Virtual Contact Centers and Homeshoring Driving the Benefits Home

Transcription

1 Interaction Intelligence Virtual Contact Centers and Homeshoring An Exony Business White Paper May 2007 Exony Limited 2007

2 Opening new doors Introduction Today s Virtual Contact Centers (VCCs) face many challenges. From cutting costs and managing capacity to dealing with recruitment problems, VCCs must also deliver a quality service that satisfies growing demands for Corporate and Social Responsibility (CSR). 01 Homeshoring: the transfer of service industry employment from offices to home-based employees with appropriate telephone and internet facilities. Macmillan English Dictionary Finding appropriate solutions for these challenges can prove difficult. Businesses often confront a dilemma on whether to tackle the problems in-house, outsource to other providers or place their operations offshore. Each demands careful scrutiny and analyses. Within this White Paper, we will examine the opportunities and challenges presented by one increasingly popular option for VCCs: homeshoring. The trend towards homeshoring started in the late 1990s when agents began working from studies, bedrooms and kitchen tables across the US. Since then, the home-based model has gained momentum, proving a popular solution for companies wishing to establish quality, cost-effective transactions with their customers. For example, in the US, JetBlue Airways is just one of a growing number of homeshoring practitioners, with all of its 1,400 reservation agents working from home. Currently, there are an estimated 112,000 US home-based agents, which is predicted to rise to 330,000 by 2010 (source: IDC), equating to almost 11% of US contact centre agents. Enterprises are finding that homeshoring attracts experienced, educated and reliable agents to their operations. For many, the results have seen enhanced service quality, improved staff retention, increased sales and conversions, and higher first-call resolution. Furthermore, homeshoring s inherent flexibility has allowed organizations to meet increasing economic and CSR demands. With suitable computer, internet access and telephone equipment, previously disenfranchised groups who are unable or unwilling to work in office environments, have found rewarding employment with homeshoring VCC operators. Working in shifts lasting as little as 15 minutes and without incurring overheads, homeshoring also offers VCCs compelling cost savings. According to IDC, a contact center worker costs $31 an hour, including overheads and training, while a home-based agent costs just $21. This equates to an overall saving of 32%. Further analysis performed at Exony suggests that typical agent cost-savings could in fact range between 28% and 41%. The benefits for homeworkers appear equally attractive. Free from costly and time-consuming constraints of commuting, home-based agents enjoy flexible working arrangements without travel costs. So far, the increasing success of homeshoring in the US has not been replicated elsewhere. By way of example there are now 6,000 contact centers in the UK employing more than one million people (source: CCA), yet the number of enterprises currently using the homeshoring approach is low. Reasons for this low uptake in countries other than the US are complex and manifold. Prevailing concerns regarding security, employee management and monitoring partly explain the reticence. Cultural aspects might also play a role, with US enterprises typically more willing to trial new initiatives and overcome management issues. US contact centers also generally promote the benefits of self-employment to potential home-based agents. However, this enthusiasm is normally not shared by agents in the other countries, who tend to value the perceived security of full enterprise employment and office-based environments. This White Paper examines the potential benefits of homeshoring and the perceived barriers to adoption. In the following section, the paper considers the model s economic, cultural, social, environmental and technical issues, while the final chapter deals with current concerns surrounding homeshoring.

3 Unlocking the opportunities The issues and benefits of homeshoring Economic When assessing new business practices, cost is a fundamental issue for VCC operators. According to Gartner Dataquest, 70% of contact center costs are personnel related. In this respect, the advantages of homeshoring are clear. Employing home-based agents immediately reduces such typical office overheads as space, furniture, heating, light and parking. Table 1: Cost savings from homeshoring Hard Cost Savings Office space Office utilities, equipment, etc. Annual cost savings as % of employee costs 7.4% 5.0% Cumulative annual cost savings as % of employee costs Total 12.4% 12.4% Additional Observed Cost Savings (Based on US Operational Experience) Agent churn reduction Training time reduction Ramp-up time improvements 7.9% 1.8% 2.6% Total 12.3% 27.7% Additional Cost Benefits from Flexible Rostering 1 Rostering to the half-hour increment 15.9% 40.6% Note 1 : The scale of this particular benefit is highly dependent on the variation of intra-day call volumes. Source: See Appendix 1 for details of the above calculations However, the cost advantages exceed the immediate impact on balance sheets. Home-based agents benefit from flexible arrangements, often working at times to suit their lifestyles. Their home setting also frees them from commuting costs, such as public transport, gasoline and vehicle depreciation. It therefore becomes reasonable for enterprises to negotiate new homeworker contracts, perhaps recognizing their increased flexibility and lower expenses through a reduced hourly rate. While enterprises usually pay office-based agents for time spent on site, instead, they may pay homeworkers for time actually spent working. In the contact center industry, 30-50% a year agent attrition rates are typical, rising to over 100% in some areas. This has serious financial implications while often exhausting local resource. Recruiting and training costs for a new agent can exceed $7,000 (source: CCA) and reach $20,000. It may also involve four to six weeks of training to ensure an agent is ready to take calls. We reduce staff churn by offering flexible home working to, for example, new mothers returning to work part-time, or older people looking to reduce their hours but not yet ready to retire. In the travel industry, an effective home working center means that you keep valuable knowledge and experience within the company. Peter Healey Technical Director of Co-Op Future Travel March 2006 Homeshoring can reduce these issues significantly while offering access to a new large pool of resource. In the US, homeworkers convenient working arrangements have increased loyalty, resulting in agent churn typically less than 10% a year. In addition, the comparative experience and quality of homeworkers can reduce training times and costs. Table 2: Additional economic benefits from homeshoring Empirically Observed Increases in Revenue Average order size Sales per agent 10-20% increase Up to 25% higher Increases in sales conversion rates and average order sizes Empirically Observed Increases in Customer Satisfaction Customer Satisfaction rate First Call Resolution 40% improvement 6% increase Better service scores and higher first-call resolution Source Alpine Access Business Week Jan 2006 Contact CenterWorld Feb 2007 Source Willow CSN Jan 2006 Working Solutions Alpine Access 02

4 Each sector seeks rewarding and flexible work that fits with their lifestyle. Homeshoring meets these demands, offering a new sense of purpose and the ability to earn an income without any of the usual cost and time constraints of working in an office. We have a small home-working pilot of 10 people running. Lots of people would like interesting employment but do not want to drive into the city. It could be very enriching for a lot of rural communities. A lot of retired people would like to work for a couple of hours per day. Chey Garland Chief Executive, Garlands Contact Centers November 2006 Homeshoring also offers flexible resources for meeting fluctuating demand. While it is not cost-effective for agents to make a commute for just one or two hours of work, home-based agents are perfectly placed to provide immediate support. This also enhances the enterprise s resilience and business continuity arrangements, with site-based problems rarely affecting homeworkers. Cultural There are profound differences between the demographics of office-based and homeworking agents. According to US homeshoring company, LiveOps, a traditional agent is usually a transient teenager, and lacks previous sales experience. Conversely, home-based agents are mature, educated and qualified individuals with many years experience in customer services. Table 3: US Typical home agent profile Average Age Work experience 15 years College education 80%+ Source: LiveOps, Alpine Access, VIPdesk, Exony analysis A variety of groups are ideally suited to working from home, such as females returning to work, the disabled, over-fifties, and current or previous employees who are unable to work in an office. From individuals who cannot commute and people with a few hours a day to spare, to those simply wishing to avoid office environments, homeworking provides an ideal solution. For example, people from the over-fifties sector are often more stable, motivated and service-orientated, possessing customer-relationship skills that can be used to great effect within a VCC. However, such individuals generally find the youthful, target-driven environment of office based contact centers off-putting. Homeshoring affords VCC enterprises the opportunity to benefit from these sought-after skills within a working arrangement that satisfies both parties. Although certain sectors of the community are particularly suited to homeshoring, moving office-based workers to a homeworking environment is often unsuccessful, as UK motoring organization, the AA, discovered. As young individuals typically without their own home, office-based agents can lack the necessary motivation while desiring the social inclusion benefits of a group environment. Social While homeshoring provides agents with newfound opportunities to balance work with their lives, the model also complements society s increasing efforts to improve CSR. Today s many CSR initiatives focus on encouraging such areas as back to work policies, cultural diversity, inclusion, adult learning and rural regeneration. Homeshoring supports these drives by offering employment to social groups that might once have been excluded by such circumstances as age, disability and location. More than ever, it is vital that enterprises demonstrate non-discriminatory working practices and promote equal opportunities, which can involve supporting the economies of particular regions and communities. For example, a VCC might provide homeshoring opportunities in a region in preference to selecting an offshore contact center solution. Furthermore, homeshoring allows enterprises to employ the untapped skills of the mature and elderly, disabled people, mothers, carers and individuals living in areas of high unemployment. Across the globe, tens of millions from these groups are keen to return to work but discouraged by difficulties in finding suitable and worthwhile employment. For example, in the US alone, there are between 40 and 50 million people (1 in 7 of the population) with some kind of disability (source: Institute of Medicine). Research has also revealed that disabled people are among society s most productive workers, possessing quality customer service skills and exceptional motivation. As an inclusive model, homeshoring can embrace the talents of these individuals and other previously overlooked areas of the community. 03

5 Environmental With green issues remaining high on the corporate agenda, the benefits of homeshoring are equally convincing. There are currently over 6.5 million contact center agents working globally (source: Datamonitor). Assuming a 10 mile one-way commute and a small family car, these agents produce over nine million tonnes of CO 2 a year (source: carbonfootprint. com). Homeworkers simply do not need to commute, thereby substantially reducing CO 2 emissions. 04 Traffic congestion is also an increasing global problem. Among its many negative effects, traffic congestion contributes to pollution, diminished regional economic activity, delayed emergency services, motorist stress and frustration, and vehicle wear-and-tear, while harming quality of life for people living in urban areas. An estimated 6.5 million commuting agents make 13 million car journeys a day, or over 3 billion journeys a year. With commute-free working a natural consequence of homeshoring, its environmental, social and health benefits may be vast. Technical The development of contact centers over the last twenty years has mirrored advancements in telecommunications. Private Branch Exchange (PBX), Automatic Call Distribution (ACD) and Interactive Voice Response (IVR) have each allowed contact centers to distribute and manage calls between large groups of people. However, as ACD required agents to be situated close to the technologies, enterprises built contact centers to bring large numbers of staff together under one roof. For the first wave of home-based agents, delivered in the US by companies such as LiveOps and Alpine Access, a data connection has been combined with a separate, standard TDM phone line to enable agents to work effectively from home. Thanks to relatively recent technological developments, such as VOIP QoS (Voice-Over- Internet Protocol Quality-of-Service), separate lines for data/ internet and phone are no longer required. Virtualized contact centers using internet protocol (IP) delivered over a broadband connection allow agents to handle calls from their homes using VOIP, and to also obtain high-speed access to enterprises core applications over the same connection. Working together, these technologies have allowed VCCs to connect their home-based agents and customers in new and innovative ways. Today, VCCs can match agents skills, languages, and even regional dialects, with incoming customer calls. For example, if an enterprise s service requires particular expertise or language skills, homeshoring can distribute calls to the ideal home-based agent. The sheer flexibility of Virtual Contact Centers is driving tremendous growth in the market. Organizations can now seamlessly integrate multiple resources, including the underutilized skills and experience of homeworkers, to improve customer service quality. Key to reaping these benefits will be the ability to manage and control VCCs on a global basis, in real-time so that they deliver against business priorities. Ken Landoline Contact Center Expert and Senior Analyst, Yankee Group, November 2006 There is currently a wide selection of solutions available for measuring and monitoring home-based agents, including reports, call recording, web cams, call and keystroke recording, and real-time agent monitoring. Each technology allows VCC operators to supervise round-the-clock, enhance security measures, and optimize resource allocation as easily as if the agents were working in an office. Tried and tested technologies also exist for the overall security of home-based working. These include secure Virtual Private Networks (VPNs), dedicated PCs, Virtual Machine software, encrypted password access, firewalls, virus checkers and many more. Implemented rigorously and consistently throughout a homeshoring workforce, each solution can help ensure the enterprise never falls prey to computer-based security breaches. In the US, agents are typically responsible for procuring the technologies required to work from home, while in the UK, enterprises usually provide individuals with the necessary equipment. Wherever agents source their tools, they also require security technologies that allow them to utilize the systems and processes available to in-house contact centers.

6 Breaking the barriers to homeshoring Current industry concerns Despite the ever-growing popularity of homeshoring, a number of barriers to adoption remain. Enterprises have traditionally operated contact centers within an office setting, allowing physical monitoring of workers. However, the dispersed nature of homeworking frequently raises concerns regarding security and agent management. This section considers the perceived barriers and current solutions to the concerns. Putting security first Unease regarding security remains a major obstacle for enterprises and VCC operators. However, the issue depends largely on the nature of the services in question. For example, information-based services, such as directory enquiries, should cause few problems within a homeshoring environment. Yet even in sectors prompting most alarm, such as financial services, some offerings may pose minimal risks, including insurance purchasing and mortgage enquiries. Naturally, some enterprises will feel more comfortable operating certain financial transactions within a highly secure contact center environment. In reality, security risks exist everywhere. While operators may believe they have performed every necessary security check, it is still possible for office based agents to obtain critical data and defraud organizations individually or under duress by criminal gangs. For homeworkers and their employers, these risks are no different. So while in-house contact center managers background-check employees, VCC operators can employ the same rigorous vetting procedures for workers and family members. What s more, current technologies also allow managers to perform robust, real-time monitoring of home-based agents. Finding the right space Home-based agents require the right systems, technologies and working space to perform their roles professionally and securely. However, for some groups of people, especially the economically disadvantaged, procuring the necessary infrastructure and environment can be difficult. Community Contact Centers (CCCs) are viable solutions to these problems. Comprising a small community building with space and contact center equipment, the centers are typically located within walking distance of the target workers homes. As halfway-houses, CCCs also allow enterprises to establish quality regional operations without investing heavily in offices/real estate & car parks. For example, as part of a UK government initiative, Nottingham-based businesses with significant contact center operations such as e-on, CapitalOne, Experian and Boots, have been reported as seriously considering extending their contact centers with a mix of homeworkers and CCCs. This approach has already generated a lot of interest from the press as a route to enable increased employment opportunities for specific regional communities, and as a way for large companies to fulfill some of their requirements for diversity in their workforces. As a result, a number of other towns and cities in the UK are now considering similar projects. With any new business model there will always be pioneers, the early adopters companies that are willing to pilot and try new concepts. People see that those innovators are actually getting good results from the trials and tests, then there are a lot of fast followers; we re at the fast-follower stage now. This model is not unproven. It s a legitimate alternative in the portfolio strategy a client might be considering for how he provides customer contact solutions. Angie Selden CEO, Arise/WillowCSN February 2007 The Nottingham example also highlights another interesting trend: the creation of partnerships between interested parties to bring all the necessary elements together. In this particular case, it is a partnership between the local government departments with both Cisco Systems (as the provider of the enabling Virtual Contact Center infrastructure) and with UK Virtual Call Centres (as the provider and manager of the home and CCC-based agents). Exony believes that CCCs may, in some markets, be the way that many organizations test out extending their contact centers, before fully embracing a true home-based agent model. Building agent teams While a variety of group dynamics, such as team building exercises, are easily employed in a contact center establishment, many enterprises perceive this is simply not achievable for homeworkers. However, geographical groupings of home-based agents put these advantages within easy reach. With home-based agents situated in the same town or area, VCC managers can arrange regular meetings, home visits and social events aimed at increasing morale, efficiency and quality. Web chat technologies can also help build teams by providing a virtualized alternative to office communications. 05

7 Homeshoring is a great way for organizations to access a new, life-skilled labor pool, whilst really embracing diversity, including increased employment opportunities for the disabled and others who cannot easily travel to a place of work. Contact centers in many areas have run out of good quality people, but there s real talent out there. Homeshoring of agents is proven to be a very cost-effective way to tap in to those new labour pools. Andrew Candlish Cisco Systems April 2007 Putting plans in place There are other issues for enterprises to consider. Before embarking on a homeshoring model, VCC operators should clarify the potential health and safety issues of homeworking in their specific countries. It is also vital that managers establish comprehensive work-at-home contracts and policies clarifying the obligations and expectations of both the employer and home-based agent. While these tasks may seem daunting, there are many specialist agencies that can help enterprises put their homeshoring plans in place. Measuring and managing agents The perceived inability to measure, manage and monitor home-based agents is a prime concern for many enterprises. However, technologies now exist that can help VCC operators gain full control of their homeshoring model. One such solution is the Exony Virtualized Interaction Manager (VIM): a software application that offers real-time ability to measure and manage the VCC and its homeworkers. With VIM Reporting and Analytics, VCC operators can employ real-time monitoring and access historical reports on all agent and customer interactions. The information is available onscreen and segmented into selected groupings, such as call numbers, queues, business unit, legal entity, business line, brand, location, contact center, operator, or any other aspect of the VCC. VIM Resource Management also allows managers to instantly meet the VCC s complex and changing demands. Managers can move, add and change both office and home-based resources to match fluctuating demand across call queues, brands and product lines. Pressing home your advantage In recent years, the advent of IP solutions and broadband has opened the door to homeworkers securing gainful employment with VCC operators. As this paper shows, homeshoring is set for rapid growth within the contact center industry. The model is proving attractive as it meets a host of issues and needs, from the economic and quality targets of VCCs and cultural demands of agents, to helping enterprises satisfy their social and environmental responsibilities. Despite its growing popularity, many remain concerned about introducing homeshoring into their organizations. However, with reliable monitoring and security technologies now available, enterprises can measure and manage home-based agents with the same diligence as seen in office settings. Furthermore, there are a variety of processes and working practices that can ensure home-based workers enjoy the same opportunities and sense of belonging as in-house agents. Homeshoring has come of age. It is no longer an untried and untested working model. As current proponents continue to reveal its positive results and outcomes, enterprises will increasingly adopt homeshoring as a core component of their contact center strategies. That is why, at Exony, we are in no doubt: homeshoring is here to prosper for both enterprises and agents. Exony Virtualized Interaction Manager allows enterprises to: measure and manage the VCC and home-based agents, according to business roles and accountability identify issues, improve efficiency and enhance customer experience through VIM Reporting and Analytics and VIM Resource Management perform immediate tactical improvements or plan strategic change programs deliver consistent customer operations through a seamless VCC measure and manage real-time performance of home-based agents and quality of third-party service providers, for example, outsourcers increase customer and agent satisfaction through improved first call resolution enhance business responsiveness and agility, free from dependency on centralized and remote administration resources reduce costs through efficient use of home-based agents and contact channels, and better matching of resource to demand implement disaster management and business continuity through skilled home-based agents 06

8 Appendix 1 Details of cost savings calculations Base cost per agent Annual salary Annual agent churn 50% Recruitment cost Initial training Ramp-up to full productivity Effective annualized base cost Source: Industry Reports, Exony Analysis Hard cost savings Office space per agent Office Cost per Sq Metre $200 $20,000 per agent $2,000 per agent 0.5 Months 1.5 Months $27,198 per agent 10 Sq Metres Office cost per agent $2,000 Office space cost saved 7.4% Additional office related costs saved Source: Industry Reports, Exony Analysis Additional observed cost savings Based on US Operational Experience 5.0% Annual agent churn 10% Reduction in training time 25% Reduction in ramp-up time 25% Appendix 2 Enterprises using home agents US Flowers AAA Roadside Assistance AIG ATX Group Citigroup Citizen Communications Company Singular ExpressJet Finland Post General Electric Global Crossing Holland America Cruise Lines J. Crew JetBlue Airways Kodak Land Rover MasterCard McKesson Office Depot Park University Putnam Security ShopNBC St Paul Travelers /Traveler s Insurance The Visiting Nurse Service of New York US Internal Revenue Service Verizon Vermont Teddy Bear Co. Virgin Atlantic Walgreens Wyndham Hotel Appendix 3 Major home agent provider companies: US Alpine Access Arise Virtual Solutions (formerly Willow CSN) Convergys LiveOps VIPDesk Work At Home Agent/ West at Home Working Solutions UK UK Virtual Call Centres 07 Source: LiveOps, TeamPhone, Working Solutions Additional cost benefits from Flexible Rostering Required staff with 8-hour shifts Required staff with half-hour rosters Savings 1280 Hours 1076 hours 204 hours UK Co-Op Future Travel James Villas Holiday Discount Centre The AA Travel Counsellors Canada Voxcom Savings from 8-hour shift 15.9% Source: Accenture/MRI Montgomery Research, March 2006 Japan Jupiter Shop Channel

9 About Exony Exony is the world s leading provider of interaction management software for virtualized customer contact operations. As the first company to develop technologies that ensure VCCs meet expectations of enhanced efficiency, flexibility, management and service, Exony understands the unique challenges facing operators and managers of Virtual Contact Centers (VCCs). Acknowledgments With many thanks to all the contributors who helped produce this paper, including and especially: Exony s offerings, including Exony Virtualized Interaction Manager (VIM), provide organizations with comprehensive partitioning, security, connectivity, data gathering, reporting, analytics, and resource and service management solutions. Working together, each offering ensures enterprises can save costs, improve working practices and deliver consistently exceptional service. With offices in Boston, Massachusetts, USA and Newbury near London in the UK, Exony aims to help organizations gain maximum benefits from their VCCs, while lifting their services to new levels of excellence. Andrew Candlish Cisco Systems Stuart Bowden UK Virtual Call Centres Make contact To find out more about Exony s approach to homeshoring and Virtual Contact Centers please contact: North America Exony Inc 60 State Street Suite 700 Boston MA USA telephone info@exony.com Europe Exony Limited Benham Valence Newbury Berkshire RG20 8LU UK telephone +44 (0) info@exony.com