Tuesday, May 5, 2009

QUALITY monitoring -ACCOUNTABLE !

Bottom-line on the outsourcing article below... If you ship your calls off to an offshore company to save money and do NOT manage them and hold them accountable for their performance with YOUR customers, then you are exposed. You MUST hold them to high standards and understand what experiences your customers are having with their agents. Does an agent in Manila or India give a rats @#$ about your Customer Satisfaction levels and Loyalty ? They better ! or your days as a company are numbered... Customers will no longer tolerate poor service or the perception of an offshore agent reading from a script without any empathy for their needs.

The REAL cost of OFFSHORE OUTsourcing

The *Real* Cost of Offshore Outsourcing
– Pam Baker, CIO
April 28, 2009

One would think cash-strapped companies would find a heavenly match on foreign soils with plentiful, cheap labor. But that would be the romantic notion and not necessarily the reality. "Companies often 'plan for the wedding, but not for the marriage,''' says Dalip Raheja, chief executive officer and president of the Mpower Group. Now that offshore outsourcing is roughly a decade old, it's time to evaluate lessons learned and tally the real costs before renewing any vows.

The Honeymoon Is Over
"After a period of explosive growth in offshore outsourcing many companies are moving past the learning curve when it comes to the tangible costs of moving services and production offshore," explains Raheja. "Experience has built more certainty around what was once considered previously 'hidden costs,' or costs related to transition, development, selection, etc., which could easily cancel out any financial benefit of doing business offshore."
Now that time has told its tale, flaws are revealed and divorce becomes an option. One example, Delta's CEO, Richard Anderson, announced this month that the airline canceled its outsourcing to India because its customers were very vocal against foreign customer service agents. The struggling airline desperately needs happy customers so it responded to the complaints.
Often it is not simply the loss of disgruntled customers, a loss bad enough in a down economy, but loss in efficiencies and productivity as well that leads to the severing of offshore outsourcing relationships.

"We often find that outsourced agents are not trained as deeply as agents who work internally for an organization, and often lack the tools to do a thorough job for customers," says Dr. Miriam Nelson, senior vice president of Aon Consulting, a global HR/human capital firm. "We hear them rushing through calls, merely repeating the same troubleshooting steps, since they do not have that deeper understanding necessary to explain issues in a different way for the customer."
When call center work is outsourced to an offshore firm, service drops even further according to Nelson. "Offshore call centers are not only challenged by being in an outsourced position, but they also have to overcome language barriers and cultural disconnects," she explains. "When we benchmark offshore service against onshore service, offshore scores much lower."
The cost of poor service translates to hard currency losses for any corporation.

One example: Aon recently observed an outsourcer in the Philippines and found the following, according to Nelson:

41 percent of all calls are placed on hold. The average total hold time is 331 seconds. Agents are typically looking up information or speaking with other departments during these holds. Reducing the average hold time by 30 percent alone would result in an estimated annual savings of $384,000.

Agents are not speaking clearly on 56 percent of calls. The average talk time on these calls is 232 seconds longer than necessarily. This represents an estimated annual cost of $1,219,594 to the organization.

Problems Loom Large
However, problems with outsourcing are not contained to call centers; rather they cover the spread of business functions and business relationships.
One glaringly ugly example of a far-reaching problem: the Satyam Computer Services scandal which involved dual accounting books, mountains of forged invoices, faked bank statements and large numbers of unnecessary workers. Customers and investors alike were bilked and bamboozled by India's fourth largest outsourcing company.
"The Satyam situation dramatically weakens one of the fundamental pillars of the outsourcing model—that service corporations in emerging markets are fundamentally organized and monitored in the same ways as their client companies," explains Tim Carbery, principal of Axis Technology, a provider of IT and data security offerings for outsourcing with a client list that includes Bank of America, Wachovia, Fidelity and Citigroup.
This 'pillar' has been supported, according to Carbery, through specific contractual obligations (such as audited financials) between the BPO firms and their clients, which was considered the client firm's protection against local variations in business culture and regulations. "These client companies will now need to re-assess and audit their SOX and corporate policy compliance across all of their service providers to assure customers, and shareholders that they are not at risk," he says. "At this point only Satyam has been tarnished, but if irregularities surface at other providers through these assessments, even minor ones, then a significant portion of the industry could suffer lasting damage."
Paying the Tab
As the bills land in accounts receivables and checks flow out in payment, many think they have finally accounted for all the costs involved in outsourcing. But that may not be so. "Companies still have uncertainty around the intangible aspects of effectively managing and planning for a successful outsourcing relationship," says Raheja. "These hidden expenses include everything from the high rate of outsourcing relationship failures and the costs associated with a failed relationship, to underestimating the amount of time, resources and capital needed to ensure a successful outsourcing relationship."
There are other costs lurking in the shadows that are often overlooked. "Companies that outsource to China often ignore the big things like the potential loss of intellectual property and the legal costs involved in going to a foreign country," says Daniel P. Harris, attorney at HarrisMoure. "They also oftentimes fail to account for the little things as well, which can add up too. For example, I just finished working with a company that set up a software outsourcing operation in China and in doing their cost numbers, they initially completely failed to account for the fact that employers in China typically have to pay between 30 to 40 percent in taxes for every Yuan paid in wages."
Gutted and Gone
Perhaps the greatest unforeseen cost is how a now gutted company retains its shape after large portions of its inner workings move out.
"The most expensive long term cost is losing the expertise on how to do the 'simple things,'" says Alton Martin, COPC Inc. CEO and co-founder. "When you are outsourcing basics, such as IT, customer care, etc. the company looses insight to these departments to the third party, leaving the company at a loss when they need to fix more complicated issues."
Few companies realize this kind of loss applies to intellectual capital as well.
"Intellectual Capital (IC) includes the knowledge base—the expertise—your team develops solving problems," explains James C. Roberts III, Esq., attorney at Global Capital Law Group. "In this case, we see that the teams do not create the development toolkits they could use in the future. Conversely, the developer now has the toolkit to use for competitors. Intellectual Property (IP) loss arises when the U.S. company has to 'open up the kimono' to show the developers proprietary code in order to do the development."
"Losing the IP and IC is worse when the developed product or service actually requires on-going rights in certain underlying technologies or the developers' toolkit or even maintenance—especially if the offshoring partnership goes under," he added. "We find that much of this gets short shrift in negotiating the agreements."
The remaining elements contained in-house may mold a different vision than C-level management intended. "The greatest difficulty is in foreseeing what the organization will look like post-outsource,' says Dane Anderson, vice president of IT Services and Sourcing Technology & Service Provider Research at Gartner. "At first it was just a reduction in headcount. Now, holy cow, there's a vacuum where institutional knowledge used to be."

Friday, March 20, 2009

Upgrading TALENT in Call Centers.

Interesting article about companies upgrading their talent in this tough economy. There are many people in the job market...perhaps some better than who we have today ? should you clean out the poor performers and bring in the right people ? This could help a lot in SALES and COLLECTIONS roles...

A battle for talent
By Rebecca Knight
Published: March 19 2009 20:44 Last updated: March 19 2009 20:44
It may be the worst job market since the Great Depression, but here is the good news: some companies are still hiring. But the reason they are hiring is because they are clearing out mediocre employees in the knowledge that they can hire better replacements.
In consultant-speak, it is called "up-skilling". Companies eager to take advantage of the surplus of talented workers looking for jobs are cutting more of their own employees to make room on the payroll for new hires with specialised skills.
"Organisations are taking this opportunity to upgrade their talent," says Seymour Adler, a senior vice-president in Aon Consulting’s human capital practice. "They recognise that there are better people out there so they ‘over-correct’ on the downside to take advantage."
Of course, companies that shed jobs do so to save money. But according to human resources experts like Mr Adler, they often reduce their headcount more than they necessarily need to in order to re-stock their pipeline of fresh talent.
Last year, US companies shed 2.6m jobs, the largest number in a calendar year since 1945. The unemployment rate in the US now stands at 8.1 per cent, according to the US Department of Labor, and many economists predict it could reach 10 per cent this year.
"Companies are talking about exploiting the environment," says Mr Adler. "There are some highly qualified people out there, and companies are taking the opportunity to assemble an A-team. They are taking the Draconian, Jack Welch approach of cutting the bottom 5 or 10 per cent, and replacing them with people who are going to be top performers."
Perhaps the biggest reason companies over-correct during tough economic times is that they can bring in new talent more easily – and often more cheaply – than they could in a good economy.
Mr Adler says this is particularly true of newly minted MBAs, or entry-level positions for recent college graduates. "They can be had for a starting salary of 10 to 20 per cent less than what the market would have demanded two or three years ago," he says.
The trend is evident in industries from finance to marketing to IT but is most pronounced at technology companies and consulting firms. "These companies are very attuned to the need for fresh blood, fresh ideas and innovation," Mr Adler says. "They realise they can bring in two bright people fresh out of school with the latest and greatest models for the price of one of their [current] employees."
Mr Adler says most companies use a rule of thumb of 5 per cent, meaning that if the organisation aims to decrease its payroll by 10 per cent, it downsizes by 15 per cent. "You do it in a way that it won’t make a material difference to meeting the needs of the business," he says.
‘Organisations recognise that there are better people out there so they "over-correct" on the downside to take advantage’
Simultaneous hiring and firing is standard business practice, but it has been exacerbated by the depth and severity of this recession, according to Emory Mulling, a consultant who runs an outplacement firm in Atlanta, Georgia.
Companies are not simply taking a hard look at their headcount but trying to think more strategically about their human capital: where they most need employees with specialised skills, and which departments are expendable. "There’s a saying that there’s nothing quite like a recession to get a company in order," says Mr Mulling.
Tough economic circumstances force companies to scrutinise employees – especially in the ranks of senior leadership – to determine whether they are the right candidate or whether there may be someone better, according to Elaine Eisenman, a former corporate human resources manager who runs the executive education programme at Babson’s business school just outside Boston. In a robust economy, poor performers tend to be shuffled into different jobs or moved to different locations; in a bad economy, they are let go.
"These are typically opportune times. Suddenly, you can get poor performers out with a lucrative [severance package]," she says.
Companies are also more likely to announce mass job losses today than they were 20 or 30 years ago, which also enables them to over-correct, says Detlev Suderow, a professor at Brandeis International Business School who specialises in international human resource management.
Shedding thousands of workers at a time is not a stain on a company’s record, and it does not damage its ability to recruit and retain workers. "Most companies realise there is no shame in laying people off. It’s normal, it’s accepted. Companies used to hire employees for life, but that’s not the case any more," he says.
Some companies, however, can go too far by mistake. Rather than a strategic, thoughtful restructuring of their workforce, they embark on a short-term cost-cutting exercise where they let workers go, but soon need to go on a hiring spree because there aren’t enough employees left to do all the work.
"There are some companies that have cut the number of people, but don’t reduce the work," says Eric Abrahamson, a professor at Columbia Business School who studies techniques for managing organisations and their employees. "That works for a while, but then the quality drops. There’s a reflex of cutting costs by getting rid of people, but you have to rationalise the work, too."

Monday, March 16, 2009

Improve Collections with Quality Monitoring

Aon Consulting Quality Monitoring is based on behavior analytics, how to impact customer behavior. This approach can help a lot in collections. The insight to understand the interaction between customer and agent is valuable in leading to a desirable outcome. For example:

-with a collections group of a national bank we identified specific rep behaviors that made it more or less likely for the rep to secure payment from the customer. Understanding this, we were able to work with the customer to increase rep production, provide more consistent collections forecasting, reduce delinquencies and better manage uncollectible lists.

-with a financing division of a computer company we identified which behaviors are having the strongest impact on their customer satisfaction. This was specific to their product and industry. We implemented a quality monitoring program that improved their customer satisfaction scores by 12 points in the first year.

Our team of Industrial Psychologists works with our clients to focus the customer experience on your needs. I will be happy to share some case studies and customer best practices in the collections area with you. Reach out to me if interested.

Wednesday, March 11, 2009

Aon Consulting delivers human capital consulting with service areas for talent strategy, talent acquisition and management, and organization improvement.

 Expertise in the strategic management of human capital, from talent alignment and workforce planning to human resources optimization strategies
 Ensure our clients have the talented employees and leaders they need now and in the future
 Strategic communication and change management expertise to ease clients through initiatives and small- and large-scale change
The methodologies used to evaluate the customer experience consider the customer perspective of the agent’s empathy and understanding of the reason for the interaction. Agent behavior measurements correlate to customer satisfaction objectives. The analytics identify business process opportunities and actionable recommendations. The ultimate goal of the monitoring program is to provide management with feedback to drive customer satisfaction, loyalty, revenue and profitability.

What makes this practice different from others is the use of graduate-level training in psychology and a third party perspective that delivers analytics following expected bell curve results. An example of a study completed by an internal QA department and Aon Consulting illustrates this point:



The findings in this example found the internal QA team ratings were not correlated to customer satisfaction. The third party model uses proven techniques and eliminates bias. A baseline for continuous process improvement can now be established.

Tuesday, March 3, 2009

EXTREME Customer Service

great special edition of Business week March 2,2009. Focus of the articles is how the smart companies are making sure their customers are satisfied and loyal...even as they are going through economic trumoilInteresting case studies too. Check it out !

copy this link and paste into your browser address.

http://www.businessweek.com/magazine/toc/09_09/B4121customer_service.htm?chan=magazine+channel_top+stories

rick

Tuesday, February 17, 2009

Measurable solutions through immeasurable insights

Quantity is not Quality. Are you substituting performance metrics for Quality metrics? Most call centers have software that capture this hard data you need --- number of calls answered, talk time, handle time, ASA. Do these relate to Quality? I suggest that measuring these alone has little if anything to do with Quality.

Let’s look at talk time. A shorter call can be perceived to be a good thing. But how do you know the call was successful? Did the caller go away happy? Did they end the call short due to frustration? What does a short talk time show other than it was a short call? We can also look at a long call. Was this a good thing because the agent was engaged with the customer solving problems, upselling or generally improving customer satisfaction and loyalty? Or was the call long because the agent did a poor job of answering questions, following the call roadmap and/or engaging the required resources to resolve the issue? Looking at call time alone does not really tell you much.

You need to take the time and listen to the calls to understand exactly what is taking place. What is impacting call time? What trends do you see? How can you improve the experience? This is the same for the other performance metrics too. Number of calls, hold time Queue etc. the numbers alone do not mean much. If you are truly looking for Quality you must listen.

The qualitative elements of a call can only be captured through listening --- and really hearing --- actual calls with the ears of an objective outsider. Only highly trained assessors can tell you:
 Did the agent address both the customer's stated and unstated need?
 Did they flexibly follow the call flow?
 Was there an opportunity to educate the customer?
 What else could have been done to delight this caller?
 What were the opportunities to reduce talk time while providing better service to this customer?
A good monitoring solution delivers measurable improvements through immeasurable insights. Do not fall into the trap of only looking at the numbers. Quality and satisfaction can not be measured by numbers alone.