Decision-Making Time: Getting Ready for Growth

By Ric Kosiba, President, Bay Bridge Decision Technologies

The first half of the year is loaded with some fine contact center conferences. We attended the NICE/IEX conference, and earlier, we enjoyed the SWPP conference and the CenterBridge Users’ conference. What great events! Each of these events has a lot to offer contact center professionals, whether they are experienced or new to the workforce planning discipline. We learn so much at these great conferences.
This year’s conferences felt very different from those of last year—the atmosphere has felt much more optimistic, like business overall might be loosening up. While last year there were discussions of how business was changing and how best to control costs, this year the discussions seemed to be more focused on managing change as the economy has bottomed out and business moves toward careful growth.
You can feel the optimism—not necessarily heady optimism, but cautious optimism mixed with relief, and mixed with a sense that “we’ve been there before.” There’s a feeling that we know what we need to do next: we need to plan for moderate growth.

Managing Growth and Seasonality is a Strategic Planning Problem

Any time that our business changes, our contact center operation requires management to make a series of important resource allocation decisions. Whether we are growing or shrinking, combining or splitting, enhancing, or simplifying, when we contemplate change, our contact center analysts must provide a big picture—longer than next week or next month—analysis of that change. We need to know what will happen to our costs and service under various management decisions. We need to understand the operational and financial business risks associated with responding to an external change.

The only place in contact center analytics that we can go to perform these types of critical analyses is through our strategic/capacity/budgetary planning process.

Managing growth and managing seasonality is a strategic planning problem. While workforce management uniquely helps you to manage the chaos brought about by poor strategic planning or unexpected events, workforce management systems lack the algorithmic tools required to make those long term, seasonal resource decisions. This is why most companies have purchased a strategic planning system or built their own internal system or spreadsheets. Your strategic planning process serves to prepare your operation for both change and for seasonality.

Growth and Speed to Decision

To plan well for expected growth, you need one of two things: an accurate crystal ball to tell you your exact center demand over the next 52 weeks, or an accurate what-if system to tell you what happens to your costs and your operational performance under a variety of possible growth scenarios. Since none of us have a crystal ball, our best decision-making device is a validated long term model of our center network, and this model serves as our resource decision-making engine.

Decision-making, in times of change and variability, is even more important than during stable times. Further, speed to decision is even more important in times of significant change. We’ve all heard stories of contact center systems that fail to detect a change in their demand: operations that are too slow to respond to an uptick in demand can enter the “call center death spiral” where the operation lags behind in hiring, leading to terrible agent occupancy and customer service performance, burning out agents and leading to severe customer dissatisfaction. This can be prevented with the right tools and the right business processes.
Given the seasonal nature of our businesses, even small delays to decision can lead to operational nightmares.

But how sensitive is our operational performance to a “delay to making a hiring decision?” And so I created a quick scenario using CenterBridge in order to determine the performance associated with hiring decisions as a small uptick in volume demand is noticed. In this example, I assume a two-week training time, a four-week learning curve, a typical but seasonal volume distribution, and typical limitations on classroom size, etc… The question is: “If the capacity/staffing analysis is too slow, or if the volume uptick is not recognized, or if the time to a hiring decision is a bit late, what will the resulting service be?” I assumed that hiring decision-making, via any combination of these reasons, is delayed only five weeks, and I graphed the resulting service expected for the next seven months or so.

The first graph represents the service resulting from pursuing a mathematically optimal hiring/overtime plan (given normal constraints) if the uptick in volume is known and responded to relatively quickly (the blue line), compared to an optimal hiring/overtime plan if the uptick is responded to five weeks later (the green line).

What is startling to me is the vast difference in performance of these two scenarios. Assuming a service level goal of 80% within 20 seconds, the time to decision becomes the critical factor in hitting that service goal. Further, those five weeks of “waffling/analyzing/not-seeing” condemns the operation to terrible performance for the rest of the year. Recognizing and acting upon a new forecast is completely controllable—not recognizing or acting creates an environment that may be unrecoverable. Time to decision is very important.

I would argue that the more important performance metric —especially for sales centers—is abandonment rate. Abandons represent customers who have “voted with their feet” and either taken their business elsewhere, or been frustrated enough to think our business cannot help them adequately. Our scenarios clarify the results of slow decision-making; the expected abandonment rates are plotted associated with quick decision-making (blue) and slower five week delay-to-decision (red) below. Again, time-to-decision is critical.

Managing Growth Properly

So, back to the change associated with a warming-up economy. As our operation and our economy changes, we should note that our customers will also be changing—if we let them. At times like these, customers are more susceptible to the wooing of our competitors and more open to new business relationships. Now is not the time to have a service meltdown but, as our example shows, now is a time when a meltdown is more likely if we don’t plan ahead.

In a growing economy our focus usually shifts. Corporate initiatives tend to affect contact center operations in obvious ways:

• We focus on keeping our current customers through marketing and superior customer service.
• We look to find additional revenue through segmentation and cross selling our current customer base.
• Many companies view times of change like these as times to gain market share: we market to our competitor’s customers (and take advantage of their service mistakes).

For these reasons, our strategic/budget view is very important to get right. Our simple example of the time-criticality of hiring planning shows how sensitive contact center networks can be to growth. As part of our standard strategic planning process, we should ask: what happens if we delay this hiring decision?

Ric Kosiba is a charter member of SWPP and co-founder and President of Bay Bridge Decision Technologies. He can be reached at EDK@BayBridgeTech.com or (410) 224-9883.

©2010 Society of Workforce Planning Professionals