INSIGHT. Arise Virtual Solutions: Using Flexible Staffing to Drive Business Outcomes in the Contact Center IDC OPINION IN THIS INSIGHT

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1 INSIGHT Arise Virtual Solutions: Using Flexible Staffing to Drive Business Outcomes in the Contact Center Melissa O'Brien IDC OPINION Global Headquarters: 5 Speen Street Framingham, MA USA P F Arise Virtual Solutions has carefully honed and optimized the home-based agent model and workforce management tools to make the most of the advantages this model has to offer. In detail: Customer care BPO providers are constantly challenged to be more creative and proactive in meeting the demands for flexibility from clients. While there are some spikes and dips in call volumes that can be anticipated and planned for, volumes will inevitably vary because of seasonal factors, natural disasters, and other dynamics that are sometimes unexplained. Dealing with this is a challenge of cost and efficiency for all contact center operators because of the downtime that dips in call volumes create. The home-based agent model in itself helps address this need for flexibility by the nature of its scheduling processes and access to a geographically dispersed staff. Most staff are scheduled in shorter increments of shift lengths, are part-time workers that don't rely on a 40-hour workweek, and are not challenged with commuting factors, thus enabling greater flexibility than the traditional shifts of the brick-and-mortar employment model. IN THIS INSIGHT This IDC Insight includes IDC's observations of Arise Virtual Solutions' business model as it relates to client demand for seasonality and flexibility. SITUATION OVERVIEW The home-based agent model is one of the fastest-growing delivery models for customer care BPO services. There are many benefits and opportunities driving this delivery trend, but one of the greatest is the flexibility that the home agent model provides. Four components of this flexibility are the use of part-time agents, the level of turnover of agents (reportedly lower by most counts in home-based agent programs), ramp-up time, and lower cost to ramp for both the BPO and the respective client. These four factors are key elements that buyers find attractive in the home agent model. IDC's research has shown that the turnover of agents and the time it takes to ramp up a home-based agent engagement are of great importance to buyers of customer care services. Both of these issues significantly impact the ability of a Filing Information: June 2013, IDC #241312, Volume: 1 Worldwide Customer Care BPO Services: Insight

2 customer care provider to flex up and down easily to address changes in call volumes. Figure 1 shows data from a demand-side survey of customer care decision makers indicating that the vast majority of customer care decision makers feel that homebased agent turnover is moderately to very important. FIGURE 1 Home Agent Turnover Source: IDC, 2012 Customer care decision makers also indicated that ramp-up time is a significant factor in evaluating a home-based agent program. Figure 2 illustrates that nearly half of customer care decision makers are expecting a ramp-up time between one and four months, and approximately one-quarter of the respondents expect a ramp-up between one week and one month. The Arise Virtual Solutions section discusses how Arise Virtual Solutions has used low agent turnover and quick ramp-up times fueled by a unique staffing model that utilizes a diverse pool of independent contractors and the respective overindexing of the number of agents certified on a client program coupled with a scheduling model and other key factors to grow a pure-play home-based agent customer care BPO business. 2 # IDC

3 FIGURE 2 Home Agent Ramp- Up Source: IDC, 2012 Arise Virtual Solutions Arise Virtual Solutions, headquartered in Mirimar, Florida, is a customer care BPO company utilizing the home-based agent model exclusively. Arise uses a part-time independent business contractor (IBC) model for its home-based agents, which means that each independent contractor is required to individually incorporate as a business. Arise maintains that the IBC model drives better quality of service, as the people who are drawn to the IBC model are typically more motivated and entrepreneurial. The reportedly lower turnover of these IBCs is an important differentiator. In addition, the contractors do not work set schedules, which provides Arise the additional benefit of flexing up or down during the spikes and dips in call volume. The virtual sourcing and recruiting process coupled with Arise's elearning platform is designed to facilitate a faster and more efficient onboarding process, thus contributing to the model's overall flexibility to onboard and have independent contractors on the phone quicker. Furthermore, through the use of this home-based agent model, along with its proprietary scheduling tool, Arise Virtual Solutions is able to efficiently address the difficulties inherent in contact center scheduling. Starmatic Workforce Management Arise leverages Starmatic, a patented online workforce management tool. While most brick-and-mortar contact centers schedule in 4- or 8-hour shifts, the Arise scheduling system allows for scheduling in 30-minute intervals. Starmatic uses actual call patterns to flex rapidly, recruiting CSRs as needed when a nonforecast event occurs. Arise can respond with a 30% increase in service support through urgent service offering within minutes of an announcement of a need for additional staff. Arise 2013 IDC #

4 reports that its staffing model promotes 60 70% cost savings because of decreased downtime and less waste. Starmatic Mobile Scheduling Arise is launching a mobile application for Starmatic (scheduled to be released in June or July 2013). Currently only available for the iphone, it incorporates most of the functionality of the Web-based version of the scheduling tool. Arise plans to expand this application to the Android operating system in the near future. The Starmatic mobile application gives the IBO/CSP the ability to see an urgent service request and schedule themselves from anywhere with their mobile devices. Arise assumes that approximately 45% of its workforce will utilize the application. Case Studies In addition to providing flexible and efficient staffing, Arise has also increased overall customer satisfaction by more than three points year over year. Some examples of how the flexibility techniques of Arise impacted its clients' businesses are: Seasonal ramp. A leading provider of tax and financial management software needed to flex more than 600% of its off-season forecast monthly call volume while maintaining the same levels of quality, accuracy, and Net Promoter Score. Arise's screening and onboarding process enabled the company to certify and put into production over 1,100 new agents in less than one month. That same pool of part-time independent contractors flexed another 37% over the volume forecast while maintaining the position number (over 9.3 percentage points better) in Net Promoter Score when compared with that of their competitors. Natural disaster/weather impacts. In an event where a client in the Fortune 150 experienced a tornado that shut down its entire call center, Arise ramped within four hours to cover 200 seats and continued coverage for two weeks. Agents working for independent businesses in the Arise network flexed for the entire period, with no interruption to customers during the crisis support. The flex was 135%, and Arise single-handedly covered 95%+ of the hours gap for the workforce each day that week. Holiday peak. A leading U.S. retailer asked Arise to handle significant ramps in its holiday call volume. Handling this volume internally would have necessitated a 3-times flex of its internal contact center resources for a three-month period (November, December, and January). In less than six weeks, Arise designed and developed an elearning-based training course, deployed waves of supplemental support in groups of 100 people, and delivered through its network of independent businesses, 500 proficient agents. Arise exceeded service-level expectations and operational performance results during this period, and the client has since doubled its steady-state volume with Arise. At-scale ramp. Arise assisted a Canadian diversified communications and media company with quickly meeting significant demand for consumer wireless customer service, sales, and basic technical assistance. The Arise network tapped the latent labor supply across Canada, and virtual certification and 4 # IDC

5 implementation practices enabled Arise to ramp rapidly, at scale. As a result, Arise successfully increased the number of full-time equivalents supporting the client's application by 4.2 times over the course of six months. Additionally, Arise maintained an 18 43%+ interval flex over forecast each day. FUTURE OUTLOOK Arise has developed some innovative ways to address the growing demand for scheduling flexibility. The Starmatic scheduling tool is the lynchpin of this flexible model, yet it is the network of IBC/CSRs that truly differentiates Arise from its competitors. Arise should consider the following: Expand and increase adoption of Starmatic mobile. While the application has not yet been released, Arise predicts that about 45% of the network will use this tool. CSRs will likely find the mobile tool greatly advantageous and yet another way to make working with Arise a more seamless part of their lives. The ability to schedule while not at home will allow for more shifts to be picked up, in particular as urgent call demands arise, which will translate to even better flexible service for clients. As such, Arise should heavily promote the use of this application by way of internal communication and promotion. At the time of publishing this document, Arise was working on testing Starmatic for Android. It will be beneficial for Arise to continue to expand the use of Starmatic for other operating systems to increase adoption and usage of the application. Leverage the urgent service offering. Urgent service alerts through the Starmatic system are an important way that communication around unexpected demand is administered. Creating push notifications for urgent service alerts on the mobile application would be another way to ensure that agents are aware of these requests and better service clients. Promote the IBC model. Arise's part-time independent business contractor model is not well understood in a home-based agent market that primarily relies on employee staffing and 1,099 contractors. The independent business contractor network is Arise's most unique feature, and a feature that seems to afford many benefits, and Arise should continue to cultivate and nurture the messaging around this, in particular as the model works well to promote flexible staffing best practices IDC #

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