A New Definition of Workforce Management

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1 A New Definition of Workforce Management Ric Kosiba, Ph.D. Vice President Interactive Intelligence, Inc. Brian Spraetz Solutions Marketing Manager Interactive Intelligence, Inc.

2 Table of Contents Introduction... 3 What is Strategic Planning?... 3 Revisiting the Right, Right, Right Concept... 3 Two Facets of the WFM Gem... 4 Improving Strategic Planning Results... 5 Workforce Management is One Process with Two Critical Parts... 6 The Authors... 7 Copyright 2014 Interactive Intelligence, Inc. All rights reserved. Brand, product, and service names referred to in this document are the trademarks or registered trademarks of their respective companies. Interactive Intelligence, Inc Interactive Way Indianapolis, Indiana Telephone (800) Publish date 04/14, version Interactive Intelligence, Inc. 2 A New Definition of Workforce Management

3 Introduction When you ask people who are familiar with contact center operations What is workforce management? you get a pretty common response. Some people will focus on the capabilities and tell you It does forecasting and scheduling. They might even mention some more advanced features such as schedule adherence or intraday management. Others will recite catchy marketing tag lines. Getting the right people, in the right place, at the right time is a quite popular one. Answers like this describe what we call traditional workforce management. The increasingly complex service operations we deal with today demand a broader view of workforce management: a new one that fully embraces the concepts of strategic planning within the definition. Workforce management and strategic planning are not two separate processes or systems. They are two components that work together to solve a single problem in the contact center. What is Strategic Planning? If you re not familiar with strategic planning, do not feel left out as that is not uncommon. Every business does some type of strategic planning, although the methods used and results achieved vary widely. For the purpose of this discussion, strategic planning refers to the process of determining what staffing resources will be needed over a period of one, two, or more years, and developing a plan on how to get those resources in place. That s a deceptively simple definition though, as this is something that can be extremely hard to get right. Strategic planning is complicated because there are a lot of variables that need to be accounted for agent attrition, seasonal or other changes in contact volumes, unplanned shrinkage, new hire learning curves, handling time differences between centers or staffing groups are some of the big ones. Outcomes must also be predicted. These include key business performance metrics such as service level, occupancy, average speed of answer, abandonment, and others. Planning horizons extending over multiple years increase the complexity ever further. Accuracy is absolutely vital. If results predicted by a strategic planning system do not model the actual operation of the contact center accurately, the results will be flawed. Good strategic planning gives businesses a competitive edge by optimizing their labor costs, handling capacity, and service levels. Revisiting the Right, Right, Right Concept We want to get back to the right people, place, and time saying. An expanded version gives a better explanation of the workforce planning problem that service operations face. Success for a customer service operation is all about making sure the right number of employees are available, with the right skills, in the right place, at the right time in order to meet desired service goals Interactive Intelligence, Inc. 3 A New Definition of Workforce Management

4 Traditional workforce management systems focus on scheduling employees when and where they are needed, utilizing them effectively, and managing time-off and training efforts. These systems also help deal with the more than occasional turmoil that is the daily contact center operation. By tracking forecasted vs. actual results, traditional workforce management provides an early warning system to identify and facilitate responses to changes in demand or handling capacity. But traditional workforce management systems have a glaring Achilles heel, in that they re limited to managing the workforce already on staff. If a sufficient number of employees don t walk into the contact center on Monday morning, there is nothing traditional workforce management can do to make up the difference. That s where strategic planning plays a starring role in managing workforce performance. Two Facets of the WFM Gem The problem a comprehensive workforce management process must address is two faceted. There are short-term and long-term requirements that are inexorably tied together. In order to succeed, the contact center operation needs both the right number of employees available and the ability to use them effectively. Traditional workforce management optimizes the use of employees you have. Strategic planning ensures you have the optimal number of employees on staff. What happens if you have one part of this success formula, but not the other? If strategic planning is missing (or not done adequately), what is the result? In this case the contact center would be working in a highly reactive environment. One where understaffing or overstaffing is the norm, and where any significant changes in contact volumes are extremely disruptive. The workforce management process itself would be overstressed, scrambling for extra bodies or trying to send employees home. Customer service would be erratic and the customer experience less than desirable. Chaos reigns and money is wasted. What if the contact center had a good handle on strategic planning, but lacked a traditional workforce management system? The strategic planning system would determine exactly how many agents to staff each week, given the efficiency of the contact center. But the contact center would be running much less efficiently than possible. This is because employees are deployed and scheduled poorly, and likely more are hired than necessary to achieve performance goals. If a center outage, bad weather, or an unannounced marketing campaign causes disruption, the center cannot react quickly and effectively without good intraday management. Chaos reigns and money is wasted. To truly optimize contact center operations, both processes traditional workforce management and strategic planning must be in place and working effectively. More often than not, it is the strategic planning process that s missing or performed ineffectively Interactive Intelligence, Inc. 4 A New Definition of Workforce Management

5 Improving Strategic Planning Results Every contact center operation does strategic planning, sometimes referred to as capacity planning. This process focuses on longer-term decisions that a business needs to make, like hiring, vacation allocation, the timing and amount of agent training, and so forth. It is an absolute requirement for running a contact center, unless there is zero attrition or an unlimited, already-trained supply of labor. How specific organizations meet this need varies widely, along with the results. Many contact centers use home-grown spreadsheets to perform strategic planning. These spreadsheets are often complex and error prone. Iterations usually take a long time and effort to perform. This severely hampers the ability to explore different what if scenarios to fully examine the options for strategic goals like customer experience, operating costs, and revenue. In many cases spreadsheet models are not validated, resulting in inaccurate forecasts. This then creates staffing plans that are inefficient, and results in significant mismatches between staff required and staff provided to the organization along with the associated operational problems that creates. There are terrific systems available to improve strategic planning. The best of these offer the following capabilities: Data capture and storage: ACD, dialer, workforce management, payroll, and other data sources are needed to calibrate and ensure accuracy of the forecasting and operational simulation models. This data also provides variance ( actual versus planned ) reporting and assists with general purpose contact center reporting needs. Forecasting: Contact volumes, sick time and other shrinkage metrics, handle times, attrition rates, and other key metrics should be forecasted at a detailed level, such as contact center and staff group. Multiple forecasting methods ensure that that the method fits the data being forecast. One size fits all models often use compromises that introduce significant error. Performance prediction and requirements generation: This predicts interdependencies between the key operational metrics like contact volume, staffing levels, handling time, service level, abandons, contacts handled, and occupancy. The best systems use discrete event simulation techniques instead of Erlang C to accurately handle multiskill, multichannel, and multisite environments. Staff planning optimization: Simulation models develop week over week required staffing levels, but do not create an actual plan. Optimization models, like integer programming, both automate and optimize this process and create just in time hiring and overtime plans that achieve service goals at least cost. This provides an efficient plan that still considers the real world constraints and is a huge source of ROI. Variance analysis and budgeting: This brings the strategic planning process full circle. Variance analysis monitors the execution of the plan developed by the other components, and serves as the proverbial canary in the coal mine. If plan results vary from forecasts, operational changes might be needed. Variance analysis detects when unforeseen changes happen, giving executive lead time to react before it s too late. When all of these components are brought together and automated, strategic planning becomes a much quicker and much more effective process. This provides contact center organizations a powerful, new class of business performance and planning analytics Interactive Intelligence, Inc. 5 A New Definition of Workforce Management

6 Workforce Management is One Process with Two Critical Parts Most of us probably understand that it is important to have good long-term staffing plans so that, in the short term, the contact center operation runs smoothly and is easier to manage. Traditional workforce management focuses tightly on short-term execution and planning. It does not adequately determine the week-over-week staffing requirements needed to successfully achieve service goals. Strategic planning focuses on determining those week-over-week requirements and managing the impact of variability in contact volumes, handle times, vacations, sick time, agent attrition, and other key performance influencers. Managing workforce performance in the contact center is a larger process than traditionally viewed. One that requires both short-term and long-term planning to successfully optimize results and meet customer experience and other operational goals Interactive Intelligence, Inc. 6 A New Definition of Workforce Management

7 The Authors Ric Kosiba is an expert in the field of call center management and modeling, call center strategy development, and the optimization of large-scale operational processes. He received a Ph. D in Operations Research and Engineering from Purdue University and an M.S.C.E. and B.S.C.E. from Purdue s School of Civil Engineering. He also has obtained a patent on the application of optimal collection strategies to delinquent portfolios in addition to a patent on the application of simulation and analytics to contact center planning. At the start of his career, Ric served as Manager of Customer Service Analytics for USAir s Operations Research Division, and as Operations Management Senior Analyst with Northwest Airlines. Later, he moved into Customer Support at First USA, where he served as Vice President of Operations Research and guided all facets of the company s call center process improvement, including collections strategy modeling and detailed staff plan development and call center budgeting. Ric then held a position as the Director of Management Science at Partners First, where his responsibilities included the detailed modeling of portfolio risks, in addition to predictive and prescriptive marketing and operations engineering. Ric ultimately founded Bay Bridge Decisions, which later joined Interactive Intelligence, and now serves as Interactive s Vice President in the strategic planning market. He continues to write for numerous contact center publications and speaks at highly acclaimed technical and contact center forums on a frequent basis. Contact him at: or Brian Spraetz has been helping service organizations perform at peak levels and deliver loyalty-winning experiences to their customers for more than 18 years. With expertise crossing the full range of workforce optimization solutions, Brian provides unique perspectives and valuable insights on using technology effectively to gain operational and competitive advantages. Brian received his B.S.E.E. degree from Southern Methodist University and M.B.A. degree from the University of Texas in Dallas Interactive Intelligence, Inc. 7 A New Definition of Workforce Management

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