Want to Change the Game with Contact Center Vendors? Select Them Differently. The Accenture Vendor Management Framework

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1 Want to Change the Game with Contact Center Vendors? Select Them Differently. The Accenture Vendor Management Framework

2 In today s marketplace, companies in a wide range of industries rely on outsourcing as a critical part of their overall workforce strategy. They establish business relationships with multiple onshore, nearshore and farshore contact center vendors to provide customers with front-office and back-office support while optimizing spend. However, companies seldom discern whether they are selecting the right contact center vendors, contracting for outcomes, managing them effectively and executing correctly for results (see Figure 5). Doing these four steps differently can not only change the competitive game but also give companies a definitive edge on the path to high performance. Why is this four-part process so critical now? According to the annual Accenture Global Consumer Pulse Research, customer expectations are evolving rapidly. 1 In order to acquire and retain customers, companies should deliver a consistent and orchestrated customer experience across all channels. Since contact center vendors often serve as the first touch point in the customer experience, companies need to work with the right ones. To build this network of vendors as part of their workforce strategy, the most successful companies have taken outsourcing relationships well beyond a subordinated vendor or vendor of choice mentality. (For a fuller description, see sidebar entitled How do standard vendor relationships compare? ) These forward-thinking companies are cultivating strategic relationships with an optimized mix of contact center vendors. Accenture experience shows that this type of collaborative and open business relationship can deliver the greatest value to both parties, as well as to customers. The first step to creating strategic relationships, and the focus of this point of view, is selecting vendors differently. 2

3 3

4 A Different Approach to Selecting Vendors Do you have the right contact center vendors? Are they your strategic collaborators? Selecting differently begins with companies considering their long-term strategic and operating objectives, combined with their defined customer experience blueprint, to become a customer s provider of choice. With these goals in mind, companies can work to realign their internal and outsourced workforces to deliver on these objectives. Part of this approach includes identifying the contact center vendors within a company s existing network that are capable of teaming strategically, then incentivizing and rewarding them based on how well they achieve the desired outcomes. When needed, companies can leverage other qualified scale and niche players to round out the network. The Accenture Vendor Management Framework defines 12 interrelated capabilities that should be carefully aligned to support strategic teaming arrangements (see Figure 1). Companies can use these capabilities to assess and validate how well their current network of contact center vendors support particular goals. While it is important to look at the 12 capabilities holistically, each company will have unique objectives, blueprints and risks that will prioritize or emphasize certain capabilities above others. The Accenture Vendor Management Framework is flexible and can be used to address the specific requirements of companies across industries, as well as with various mixes of contact center outsourcing. Figure 1: The Accenture Vendor Management Framework includes 12 capabilities for assessing and selecting contact center vendors. Management Approach Business Adaptability Human Performance Resource Shaping Pricing Predictability Customer Experience Differentiation Technology Capability Platform Service Level Alignment Controls Securtiy and Data Protection Business Continuity and Redundancy Work Location Source: Accenture LLP 4

5 The 12 capabilities in alphabetical order are: Business adaptability The manner in which the outsourcing relationship is designed to proactively consider and accommodate business change. Business continuity and redundancy The extent and pace with which services and technology will recover from significant business interruptions. Controls The capability and protocols that provide assurance that key processes and operational functions are carried out in a timely, accurate and complete fashion, as well as in compliance with industry, regulatory and company requirements. Customer experience differentiation The extent to which the customer experience (e.g., products, services, channels, treatments) is tailored to support unique customer expectations. Human performance The extent to which the organization drives and maintains service excellence through sound recruitment, effective resource preparation, professional development, rewards, recognition and retention. Management approach The degree to which outsourced operations, infrastructure, applications, and technology are managed and monitored. Pricing predictability The extent that pricing units and other mechanisms manage transparency, pricing risk and volatility. Resource sharing The extent that some vendor resources needed to perform customer service can be shared and/or leveraged between clients. Security and data protection The level of physical and electronic security needed to adequately protect against information loss or theft, and against unauthorized access, disclosure, use or modification. Service-level alignment The targeted performance measures that drive the service experience for the end customer. Technology capability platform The extent to which technology is unique to the client. Work location The physical geographic site from which customer care operational or technical services are delivered to a specific client. How standard vendor relationships compare Companies typically establish one of two types of business relationships with contact center vendors. The first type, subordinated vendors, are usually relegated to supporting a specific function. Companies usually create complex, tightly-controlled contracts filled with demands describing exactly how the vendor should provide service. As a result, the vendor assumes the majority of the risk in areas like compensation and volume shifts; there is no mutual respect and little opportunity for substantive gain sharing. In a subordinated vendor relationship, companies also tend to provide minimal vendor management, usually via phone instead of through in-person visits. The second, more common type of business relationship is called vendors of choice. This relationship is still largely one-sided with companies prescribing specific actions for vendors. Contracts are relatively strict with some unnecessary complexity, which can limit the vendors creativity. Gain sharing is possible, though it is largely transactional. Companies retain some risk in this approach; however, delivery risks are still weighted more heavily toward the vendors. Finally, vendor management calls contact center sites periodically yet visits rarely. Both of these types of business relationships lack the flexibility, creativity and innovation possible when companies create strategic relationships with contact center vendors. 5

6 How strategic relationships can help companies outperform competitors Companies can often achieve a wide range of benefits from building strategic relationships with contact center vendors, including: Optimized vendor management with right group of vendors--identify vendors that are performing well and invest to improve relationship. Phase out poor performing vendors. Begin operating with the right group of vendors to help achieve common goals and business outcomes. Improved performance through symbiotic relationships Articulate desired objectives, then contract with vendors to help achieve these goals. Drive alignment to common business outcomes, which can increase performance for both parties. Ability to serve customers better and help achieve more efficient operations Increase customer satisfaction levels, while decreasing cost to serve for contact center vendors. Improve first call resolution rates, as well as sales close rates for telemarketing or telecontact vendors. 6

7 Determining Priority Capabilities to Assess Based on their objectives, companies should first determine which of the 12 capabilities are the highest priority for them. To do this, companies should holistically compare their existing maturity in each capability to their target or desired maturity, determining the areas in which they have basic capabilities with contact center vendors in aggregate and the areas in which they are differentiated (see Figure 2). The resulting macro view will reveal the areas where the gap between current performance and target state is the greatest, and will narrow down the five or so capabilities that are the most important to assess for each individual vendor. Figure 2: As a first step, companies should prioritize the five-to-six capabilities they want to assess. Capability Human Performance Controls Service Level Alignment Management Approach Business Adaptability Customer Experience Differentiation Technology Capabilities Security & Data Protection Pricing Predictability Business Continuity & Redundancy Work Locations Resource Sharing Basic Gap (Illustrative) Differentiated You are here Target Source: Accenture LLP 7

8 Evaluating Individual Vendors Next, companies can use their subset of prioritized capabilities to evaluate individual vendors within their existing contact center vendor network. One method is to conduct a short survey (25-30 questions) to pinpoint which vendors have the potential to become long-term strategic collaborators and which vendors should be phased out. To get a balanced opinion, companies should assign a small group of internal assessors, each of whom can assess all contact center vendors to have an applesto-apples comparison. The survey should include a short list of detailed questions for each capability being assessed, along with scoring criteria for basic, competitive and differentiated contact center vendor behavior. See Figure 3 for a few example survey questions and desired behaviors for the human performance capability. Figure 3: Sample Human Performance capability questions to assess individual vendors. CAPABILITY BASIC 1 COMPETITIVE 3 DIFFERENTIATED 5 Human Performance: The extent to which the organization drives and maintains service excellence through sound recruitment, effective resource preparation, professional development, rewards, recognition and retention. What type of interview methods are used by the vendor to hire new employees? Pre-screen Single Interview Multi-phase interview Skills assessment Behavioral interview Multi-phase interview Skills assessment Behavioral interview Role playing What type of rewards and recognition program has the vendor instituted? Vendor only utilizes companysponsored rewards and recognition programs Vendor utilizes companysponsored rewards and recognition programs, and supplements with its own program from time to time Supplemental vendor programs and contests aligned to KPIs Vendor utilizes companysponsored rewards and recognition programs, and makes significant additional financial and operational investment in pay-forperformance programs for all levels of management that align to KPIs Source: Accenture LLP 8

9 As shown in Figure 4, after the assessors complete the survey, a company can analyze the results to develop recommendations for vendor relationships to nurture, enhance, maintain or phase out. Based on the survey results, companies will have a: Defined baseline to leverage in working with and evaluating vendor performance going forward. Common framework and tool to use to address strengths and shortfalls within each vendor relationship. Mechanism to rank strategic relationships using metrics beyond performance. List of identified common areas for global improvement. Figure 4: Illustrative example of vendor assessment survey results based on example data. Strategic Partership Capability vs. Service Level Alignment Nurture Work with vendors to improve performance Enhance Expand within current line of business and/ or into new lines of business if possible Strategic Partnership Capability Phase Out 2.00 Ramp down vendors within 6-12 months Maintain Maintain until new or existing vendors can absorb volume Service Level Alignment Source: Accenture LLP 9

10 Contract, Manage and Execute Differently Once companies have selected their optimized mix of contact center vendors, they can move to the next step in a four-part process to build strategic relationships and manage the workforce (see Figure 5). Figure 5: Companies should do four things differently to help establish and maintain strategic relationships with contact center vendors SELECT DIFFERENTLY CONTRACT DIFFERENTLY MANAGE DIFFERENTLY EXECUTE DIFFERENTLY Aim to be provider of choice Incent/reward players with better cost-per-resolution (cost and quality) Key selection criteria, vendors should be able to team strategically Leverage scale and niche players to round out network Bigger incentives (with higher thresholds), lower penalties Balanced mix of effectiveness, quality and efficiency KPIs Reduced volume commitments Focus on outcomes, adherence, adoption, and greater visibility and control KPI grace periods during ramp Performance and site management Innovation management Global agent management Strategic sourcing Workforce management Business intelligence (BI) and channel analytics Self-service automation Technology support Drive Consistency and Reward Delivery Customer experience blueprint Create Centers of Excellence Eliminate Waste 30/60/90-day forecasting of network and intra-day call management Priority router call management Source: Accenture LLP Hourly/daily/monthly opportunity to gain/lose volume 10

11 The subsequent phases are: Contract differently Using the survey results from the selection phase, companies can develop a road map and timeline for how to manage their network of contact center vendors. This step can be initiated through the contracting process either by issuing new RFPs to preferred contact center vendors or through distributing amendments to current contracts to align vendors with defined strategic relationship principles. Contracting for defined business outcomes also helps companies manage and execute differently. The contracting model for strategic relationships is usually highly flexible and simplified, which encourages innovation and gives vendors the opportunity to serve based on the requirement of customers. In this type of relationship, companies regularly exchange feedback and ideas with their strategic vendors, and the vendors have opportunities for lucrative gain sharing. Risks are balanced between the two entities: companies have the ability to shift volume; vendors have the freedom to run their business. Lastly, vendor management teams visit their contact center sites often enough to understand ongoing performance and operations. Manage differently The groundwork for managing differently is established in the contracting process and continued in the day-to-day supervision of the workforce. One field-tested way for companies to manage contact center vendors differently is to establish a global command center operating model, which serves as the nexus for coordinating and delivering eight core service delivery capabilities that extend across the entire service landscape and delivery ecosystem (see Figure 5). This command and control model helps optimize customer service so that a company s resources, processes and applied technologies are correctly orchestrated. For more information, see the Accenture point of view Establish Command and Control in the Service Delivery Ecosystem. Execute differently In addition to using the global command center operating model, companies can implement specific service experience, customer segmentation or customer loyalty strategies and tactics to help produce results. Three options include: Leverage personalized, differentiated service strategies to better match customer experience with customer value. To help achieve this, companies need to develop a deep understanding of specific customer segment expectations and requirements according to the current and potential value of those segments; establish a central decision engine to help determine the next best action; and create differentiated offers for customers around their specific requirements. For more information, see the Accenture points of view Building a Differentiated Service Experience Strategy to Drive High Performance and From Contact to Consumption: A Strategic Approach to Customer Service Management. Take a more comprehensive and multidimensional approach to customer segmentation to match what customers value and what they are willing to pay a premium for. Introduce processes to help ensure that segmentation is turned into action to efficiently provide the right level of service to different customers. For more information, see the Accenture point of view Aligning Customer Segmentation with Industry Realities. Improve customer loyalty, preference and advocacy by giving customers more control over how they interact with a company. For example, allow them to configure their own experience by choosing the channels to obtain service, build relationships with specific service personnel over time, and decide what service options they expect to be offered. For more information, see the Accenture point of view Driving Growth through Customer Loyalty. When companies follow these four steps together, they can have an unparalleled opportunity to change the game, helping achieve a wide range of benefits and transforming the experience for customers in the process. 11

12 Contact Us To learn more about how Accenture can help you select, contract, manage and execute contact center vendor relationships, please visit or contact one of the authors: Dwayne Norton Andrew Boernke About Accenture Accenture is a global management consulting, technology services and outsourcing company, with approximately 266,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world s most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US$27.9 billion for the fiscal year ended Aug. 31, Its home page is About Sales & Customer Service (CRM) Sales & Customer Services (CRM) helps companies acquire, develop and retain more profitable customer relationships. We offer a broad range of innovative capabilities that address every aspect of the customer experience, including pricing strategy and profitability assessment, customer analytics, direct and indirect sales force execution, customer service, field support, customer contact operations, and retail/branch operations. We use these combinations of skills to help our clients accelerate growth, improve sales productivity and reduce customer-care costs helping increase the value of their customer relationships and enhancing the economic value of their brands. Copyright 2013 Accenture All rights reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture. This document is produced by consultants at Accenture as general guidance. It is not intended to provide specific advice on your circumstances. If you require advice or further details on any matters referred to, please contact your Accenture representative.

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