Highlights from the Merchants Global Contact Centre Benchmarking report 2006
To give you a better idea of some of the issues covered I have selected what I consider key-issues and 10 trends identified by the report.
Cost versus performance focus
Over the last year we have seen major shifts developing in the contact centre industry, particularly from a cost-orientated to a performance-centred culture. This performance orientation is taking into account three major parties involved: the customer, the organisation and the staff.
Specifically focusing on customers, organisations are increasingly using qualitative measures of their performance. Many centres now track customer satisfaction and first contact resolution. Customer satisfaction is no longer an add-on from the marketing department, but is now used as a measure for individual agent, collective team or centre performance. In contrast to the use of customer-orientated measures, there exists a continued deterioration of traditional quantitative measures such as speed-to-answer and abandonment rate. Whilst these do not necessarily reflect business outcomes, they are input to measures that reflect some part of the customer experience.
Staff attrition and absenteeism
There is a general decline in human resource measures, particularly staff attrition and absenteeism. Current figures clearly illustrate that the industry is not marketing itself effectively and investing in human capital. For example:
● Many countries and industries are suffering from high levels of attrition. These have a direct and significant impact on customer service, due to the extensive loss of experience and the learning curve for new agents (the time required for an agent to become competent varies from three to 12 months)
● Absenteeism has a significant impact on performance. When staff members are unexpectedly missing from their shift (and this has not been built into the forecasts) the impact on service levels is considerable
In the past, rigid technology and basic implementations have led to low levels of uptake of newer interactive technologies, particularly speech self-service. Negative experience with voice technologies, general scepticism of new technology and reduced technology investment are some of the reasons. However, recent developments in voice-based self-service tools now mean that substantial adoption of speech-enabled self-service will take place over the next couple of years.
In contrast, the internet and email have already become standard communication channels for written self-service over the last five to ten years.
Internet Protocol (IP)-based architectures
Organisations are reviewing their architectures in terms of their ability to meet current and forecasted requirements. The biggest catalyst is the general movement towards internet protocol (IP)-based technologies, or technologies and communications standards that are based on the internet.
More specifically, there is a trend towards IP telephony: adopting IP as opposed to the traditional TDM-based solutions is allowing organisations to reduce capital and operating expenditure. Organisations considering IP telephony will naturally focus on the highest cost telephony areas and in most cases the contact centre is top of the list.
1. Increasing use of hybrid operating models – The findings show a dramatic increase in outsourcing, co-sourcing and in-sourcing solutions. For example, the findings show that there is an increase from 4% in 2004 to 11% this year in the number of organisations that select in-sourcing as their final contact centre solution. Additionally, co-sourcing is also more popular with 10% using this model as opposed to only 1 % in 2004.
2. New technology procurement options – Organisations are looking for better utilisation of capacity. Though there is still a strong emphasis on cost containment and efficiency improvements within contact centres’ existing technology infrastructures, there are also indications of renewed interest in new IT investment, with 78% of centres including a technology component in their contact centre development strategy.
3. Increased usage of IP Technology – The findings show that there is also a heightened awareness of the benefits that IP-based architectures can offer centres. Some examples of where this technology has shown initial benefits are in offshore deployments where the majority of the technology resides in the home country with IP connectivity
used to extend operations into low-cost-destination centres. Overall, 20% of survey participants use IP-architectures within their centres and another 5% plan to use it within the next 12 months.
4. Off shoring set to continue – There are indications that migration to low cost locations is making an impact with 7% of centres being established to replace another in a different country or region. In terms of low cost location migration, an overwhelming 98% of organisations stated that the key benefit from this was cost reduction.
5. Abandoned rates vary across industries – The dissimilarities in the particular industry sectors that participated in the survey can be clearly seen in abandoned call statistics. For every 100 calls received, on average 22 are abandoned in the service provider and telecommunications industries, 10% in the media and entertainment, financial services, government, education and health and travel and transport industry; and 5% in the manufacturing and products and energy and utilities industries.
6. Business case use and financial orientation vary across regions – Only 45% of respondents were able to confirm that a business case had been produced prior to the establishment of their contact centre. A concerning 34% of participants were unaware of whether a business case had been produced or not. This may be due to business cases being developed at a senior or board level and the contact centre management either not being involved in or aware of its formulation. 65% of those participants with a business case in place confirmed that cost reduction was the primary objective and basis for the rationale.
7. Evidence for labour cost arbitrage – The single largest component of contact centre budgets is the labour cost, which equates to 68% of operating budgets overall. However, the labour arbitrage advantages of regions such as Asia and Africa are evident when comparing the monthly agent seat costs. Overall, Asia is 50% cheaper than North America and 60% less than the equivalent seat in Europe.
8. Rationalisation and consolidation continue – Organisations continue to consolidate and rationalise their contact centres in order to drive cost efficiencies. 30% and 31% of centres have rationalised and consolidated their contact centres in the last two years and 26% and 35% plan to undertake these initiatives in the next two years.
9. Increase in call duration – The average duration of inbound calls has continued to rise, with the findings showing a current level of 240 seconds. Post call wrap-up time has also increased and has now surpassed call duration in length, with an average time of six minutes (or approximately 360 seconds).
10. One in five calls are handled through a self-service channel – On average, 20% of all -inbound calls offered are handled via a self-service IVR solution. Of these calls, respondents indicate that 76% of the transactions were successfully completed to the satisfaction of the customer.
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