Customer Contact Center Benchmarking Results Executive Summary

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1 Customer Contact Center Benchmarking Results Executive Summary XYC Company SAP Value Engineering

2 Agenda. Executive Summary. Company Baseline, Metrics and Performance Drivers. Best Practices 4. Participant Profile 5. Case Studies

3 ASUG/SAP Benchmarking Designed to Get Actionable Results Strategic Service by ASUG and SAP, launched end of 4 as a forum to exchange metrics and best practices Program covers 5 processes, with 4+ participants who leverage the program to: Build a Business Case for change Compare performance to leading companies, industry peers, and between regions/divisions Assess Value Realization, year-over year Prove Success Customer Contact Center (CCC) launched in spring of 6 Over 5 participants to date SAP 7 / Page

4 Customer Contact Center : Performance Analysis Framework Key Performance Indicators Efficiency Effectiveness Performance Analysis Framework Key Performance Indicators Staffing and Costs (KPIs) Process Independent KPIs Cost per interaction Process specific KPIs Average call handle time, queue time, abandonment rate Customer Satisfaction Employee Turnover Organization Number of contact centers CSRs per supervisor Performance Drivers Technology Application usage Workforce management Channel management/deployment Best Practice Adoption Coverage of best practices Determining importance and coverage gap

5 Study Scope The benchmarking study included analysis of key Customer Contact Center business processes. These processes were classified under three categories. Transactional functions are mainly driven by cost and efficiency, while expertise based or strategy related functions are more strategic and therefore are more related to business growth and industry specific business models Drive Effectiveness Strategic Planning Customer Contact Center Performance Management Drive Effectiveness & Efficiency Expertise Based/ Operational Planning Dispute Resolution Multi-Channel Communication Sales and Marketing Drive Efficiency Tactical Planning Customer Support Management Service Channel Mix Primary Interaction Volumes

6 Participating Company Profile: Industry, Revenue & Cost Profile All Companies XYC By Industry Sector XYC By Revenue 54% Retail, Utilities,.4 % Oil & Gas, Aerospace, 6 6% % Mill Products, >= B >=$5 B, < B >=$ B, <$5 B <$ B IM&C, High Tech, 7 Automotive, 8 By Number of Contact Centers 76% Healthcare & Pharma, Chemical, 5 EC&O, Consumer Products, 4% % > 5

7 Operations Type of Operation Type of Customers Mix of BB and BC, 8% Employees, 8% Business-toconsumer (BC), 4% Business-tobusiness (BB), 58% Partners, 4% End Customers, 58% Number of different CSR Teams 6% % of Customer Service Interactions with Internal Employees 6% % 7% % 7% % Less than 5 Between 6 to More than -5% 6-5% 5-75% 75-% Source: Participant Responses, SAP Analysis

8 Type of Interactions % split of Interactions - Company % split of Interactions - Average Customer Service, 8% Customer Service, 8% Telesales, 4% Telemarketing, 58% Telesales, 4% Telemarketing, 58% Source: Participant Responses, SAP Analysis

9 XYC: Company Snapshot Regions/Divisions Included: Entire Company Participating Team Members, SAP business leader - SCM., SAP Value Engineering Comparative Scope/Timeline XXX compared to all companies as well as the Utilities Industry Data provided is FY 7 Industry Average Queue Time Company Facts Annual Revenue (Millions) Currency Performance Average Call Handle Time + Post Call Work Time Operating Income Technology System Deployed Staffing Levels and Costs Total FTEs Total Contact Center Costs Total Number of Interactions

10 CCC Closing the performance gap could result in X - YM in benefits Performance Results Key Metrics Type Metric XYC Top Quartile Average Potential Benefits: Value of Closing the Gap Efficiency: Cost per interaction Post Call Work Time (sec) $5. $5.94 $.4 Interactions per day per agent Efficiency Cost per interaction Avg. queue time (sec) 55.5 Agent Utilization (%) 7%.4% 4.% Closing the Gap by % to Top quartile Closing the Gap by % to Average Efficiency: Average Call Handle Time Agent turnover % % % 5% Effectiveness Abandonment rate % % Interactions resulting in Sale % % % Closing the Gap by % to Top quartile Closing the Gap by % to Average Customer satisfaction 8 Below Average Better than Average Among Q (top 5%) Key Observations At the macro level XYC Customer satisfaction is reflective of superior performance, but its Cost per interaction has significant scope for improvement The operational metrics reveal that Call handle time, queue time and abandonment rates reveal that Top quartile companies handle call traffic more efficiently SAP 7 / Page

11 XYC Best Practices adoption measures CCC Process maturity Performance Results Best Practices Customer Service/Case Management Problem/Dispute Resolution Interaction Center Tools & Processes Key Observations Best practice adoption is worse than average on 6 out of best practices A quarter of customer service interactions happen at retail stores offering a great opportunity to delight customers through better service delivery Important to have reliable and consistent service delivery across different interaction channels Multi-Channel Communication Contact Center Sales/Marketing Interaction Center Reporting/Performance Management Significant coverage gap Moderate coverage gap Low coverage gap SAP 7 / Page

12 CCC: Performance Improvements driven by key value drivers Q4 Average st Quartile C Inbound Calls as a % of total interactions C A B Expected Benefit D E What moving the needle could mean to XYC Decreased dependency on inbound calls leading to cost savings C Outbound Calls as a % of total interactions C A B D E Ensuring optimal channel mix for improved cost-benefit tradeoffs Cost Per FTE Cost Per Interaction A 4A B 4B C C4 C 4C D 4D E 4E Increased efficiency leading to savings Increased efficiency leading to savings Avg. Call Handle Time (Sec) 5A% C5 5B% 5C% 5D 5E Lower Call handle time leading to cost savings and improved customer experience C6% Avg. Post Call Work Time (Sec) 6C% 6A% C7% IC Management FTEs as a % of total FTEs (%) 7C% Avg. Agent Utilization Rate (%) 7A% 8A 6B% 7B% 8B% C8% 8C% 6D 7D 8D 6E 7E 8E Reduce off-line work and hand-offs to close customer interactions Reduced process redundancy leading to lower spend on management processes Enhanced agent utilization leading to higher productivity % of interactions which result in a Sale (%) 9A% 9B% C9% 9C% 9D 9E Higher revenue per interaction % of interactions resulting in a Cross-Sell % of interactions resulting in an Up-Sell A% A% B% B% C% C% C% C% D D E E Higher deal size Higher deal size SAP 7 / Page

13 CCC: Improved best practices adoption drives value capture Contact Center Sales/Marketing Multi-Channel Communication Average Q ABC Importance ABC Coverage Customer Service/Case Management Problem/Dispute Resolution Interaction Center Tools & Processes Interaction Center Reporting/Performance M... Areas with largest Internal Gap Multi-Channel Communication Opportunity Areas Contact Center Sales/Marketing Customer Service/Case Management Problem/Dispute Resolution Interaction Center Tools & Processes Interaction Center Reporting/Performance Management

14 Agenda. Executive Summary. Company Baseline, Metrics and Performance Drivers. Best Practices 4. Participant Profile 5. Case Studies

15 Service Level and Efficiency - Telemarketing Queue Time (sec) Telemarketing 4 Abandonment Rate Telemarketing 4 Interactions Per day Per CSR - Telemarketing Q Average Q4 XYZ Q Average Q4 XYZ Q Average Q4 XYZ Call Handle + Post Call Work Time (sec) Telemarketing 4 Response Time (Hrs) Telemarketing Q Average Q4 XYZ Q Average Q4 XYZ Source: Participant Responses, SAP Analysis

16 Service Level and Efficiency Customer Support Queue Time (sec) Customer Support 4 Abandonment Rate Customer Support 4 Interactions Per day Per CSR Customer Support Q Average Q4 XYZ Q Average Q4 XYZ Q Average Q4 XYZ Call Handle + Post Call Work Time (sec) Customer Support 4 Response Time (Hrs) Customer Support Q Average Q4 XYZ Q Average Q4 XYZ

17 Service Level and Efficiency - Telesales Queue Time (sec) Telesales 4 Abandonment Rate Telesales 4 Interactions Per day Per CSR - Telesales Q Average Q4 XYZ Q Average Q4 XYZ Q Average Q4 XYZ Call Handle + Post Call Work Time (sec) Telesales 4 Response Time (Hrs) Telesales Q Average Q4 XYZ Q Average Q4 XYZ Source: Participant Responses, SAP Analysis

18 Service Level and Efficiency Annual Attrition Rate 4 Agent Utilization % 9% Actual Target Number of Employees Per Supervisor % 7% 65% 6% 5% 7% % Q Average Q4 XYZ Q Average Q4 XYZ Q Average Q4 XYZ % of Contact Center Employees - Remote 4% % of Contact Center Employees - Onsite 4% 5% 6% 5% 6% % % Q Average Q4 XYZ Q Average Q4 XYZ Source: Participant Responses, SAP Analysis

19 Volume of Operations % split (Telemarketing) - Company Fax, 8% % Time split (Telesales) - Company Fax, 8% % split (Customer Service) - Company Fax, 8% , % Inbound Calls, % , % Inbound Calls, % , % Inbound Calls, % Web Chat, 6% Self Service, 6% Outbound Calls, 8% Web Chat, 6% Self Service, 6% Outbound Calls, 8% Web Chat, 6% Self Service, 6% Outbound Calls, 8% % split (Telemarketing) - Average Fax, 8% % split (Telesales) - Average Fax, 8% % split (Customer Service) - Average Fax, 8% , % Inbound Calls, % , % Inbound Calls, % , % Inbound Calls, % Web Chat, 6% Self Service, 6% Outbound Calls, 8% Web Chat, 6% Self Service, 6% Outbound Calls, 8% Web Chat, 6% Self Service, 6% Outbound Calls, 8% Key Observations XYC Company Observation Source: Participant Responses, SAP Analysis

20 Operations Time Split % Time split (Telemarketing) - Company Fax, 8% % Time split (Telesales) - Company Fax, 8% % Time split (Customer Service) - Company Fax, 8% , % Inbound Calls, % , % Inbound Calls, % , % Inbound Calls, % Web Chat, 6% Self Service, 6% Outbound Calls, 8% Web Chat, 6% Self Service, 6% Outbound Calls, 8% Web Chat, 6% Self Service, 6% Outbound Calls, 8% % Time split (Telemarketing) - Average Fax, 8% % Time split (Telesales) - Average Fax, 8% % Time split (Customer Service) - Average Fax, 8% , % Inbound Calls, % , % Inbound Calls, % , % Inbound Calls, % Web Chat, 6% Self Service, 6% Outbound Calls, 8% Web Chat, 6% Self Service, 6% Outbound Calls, 8% Web Chat, 6% Self Service, 6% Outbound Calls, 8% Key Observations XYC Company Observation Source: Participant Responses, SAP Analysis

21 Information Technology Deployed Customer Contact Application Used R/ Others, 7% Custom, % Communication Infrastructure Management Vendor Avaya Wicom, % Others, 7% RightNow, 5% SAP, 6% Siemens, 5% Alcatel, 6% Oracle/Siebel, 5% Nortel, 5% Amdocs, % Aspect, % Pegasystems, % Microsoft, % Cisco, % Avaya, % CTI Vendor Alcatel Others, 4% Avaya, 5% Interactive Intelligence, % Genesys, %

22 Customer Satisfaction Customer Satisfaction Rating Very Dissatisfied, % Very Satisfied, 6% Dissatisfied, 7% Neither Satisfied Nor Dissatisfied, 7% Satisfied, 9% Source: Participant Responses, SAP Analysis

23 Sales Performance % interactions resulting in Sale % Customer Service interactions resulting % interactions resulting in Up-Sell 45% in Cross-Sell 45% 45% 5% 5% 5% 5% % 5% % 5% % Q Average Q4 XYZ Q Average Q4 XYZ Q Average Q4 XYZ Average Retention Offer Success Rate 45% 5% 5% % Q Average Q4 XYZ Source: Participant Responses, SAP Analysis

24 Cost Metrics Cost Break-up (% of Total Cost) Avg - XXX Q - XXX ABC 5% % 5% % 5% % 5% % Headcount Telecommunication Training Tech nology External Spend Other Costs Source: Participant Responses, SAP Analysis

25 KPI Cost Per Interaction Cost Per Interaction $6.8 $8.5 $5.86 $.67 Q Average Q4 XYZ Key Observations <Company Name> s cost per interaction is above average which likely indicates the impact of the higher call handle time for <Company Name> Savings directly impacts the bottom line: a % decrease in cost is the equivalent of a % increase in operating income Source: Participant Responses, SAP Analysis

26 Agenda. Executive Summary. Company Baseline, Metrics and Performance Drivers. Best Practices 4. Participant Profile 5. Case Studies

27 Customer Service/Case Management # Best Practice Listing Gap Detailed customer profiles, transaction history (purchases, invoices), preferences/permissions, and interaction history are maintained for each customer and are available at the point of interaction in the Contact Center Best Practice Ranking Between Avg and Q 5 4 = No Coverage 5 = Full Coverage Contact Center agents have access to "back-office" information such as orders, billing, inventory and pricing information Multiple levels of customer service agents are used to optimize customer service resources and performance 4 Customers are segmented based on factors such as customer lifetime value and tiered service is delivered which impacts access to various service options across different channels Avg Q Coverage Importance 5 A blended agent approach is utilized to combine inbound and outbound activities to optimize performance 6 Contact Center supports multi-lingual agents and customers Key Observations XYC Company Observation 7 8 Customer surveys are used to capture customer feedback and manage contact center effectiveness Offshoring has been explored or is currently being used as an option to lower contact center costs

28 Problem/Dispute Resolution # Best Practice Listing Gap The Contact Center has a formal process for closing the loop with customers on outstanding issues Best Practice Ranking Between Avg and Q 5 = No Coverage 5 = Full Coverage Service tickets, cases, etc are categorized for handling, escalation and reporting purposes 4 Customer support responses are tracked and measured against pre-defined service level agreements 4 A closed loop process is utilized to link product-related problems/trends to product development/marketing Avg Q Coverage Importance 5 A seamless transition takes place between billing disputes and collections when relevant 6 Workflow is used to automate escalation and tracking of open customer issues 7 Level agents are aware of the nature of inquiries that have been escalated to them without having to reassess the caller's issue Key Observations XYC Company Observation 8 Agents have access to a common repository or knowledgebase of solutions and frequently asked questions (FAQ's) 9 Agents have access to service history and installed products information for customers Common case types can quickly be identified to create "supercases" Agents have robust search capabilities within the system to search existing interaction records and objects such as Accounts, Contacts, Orders, prior Service Tickets, etc

29 Interaction Center Tools & Processes # Best Practice Listing Gap Knowledge management tools are integrated within the interaction center platform so that Agents do not need to leave the application Best Practice Ranking Between Avg and Q 5 4 = No Coverage 5 = Full Coverage Agents and customers can rank the helpfulness of solutions in the repository in order to improve relevance and quality 4 Content in the knowledge management repository is frequently updated based on emerging issues and new solutions Rules-based guidance such as alerts and event triggers are pre-configured and used to aid the agent during customer calls Avg Q Coverage Importance 5 Interactive scripting tools are used to aid in call handling, wrap-up scripts, etc 6 A universal agent Inbox is used for handling , telephony, fax, and other CRM Business Transactions (service tickets, sales orders, etc). Key Observations XYC Company Observation 7 Broadcast messaging is used to alert contact center agents to sudden changes in product issues, call volumes, promotions, etc 8 Role-based system access is used to provide appropriate functionality and capabilities to different levels of agents and supervisors 9 Technology is leveraged to enable customers to manage their own accounts and inquiries online

30 Multi-Channel Communication # Best Practice Listing Gap Multi-channel communication (voice, , chat, fax, web) is leveraged to optimize customer contact Best Practice Ranking Between Avg and Q 5 = No Coverage 5 = Full Coverage A common application is used to manage and track communications across all channels (voice, , chat, fax, web) 4 4 Channel mix is actively managed to drive interactions to lower cost alternatives such as and web Customer self-service inquiries are tracked as part of customer interaction history and are made available to all relevant front-office channels Avg Q Coverage Importance 5 Customer value metrics are maintained and used for segmenting customers for call routing, etc 6 Skills-based routing is used to optimize usage of individual or group skills Key Observations XYC Company Observation 7 Interactive voice response (IVR) is used to identify callers and/or issues prior to call routing 8 Computer Telephony Integration (CTI) is used to identify callers, route calls and perform screen-pops to increase agent productivity 9 IP telephony has been explored or deployed in the contact center to lower infrastructure costs Virtual workforce management is used to off-load agents from cell centers to home offices, and leverage off-peak hours

31 Contact Center Sales/Marketing # Best Practice Listing Gap 4 Contact center employees are trained to identify opportunities to cross-sell a new product or service to existing customers, and know how to convert this opportunity into a lead or sale as appropriate A real-time offer management engine is used to generate inbound cross-sell/upsell product recommendations or retention offers based on the characteristics of the caller (product, purchase history, live interaction details, etc) Customer account, order history and payment status is updated and available in real-time Vouchers, coupons, rebates, and credit memos can be applied within the Customer Contact Center and are fully integrated with the financial system Best Practice Ranking Between Avg and Q Avg Q Coverage Importance = No Coverage 5 = Full Coverage 5 6 Call Center agents can efficiently respond to inbound inquiries for product availability, pricing, quotes or orders Call Center agents can efficiently respond to inbound inquiries for order status, changes, shipping information, returns, etc Key Observations XYC Company Observation 7 Call Center agents have access to product warranty information to process warranty claims 8 Call Center agents have the ability to perform outbound telemarketing activities from the contact center

32 Interaction Center Reporting/Performance Management # Best Practice Listing Gap A formal quality assurance process is in place to ensure a consistently high level of customer service is delivered in every interaction Information collected during contact center interactions is analyzed and used to identify opportunities to proactively enhance customer relationships and/or reduce contact center costs Best Practice Ranking Between Avg and Q 5 4 = No Coverage 5 = Full Coverage Data warehouse/business analytics tools are used to perform in-depth trend and performance analyses 4 Online Transaction Processing (OLTP) tools are used to monitor service ticket reporting from within the contact center application Avg Q Coverage Importance 5 Reporting tools are used, with or without CTI, allowing monitoring and drilldown into call statistics such as call volume, SLA compliance, average handling time and abandonment rates Key Observations 6 Manager dashboards are used to monitor contact center volume and/or agent activity XYC Company Observation 7 Service excellence, cost analysis and profitability measures are all tracked on an ongoing basis

33 Agenda. Executive Summary. Company Baseline, Metrics and Performance Drivers. Best Practices 4. Participant Profile 5. Case Studies

34 Participating Company Profile: Industry, Revenue & Cost Profile All Companies XYC By Industry Sector XYC By Revenue 54% Retail, Utilities,.4 % Oil & Gas, Aerospace, 6 6% % Mill Products, >= B >=$5 B, < B >=$ B, <$5 B <$ B IM&C, High Tech, 7 Automotive, 8 By Number of Contact Centers 76% Healthcare & Pharma, Chemical, 5 EC&O, Consumer Products, 4% % > 5

35 Operations Type of Operation Type of Customers Mix of BB and BC, 8% Employees, 8% Business-toconsumer (BC), 4% Business-tobusiness (BB), 58% Partners, 4% End Customers, 58% Number of different CSR Teams 6% % of Customer Service Interactions with Internal Employees 6% % 7% % 7% % Less than 5 Between 6 to More than -5% 6-5% 5-75% 75-% Source: Participant Responses, SAP Analysis

36 Agenda. Executive Summary. Company Baseline, Metrics and Performance Drivers. Best Practices 4. Participant Profile 5. Case Studies

37 CCC Customers

38 Philips Electronics with mysap CRM Company Location Industry Products/Services Web Site SAP Solution and Services SAP Partner Phillips Lighting Netherlands Consumer Products - Electronics Electronics mysap CRM application SAP Consulting organization The efficiency of the order desk has been increased, and customers now find it easier to do business with us. The mysap CRM solution has replaced some local applications. Louis Luijten, CIO and SAP Program Manager, Philips Lighting Challenges and Opportunities Need for a single integrated system for all branches after restructuring of Philips organization in 996 Objectives Increase efficiency after growth through acquisition Implement smart sourcing strategies Implementation Highlights Implementation of marketing campaign management and customer interaction center currently in process Seamless interaction between internal and external salespeople Why SAP mysap Customer Relationship Management (mysap CRM) solution chosen for its seamless integration with SAP R/ software (functionality now found in the mysap ERP solution) Benefits Mobile access to sales information for field staff Increased efficiency of the order desk Replacement of some local applications

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