It’s hip2b2

I was just doing a bit of reading about call centers lately. I have been working in this sunshine industry for about five (5) years already. I do not actually do the taking or making of call but I do build and support call center infrastructure. The call center industry in the Philippines is a sunshine industry. Why? The DTI has this nice website with a good summary of information you will need about the industry. Here are the two (2) most important reasons in my humble opinion.

Labor Pool. With higher education priority, the literacy rate in the country is 94.6% - among the highest. English is taught in all schools, making the Philippines the world’s third largest English-speaking country. Every year, there are some 350,000 graduates enriching the professional pool.

Low cost of doing business. Wages are typically less than a fifth of that in the U.S. Local communication, electricity and housing costs are also 50% lower compared to the U.S. rates. Foreign companies that are now outsourcing programming and business processes to the Philippines estimate 30 to 40% business cost savings, 15 to 30% call center services and application systems and 35 to 50% software development.

But, that is not what I came to write about. Of course, the Philippine BPO story is definitely worth writing about. However, I wanted this to be a collection of notes for call centers. So, here are a few terms we need to get out of the way.

• Call Center. Is a facility created to receive or make telephone calls on behalf of a customer. In the case of the outsourced call center industry, the customer here is the company whose customers need to be managed. There are two (2) major types of call centers based on the direction of the calls. One is the outbound call center. An outbound call center primarily makes outgoing calls to customers. The most common example of an outbound call centers are ones that focus on telemarketing (sales and promotions) and market research (surveys). The other type is the inbound call center that primarily receives calls from customers. Examples of inbound call centers are customer and technical support facilities and operator services. A call center that does both inbound and outbound calls is called a blended call center. A call center that also handles faxes, email and other forms communications is called a contact center.
• Agent. Is the person responsible for taking and making a call in a call center. For telemarketing, the agent is called a telemarketer. For customer service call centers, they are typically called customer service representatives (CSRs) and technical support representatives (TSR) for their technical counterparts. The typical agent work environment is composed of a workstation with a computer (for CRM interaction) and telecommunications equipment (such as a telephone). These people must have above average language skills and pleasing personalities. They are also closely monitored for performance and productivity. Call center agents are one of the most productive types of employees.
• Customer Relationship Management (CRM) system. Is a system that contains and maintains information about ones customers. This is typically used by a call center to determine critical pieces of information necessary for the call. Credit and collection call centers need access to customer and credit information. Telemarketers needs location, payment and interest-related (shopping history) information.
• Computer Telephony Integration (CTI). In order to further optimize efficiencies in call centers, most of them utilize technology to improve their processes. On of the most challenging tasks of call centers is call management. Therefore, CTI is used to integrate computer systems (such as CRMs) to telephony systems (telecommunications switches and circuits) to enable a significant amount of automation.
• Interactive Voice Response. Is a computer system that makes use of CTI and computing technology to automatically handle calls without a human operator. These systems typically use pre-recorded or synthesized voices. Sometimes, they also employ voice recognition technology instead of regular Dual-tone Multi-Frequency (DTMF) tones. IVRs are ideal for query systems especially those used in banking and finance.

The key ingredients of call center can be summarized as customer information (typically located in a CRM accessed via a computing console), telecommunications facilities (typically connected to computing systems via CTI) and agents. The most important of all the ingredients are the call center agents.

Of course, the main advantage of using a dedicated call center facility is efficiency. This is what call centers do best. They are designed with the appropriate technology, processes and metrics to ensure a completely optimized environment. This is why call centers make good use of modeling to ensure the most optimized solution is being used. Typically, queuing theory (a branch of mathematics) is used to model the call flow of call centers. Given a particular call distribution (and call constraints) call center administrators can determine the optimal levels of circuits, agents, workstations, queues and others variables.

Some of the key constraints are:

• Service Level Agreement (SLA). This can refer to a lot of things. However, in call centers, this usually refers to the number of rings before a call is answered (time to answer).
• Queue Size is the maximum number of customers waiting on queue.
• Queue Waiting Time (WT) or Holding Time is the maximum amount of time a customer is allowed to wait in a queue.
• Average Talk Time (ATT). This refers to the mean conversation time between the agent and the customer. This only refers to the productive portion of the call.
• After Call Work (ACW). This refers to the mean time after a call that the agent requires to perform auxiliary tasks related to the call.
• Average Handling Time (AHT). Is the typically the sum of the ATT, ACW and WT. This is the true cost of call metric.
• Call Per Hour (CPH). This is the number of call handled by an agent per hour. There are special variants of this such as Sales Per Hour (SPH) used in telemarketing and Inquires Per Hour (IPH) used in directory services.
• Percentage Busy Calls. This refers to the percentage of calls where the customer is presented with a busy signal (no circuits are available). This is a sign that telecommunications resources are not sufficient.
• Percentage Abandon Calls. This refers to the percentage of calls where the customer hangs-up or “abandons” the calls. This is typically a sign of customer dissatisfaction.
• Percentage Drop Calls. This refers to the percentage of calls dropped because no agent is available when using a dialer (typically a predictive dialer). This can lead to customer dissatisfaction and is highly regulated.

These are some of the main factors when building a call center. Some of them have to be minimized and some must be maximized. Of course, they should all be optimized. It is pretty clear that the most effective call centers are marked by efficiency. Efficiency does not even have to be a bad thing. Some people claims that efficient call centers are bad places to work. On the contrary, there are call center that are rated some of our countries most desirable companies to work for. So efficiency is a good thing.

Of course, there are other things that also need to considered such facilities/work environment, agent training, procedures and processes, technology, telecommunications needs and many more. That is something for another article.

This entry was posted on Monday, April 9th, 2007 at 4:29 am and is filed under Musings and Speculations. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.