetings, cancel training,
cancel coaching and possibly ask supervisors and quality
monitors to staff the phones. That’s the response
from a purely tactical center. A strategic center would
reschedule breaks and lunches, shrug their shoulders, mutter
“everyone has a bad day”, resolve to find the
root causes and move forward. Slavish devotion to agent
development and value add to the enterprise is difficult
and hard to do because it consciously sacrifices the short
term for the long term.
The era of the tactical contact center is drawing to a
close. Centers must become strategic or face closure. It’s
simply a matter of economics. Performance management processes
enabled by powerful software applications that transform
oceans of data into meaningful information make the journey
less difficult. Management is enabled by powerful information
insights to positively move the performance of the center
in ways that are meaningful to senior executives. The central
challenge facing management teams over the next two years
is to make this transition as quickly and smoothly as possible.
William Durr is Chief Evangelist for Blue Pumpkin, an industry
veteran and author of two books and numerous articles on
topics of interest in the contact center industry. Blue
Pumpkin is the only workforce optimization vendor that delivers
both the science and the art required to optimize the performance
of a company’s most valuable asset – its people.
William Durr is Chief Evangelist for Blue
Pumpkin, an industry veteran and author of two books and
numerous articles on topics of interest in the contact center
industry. Blue Pumpkin is the only workforce optimization
vendor that delivers both the science and the art required
to optimize the performance of a company’s most valuable
asset – its people. |
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