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

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

2 How do you manage your preferred contact center vendors? Do you empower them with the strategic directive, operational framework and tactical plans to be your company s ambassadors ones that can deliver a consistent experience to customers?

In this consumer-driven world, companies must deliver a consistent and orchestrated customer experience to maintain competiveness and reach high performance. Every change can mean the difference between keeping customers happy or losing them to rivals. For companies that outsource customer care to contact center vendors, one powerful way to ensure consistency is to build strategic relationships with a preferred set of vendors essentially helping each one to operate as if it was an extension of the business. Crafting these strategic relationships requires more than a quick fix, however; it requires changing the vendor management game by selecting, contracting, managing and executing with vendors differently. (See sidebar on Accenture Vendor Management Framework.) The third step in creating strategic relationships, and the focus of this point of view, is managing vendors differently. There are a number of reasons why is it important to take a different approach to vendor management. For starters, when companies choose to outsource, they are entrusting their vendors with direct contact with their most precious asset: their customers. While not co-employees, vendors are still the face of the company and first point of contact for personto-person interactions. Therefore, it is critical for companies to support vendors in providing the desired customer experience. Unfortunately, the traditional hands-off management approach to outsourcing (i.e., subordinated vendors, vendors of choice) is deficient in equipping vendors to deliver a consistent and branded customer experience via these phone interactions. Instead, Accenture recommends that companies build collaborative and transparent relationships with their selected contact center vendors, using the vendor management model that is appropriate for the organization. Managing differently is more than a stylistic change; it signifies a new way for companies and their contact center vendors to work together on delivering the customer experience objectives. Managing differently also requires full engagement from both sides starting with the C-suite to set the strategy; cascading through the VPs and direct reports to guide the operations; and culminating with the vendor managers who liaise with their vendor counterparts to support tactics at the site level. Through the process, companies and their vendors collaborate at all levels to solve problems, share leading practices, drive innovation and identify continuous ways to improve. Ultimately, these strategic relationships contribute to bottom line performance outcomes, including increased customer satisfaction, improved first contact resolution and reduced cost to serve. In order to manage differently, companies must take a few important steps to examine their internal organization and make sure that their vendor management ecosystem, vendor management model, internal governance structure, and vendor manager roles and responsibilities are optimized. The following elaborates on these steps and provides a roadmap for how companies can empower their vendors to become better frontline ambassadors to customers. 3

Accenture Vendor Management Framework: Select, Contract, Manage and Execute Differently On the route to high performance, companies have a game-changing opportunity to cultivate collaborative and transparent relationships with their contact center vendors. The four-step process requires companies to do things differently: select the appropriate vendors, contract for outcomes, manage them effectively and execute correctly for results (see Figure 1). Managing differently, in conjunction with the other three aspects of the Accenture Vendor Management Framework, is a critical step in building strategic relationships a step that can amplify the benefits for companies, vendors and customers alike. For more information about selecting vendors differently, see the Accenture point of view, Want to Change the Game with Contact Center Vendors? Select Them Differently. Figure 1: 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 Source: Accenture LLP 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 Hourly/daily/monthly opportunity to gain/lose volume 4

Evaluate the Vendor Management Ecosystem The first step is for companies to think systemically and evaluate the maturity of their vendor management ecosystem. This ecosystem can be defined as all of the internal and external capabilities (strategy, people, processes and technologies) involved in or responsible for some part of the success of serving customers. Clearly, every company will have its own set of requirements for a vendor management ecosystem; however, we recommend it includes: Leadership team or steering committee. Vendor management model that fits the business and culture. Engagement from appropriate areas of the business. Shared services (performance management, training, reporting). Outsourced contact center vendor sites. Given the various entities, the ecosystem functions as an interdependent macrocosm with multiple levels of decision making. Ideally, however, all of these parts are aligned to support the customer experience design and enhance business outcomes. Choose the Right Vendor Management Model Companies must also organize internally to support strategic relationships with vendors. For this reason, the second step toward managing differently is confirming that the company s vendor management model is appropriate for the situation. There are three main types of operating models, each with its own set of advantages and disadvantages (see Figure 2). Choosing the appropriate one depends on a number of factors, including company structure, culture and performance objectives. In many cases, companies evolve toward a more centralized model as they grow or look to improve operational excellence; sometimes companies opt for a blended design because it fits with their specific purpose or level of capability. The three types of models are: 1. Decentralized Each area of the business selects, contracts, manages and executes with its contact center vendors separately. On the plus side, this highly customized approach can be easier to implement and may reduce disruption to the existing company organization. Each area can make autonomous decisions more quickly, but are also held accountable for the quality of the customer experience provided and for operational controls. On the down side, a decentralized model will not provide the economies of scale that are possible from negotiating large contracts with contact center vendors. The autonomy can also lead to an inconsistent customer experience as each area of the business will manage their vendors in a silo, frequently with different styles and standards. Decentralization will require additional techniques and extra effort to drive standardization within a vendor and across vendors. As such, the decentralized model is not an effective approach for managing vendors that serve multiple areas of the business. 2. Hybrid The company establishes a vendor management governance model to drive standardization across all areas of the business, and shares common vendor management tools and leading practices. This centrally-driven approach provides a balance between standardization and functional business focus. Also, it should align with the company s business strategy and improve operational and tactical consistency, while distributing decision making across areas of the business. Unfortunately, the hybrid model can also present a potential conflict of priorities across these same functions. 3. Centralized This model provides a strategic coordination layer or center of excellence to help select, contract, manage and execute with contact center vendors on behalf of the company and engaged areas of the business. The advantages of this highly standardized approach include a centrallydriven model that has authority over all vendors and can leverage the company s power in contracting. This strategically aligned approach is also most likely to provide customers with a consistent onecompany experience across all touch points. From an operational and tactical perspective, the center of excellence can deploy standardized training and use standard reporting and analytics tools. Potential disadvantages include the need for additional resources and the possibility that less knowledge sharing would occur across all areas of the business. 5

Figure 2: Companies Must Choose the Appropriate Type of Vendor Management Model Standard Centralized Model (VMO) centrally driven with centralized decision making Additional coordination layer to manage vendors No authority for vendors at the areas of business level Advantages: Total authority over each vendor; leverage company power No conflicting priorities across areas of business Disadvantages: Resource heavy Less overlap & knowledge sharing (less diversity) Standard Operating Procedures Hybrid Model centrally driven with distributed decision making Governance model in place to drive standardization across areas of business Sharing consistent tools and leading practices Advantages: Balance between standardization & areas of business knowledge Disadvantages: Potential conflict of priorities across areas of business Customized Decentralized Model areas of business autonomy and decision making Completely separate areas of business Vendors are managed by each area of business Advantages: Ease of implementation No disruption of existing company organization Disadvantages: Not very effective organization for managing vendors who serve multiple areas of business Tailored to Areas of Business in Scope Consistent Customer Experience One Company Experience Source: Accenture LLP 6

Establish Multi-level Governance for Vendor Management The third step entails developing the governance framework that makes it possible for a company to manage differently. As depicted in Figure 3, the three levels of governance, along with purpose and appropriate roles, are: Strategic This tier is responsible for promoting joint commitment, setting the vision and strategic direction with vendors serving multiple lines of business, resolving strategic issues, and driving business outcomes. This level typically involves a company s C-suite executives, who meet with vendor executives on a regular basis to ensure strategic alignment, provide clarity on business requirements, directly address critical issues and discuss an innovation agenda. It also includes relationship managers from both sides, who are focused on defining specific business outcomes over the short and long term. Operational This level emphasizes the development of operational execution plans, reviews metrics at a high level, helps drive and implement the agreed strategic agenda, and manages service expectations. Operational owners usually include vice president and director-level executives who work with their vendor equivalents to review the contact center services being provided, including service level agreement change requests, and to address recurring problems and significant issue escalations. Tactical This layer influences the day-to-day performance of the vendor. Typically, a company s vendor managers work directly onsite with contact center vendor site management, and hold weekly service review meetings to respond to requests, drive agent engagement and proactively look for improvement opportunities. As needed, vendor managers can also serve as a liaison back to their company to expedite issue resolution. Figure 3: Companies Should Establish Three Tiers of Governance to Manage Differently Company Vendor(s) Strategic Promote joint commitment Set vision and strategic direction Resolve strategic issues Drive business outcomes Next quarter Next year Next three years Host joint vendor forums Members Representing Company C-suite Relationship Manager VPs Joint Review Board Quarterly Operational Committee Monthly Members Representing Vendor Vendor executives Relationship Manager Vendor executives Operational Develop operational execution plans Drive agreed agenda Manage service expectations Discuss/approve change requests Manage problem escalation and resolution Operational Owners VPs Directors Service Review Meetings Monthly Service Representatives Vendor site directors Tactical Influence day-to-day responsibilities Measure results Resolve performance issues Enable and support operations Drive agent engagement Site Owners Vendor managers Service Review Meetings Continuous Service Representatives Vendor site management 7

Three Perspectives on Managing Differently Depending on an individual s role in the company, here are areas to address when moving toward managing vendors differently: C-suite Consider how the company is organized to deliver the customer experience strategy, how parts of the vendor management ecosystem work together to support the strategy, and how the vendor management model aligns with this approach. Meet with C-level vendor executives of preferred vendors to set the tone of the strategic relationship, align the customer experience agenda and discuss how vendors can support the strategy with innovations beyond service level agreements. VPs and Direct Reports From an operational perspective, review all services that preferred vendors provide across the company and evolve vendor management model as needed. Continue to set tone of strategic relationship when developing operational plans that drive strategic agenda, managing service expectations, handling problem escalations and resolutions, and reviewing change requests. Make sure that operations are managed with cultural sensitivity across countries and locations. Vendor Managers Provide onsite face of company and monitor weekly or daily results against consistent metrics. Carry out the tone of the strategic relationship in terms of behaviors and interactions with vendor. Create a tactical plan for areas that need to be improved or implemented on a site-by-site basis, such as agent engagement scores. Work with vendor site leads to prioritize components of plan and provide company resources as needed to help vendor make progress. Help vendor troubleshoot performance issues and identify solutions. Coach and advise vendor site leaders as needed. 8

Revise and Strengthen Vendor Manager Role and Responsibilities A company s vendor managers (also known as site leads or vended operation liaisons) are a pivotal role in the daily management of strategic relationships with vendors. Assuming that a company already has these roles in place, it is important to review the role and revise responsibilities as needed to ensure that vendor managers can truly manage differently and do so successfully. If the role does not yet exist, it is critical to consider adding it to the vendor management ecosystem. The overall intent of the role is to convey alignment with the company s customer experience vision and brand, to assess and inspect what is going on at the vendor sites, and to advise and monitor results. This may require working up to 75 percent of time at a contact center vendor site to provide the essential face-to-face interaction. The vendor manager responsibilities will vary based on the company s strategy and customer experience agenda; however, main areas of focus include: Vendor Site Performance Management Use core common tools and processes, review and validate vendor root cause analysis, and help create plan for desired performance objectives at site. Respond to requests for assistance and bring in resources from company to address. Ensure quality assurance activities take place and monitor results. Coordination Serve as the primary company point of contact for the vendors, hold meetings with key stakeholders to review site initiatives and progress, and facilitate coordination across company organizations in working with the vendor site. This might include removing potential barriers inside the company for the vendor or resolving internal issues, such as conflicting metrics, to allow the vendor to deliver on the customer experience. Collaboration Gather and share leading practices from other sites as appropriate; participate and present at leading practice sharing forums. Bring to bear appropriate resources from company to assist site in achieving its goals. Working Day to Day in a Strategic Relationship The final step in managing differently comes from the ongoing efforts of the C-suite, relationship managers, operational owners and vendor managers to work with and across multiple vended operations. As described in the sidebar, Three perspectives on managing differently, this includes instilling the company s strategic direction, establishing a favorable culture and modeling appropriate behaviors to make sure vendors can provide a consistent customer experience. Key considerations include: Set the Right Tone At the strategic and operational levels, help vendors understand the brand and passion with which to interact with and serve customers. Extend this tone at the site level by using a collaborative management style, conducting training and providing co-coaching with vendor executives to help motivate customer service representatives. Validate where things are operating smoothly, and share data and analytics to support directional improvements that need to be made. Develop Collaborative Environment Create an environment that is conducive to collaboration. This makes it easier to work together to solve problems and identify continuous ways to improve. Based on Accenture experience, some of the best ways companies can improve the vendor environment are to communicate consistent priorities, focus on a few clear metrics and regularly model constructive behavior (see Figure 4). Strengthen the Strategic Relationship Find ways to expand and fortify the relationship with vendor leaders. In the select differently phase, companies should be looking for contact center vendors with core competencies that complement or strengthen the company. When managing differently, companies can leverage these competencies and drive innovations that enhance the customer experience and brand. For example, companies and their counterparts at the contact center vendors can share and incorporate customer relationship management leading practices. They can also jointly pursue innovations in areas such as call center organization, first call resolution or customer segmentation. 9

Figure 4: Ways to Inhibit and Help Enable Success in Vendor Management Vendor Management Success Inhibitors* Flavor of the month metrics Lack of skill in working across cutures Threatening approach with vendors which destroys partnership Prescriptive approach where partners are told how to do their job Inconsistent support services Lack of onboarding and training for vendor management professionals Lack of clarity or inconsistent roles of vendor managers Lack of coordination across areas of business Vendor Management Success Enablers* Consistent prioritites and metrics Clear, critical few metrics Leaders who reinforce and model a partnering approach Data, reporting, and tools provided for partners and vendor managers Clearly communicated partner expectations Vendor Managers site visits and spending time with agents as well as leadership Stack ranking of partner performance; knowing where each partner stands against others Sharing leading practices with partners The Neuroscience Behind Managing Differently According to the Accenture point of view, Trends Reshaping the Future of HR: Talent Management Meets the Science of Human Behavior, new insights into brain science and human behavior are rapidly emerging from scientists worldwide on everything from how people learn, to what motivates them, to how they regulate their emotions. As one example, a new field is emerging around applying neuroscience, the study of the physiological functioning of the brain, to human behavior in the workplace. These insights have the potential to radically reshape the way companies manage their employees and vendors to achieve business results. The concept of managing differently described in this point of view fully takes these ideas into account. As opposed to a command and control style of leadership, which implies managing through a fear-based relationship, managing differently requires a collaborative approach, which is more likely to produce better performance results. Applicable findings covered in the Accenture article include: Most people are not best motivated by the carrot (e.g., rewards like bonuses) and stick (e.g., threats like being let go) reward system or extrinsic motivators. 1 Instead it is more productive to motivate people primarily through intrinsic motivation 2 and communicate purpose in the organization rather than merely profits. 3 High performance and satisfaction at work is most strongly related to the feeling that employees can direct their own lives, learn and create new things, and do better for themselves and the world. 4 Positive, emotional connection (or feeling positively connected to others and the organizational mission, with little negative emotions in the workplace) is a key ingredient to peak performance. 5 Today, some companies are utilizing new insights from neuroscience to enhance performance, engagement and satisfaction of the workforce. For example, they might coach a group of call center managers on how to more effectively manage their teams using the principles of brain science. Companies can also incorporate these ideas into their management style at all levels, for example, by conveying purpose toward common customer experience goals to build intrinsic motivation, and by fostering a positive culture at the vendor site. 10

Managing Differently Can Drive Results Companies in every industry are challenged to improve customer service and deliver a branded customer experience at a lower cost. By building strategic relationships with preferred contact center vendors and committing to managing them differently, companies can drive game-changing operational performance. Fully engaged vendors will be able to deliver a more consistent and branded customer experience, which can improve customer satisfaction rates. They will be able to accelerate improvements, such as first contact resolution efficiency, which can reduce cost to serve. Additionally they will be highly motivated to innovate together with the company to achieve goals. References 1. Brain Rules: 12 Principles for Surviving and Thriving at Work, Home, and School by John Medina (Pear Press, 2009), James, K. H. and S. N. Swain (2011). Only Self-generated Actions Create Sensori-motor Systems in the Developing Brain. Dev Sci 14(4): 673-678 and as described by Srini PIllay, CEO of NeuroBusinessGroup and as referenced in Organizational Agility: Practical Perspectives from Brain Science, by Srini Pillay and Yaarit Silverstone. 2. Brain Rules: 12 Principles for Surviving and Thriving at Work, Home, and School by John Medina (Pear Press, 2009). 3. How Brain Science May Change the Way We Live, by Tim Jarvis (O, The Oprah Magazine), November 2008, http:// www.oprah.com/health/ How-Brain- Science-May-Change-the-Way- We- Live/5#ixzz2KQm1oh9f. 4. Edward M. Hallowell, Shine: Using Brain Science to Get the Best from Your People (Harvard Business Press, 2011). 5. Biology of Business Performance, by Jack L. Groppel, PhD, and Ben Wiegand, PhD, a whitepaper by Wellness & Prevention Inc., a Johnson & Johnson Company, http://www. hpinstitute.com/sites/default/ files/biology%20 of%20business%20 Performance.pdf. 11

Contact Us To learn more about how Accenture can help you select, contract, manage and execute contact center vendor relationships, please visit www.accenture.com/ managementconsulting or contact one of the authors: Dwayne Norton dwayne.e.norton@accenture.com Janice Simmons janice.l.simmons@accenture.com About Accenture Accenture is a global management consulting, technology services and outsourcing company, with approximately 281,000 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$28.6 billion for the fiscal year ended Aug. 31, 2013. Its home page is www.accenture.com. 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 2014 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.