Virtual Call Centres: Potential Productivity Boosters

Equipment ownership, employee responsibilities must be addressed The virtual call centre is not a new idea. Companies such as Pizza Pizza have used home-based agents to handle customer calls for years. Some big contact centre outsourcers in the US employ nothing but remote agents. But today, for a number of business and technical reasons, the virtual call centre appears on the brink of going mainstream. Does sending agents home make sense for your organization? Certainly the claimed benefits are attractive – reduced costs, reduced churn, reduced absenteeism, higher employee morale, better business continuity. And available technology can make it relatively easy to implement and manage, far easier than it was for pioneers like Pizza Pizza. But technology doesn’t solve all the problems, and launching a successful virtual call centre is no slam dunk – as some early pioneers that retreated to a centralized approach have learned. Still, according to Home-Based Agent 2005-2010 Forecast and Analysis, a December 2005 report from IDC, the number of home-based agents in the US will triple between 2005 and 2010. The market research company says there are an estimated 112,000 remote agents working from home in the United States today. By 2010, it predicts that number could surpass 300,000. Anecdotal evidence suggests the same thing is happening in Canada. Fox Group, a Toronto-area telecom consultancy that specializes in helping companies set up telework programs, says more than half its clients with call centres – about 20 – have at least some home-based agents. Telus Corp., which offers hosted call centre services, including support for remote agents, is also seeing interest grow, although Stan Tyo, the company’s vice president of contact centre solutions, says it’s still "very embryonic." "Companies want it," Tyo says. "They’ve done field trials, there’s been a lot of limited success, but it’s typically not been rolled out on a large scale yet." Why the sudden interest in virtual call centres?Panic StationsThe big driver right now is concern about business continuity in the face of new threats. The events of 9-11 started companies thinking about the risks attached to centralization in general and traditional call centres in particular. In Canada, the SARS scare of two years ago sharpened those concerns. What happens if a public health emergency shuts down your call centre? How will you carry on doing business? "Quite a few large call centres started to say, ‘We’ve got to spread this out,’" says Roberta Fox, senior partner at Fox Group. Now, fear of a bird flu pandemic has companies thinking even more seriously about the potential risks. "I think we’re on the cusp of a wave here," Tyo says. "Should there be a flu pandemic, I think you’ll see everybody scurrying to do this." In the US, Hurricane Katrina prompted a similar rethink, says Robert Wollan, managing director of Accenture’s Minneapolis-based Customer Contact Transformation practice. "Companies are starting to ask, ‘Can I really afford to have one centralized operation running at scale or are there options for spreading it out slightly?’ We tend to talk most about home agents, but another option is a satellite office strategy." While business continuity planning (BCP) may be driving much of the recent upsurge in interest, it’s by no means the only reason for considering a virtual call centre. In fact, Wollan doesn’t even mention BCP until prompted. Many of Accenture’s US clients, he says, are looking at using remote agents for purely economic reasons, and as a more palatable alternative to politically undesirable offshore outsourcing. IDC also identifies "homeshoring" as a primary driver behind the predicted growth of virtual call centres. The business caseMost analysts agree home-based agents, even if they’re employees, cost less than in-house agents, probably less still if they’re outsourced. Remote agents typically make more per hour than in-house agents – in the US, $13 to $14 compared to $8 to $9, according to Reuters. However, the employer can eliminate real estate, HVAC and other costs related to having employees on premises. It will only see these savings if it takes steps to rationalize space, though, Wollan warns. Fox claims the loaded cost per employee in the Greater Toronto Area (GTA) is $1,000 per month. In her own virtual company in which all employees work from home, the cost is closer to $200. The difference won’t be pure savings, however. Increased IT support costs for home-based call centre agents will offset some of the savings, Fox says, but it’s still a significant net gain. Not only are remote agents cheaper, there is some evidence they’re more productive. Fox Group conducted time and motion studies of teleworkers in general showing that outwardly-focused employees such as sales and service people – including call centre agents – saw their productivity increase 25% when the employee teleworks one day a week, 40% when doing it two days and 18% when working from home three or more days a week. A study published two years ago by AMR Research in the US suggests that when a company replaces an in-house call centre with a virtual operation, agent productivity increases by 15%, annual agent turnover decreases to 5% from 60%, and the company saves an estimated $1 million per 100 call-centre agents. Given that employee turnover is one of the biggest challenges for call centre managers, that improvement alone – if true – should be an enormous inducement. Office Depot in the US reportedly saw turnover cut in half from 60% per year after it went to a home-based agent system. It also experienced a reduction in absenteeism. JetBlue Airlines, one of the first to build a virtual call centre, has an annual turnover rate of just 4%, according to one report. Flex TimeScheduling flexibility is another related benefit. Young mothers, for example, often can’t get into work if their children are ill. Letting them work from home means they can more easily balance work and home responsibilities – which means they’re more likely to stay with the job. Fox says the need for scheduling flexibility is a key driver today for many companies considering moving to home-based agents. Call traffic patterns in most incoming call centres are marked by multiple short, sharp peaks and longer periods of steady traffic. The answer has always been to hire part-timers or run split shifts to cover the peaks. But with steadily worsening road traffic in many big cities, call centre employees – especially older, semi-retired people who now represent a significant pool of agent talent – are unwilling to commute for short shifts. "Economies in the last five years have been very tight, and part-time agents do cost less per hour," Fox says. "So all call centres are looking at shorter-houred agents being a bigger percentage of their seats. The trouble is, people will not spend an hour or an hour and a half commuting to a four-hour job. So a lot of companies are saying, ‘Why not have them home based?’" For call centres that employ highly skilled agents – technical support centres, for example – the problem is finding enough agents within the call centre’s catchment area to fill their needs. "It’s often hard to find a group of people so specialized in one locale," Wollan says. "Some companies are finding they have more luck if call centres are distributed in satellite offices or agents are home-based." Willow CSN Inc. is one of a small handful of US call centre outsourcers that use home-based agents exclusively. The company’s clients often turn to Willow either because they can’t find enough skilled workers near their own call centres, or because they’re looking for short-shift workers. Willow uses home-based agents so that it can offer clients the kind of flexibility and reach they need. "That’s the beauty of our model," says Willow vice-president of technology Tim Himes. "It gives us a great deal of flexibility – it gives us the ability to work for short non-contiguous periods of time. We started out in south Florida but now we have 2,500 agents in 30 states." Mature TechnologyAt least some of the business drivers pushing the current virtual call centre boomlet have been there for some time, but the technology to make it work has only recently matured. Powerful industry-standard PCs with multimedia capabilities now cost much less than $1,000. Ubiquitous IP networking – in the enterprise and in the wide area – and the availability of low-cost broadband access services for the home make it easier to get real-time data, including rich media data, to a remote agent’s desktop. "When companies wanted to do this five to 10 years ago, they had to use ISDN," Fox points out. It could be done, but not as easily or as well. Home DSL and cable modem services cost less than $50 a month. They offer minimum access speeds of 384 Kbps – and more often 1.5 Mbps and higher. That’s a huge improvement over the 144 Kbps ISDN offered. VoIP on the same broadband connection also offers big advantages, although in Canada only the most advanced virtual call centre operations are relying on IP voice at this point, Fox says. "Retail catalog and delivery operations in particular involve very short transactions," she explains. "So they have to have very good, reliable infrastructure or customers will quickly move away. Customers won’t call back for a pizza order ." VoIP is an integral part of the hosted virtual call centre services Telus is offering, and of the systems Willow and other outsourcers use. A number of mature call centre systems designed from the ground up to support remote agents are now available, including CallCenterAnywhere from Telephony@Work Inc., which both Telus and Willow use. Others include StrataDial.VC2 from Stratasoft Inc. and Siebel Contact OnDemand Virtual Contact Center from Oracle Corp. These systems solve many of the problems that seemed intractable with older technology, such as how to monitor and supervise remote agents. CallCenterAnywhere (CCA) is a multimedia server-based solution that uses SIP (Session Initiation Protocol)-based VoIP but can easily interface with traditional TDM voice systems. It uses a browser-based interface so agents don’t need a separate client application. The system also includes many application programming interfaces (APIs) that make it relatively easy to integrate it with legacy systems – CRM, transactional, et cetera – and deliver screen pops similar to traditional ACD systems. Supervisors can listen in to remote agents’ calls and use "whisper" mode to feed them instructions or information that only the agent can hear. Call recording is embedded in the system. Supervisors can also generate a variety of customizable reports that let them monitor and compare agent performance. The system can be set up to support blended agents handling voice, chat and email callers – or a call centre with single-mode agents. The Telephony@Work system also has a hot mirror backup system. The PitfallsHome-based agents may sound like a good deal and the enabling technologies to support them are available, but setting up a virtual call centre can be fraught with peril. "A long time ago," says Fox, "I realized that the technology is the easy part. The people side, that’s not so easy." The challenges can probably all be overcome, but forewarned is forearmed. Tyo says that one reason some early pioneers reverted to centralized in-house operations is that remote workers felt isolated. "They didn’t feel like they were part of the company anymore." This is certainly a risk, but it’s avoidable. Himes notes that home-based agents actually need more feedback than in-house agents, partly because they are physically isolated, but also because their performance is more apt to be measured. Systems like CallCenterAnywhere make it easy for supervisors to give them more feedback, he says. Willow also encourages agents to interact with each other electronically. As much as proponents tout productivity boosts, Wollan warns that you can’t assume agents will be as productive at home as they were in a central call centre. For one thing, their isolation from the rest of the company may reduce their commitment. They may as a result lose or never acquire the "spark" required to be a really effective agent, especially when selling. And for some, working at home "feels more like a day off," Wollan says, which can also erode productivity. These may be problems as much of perception as fact. Wollan concedes that the latest technology – including webcams and some of the mechanisms in systems like CallCenterAnywhere – can help keep home-based agents closer and more committed to their employers. It’s also important to establish appropriate metrics for evaluating remote agent performance. At Willow, agents are incorporated entities, not employees, and they work, as Himes puts it, on a "pay for performance basis." While the company cites an average hourly income in its online pitch to prospective recruits, earning the maximum requires agents to hit performance targets such as number of up-sells or cross-sells and average sales order volumes. "Pay for performance is a great motivator," Himes says. It’s obviously easier, though, to set performance targets for some job functions than others. "Sales agents, because they have a self-incentive to be available and very productive, have been very conducive to outsourcing and now home-based agents," Wollan says. "But it’s much harder for customer service or support functions." Himes would disagree. He says his company’s agents fill virtually every kind of call centre function from retail sales to skills- and knowledge-intensive insurance and health care functions. The Right PeopleIt’s also important to send the right people home and have the right people in place to supervise them. "There will be some people who just can’t do it," Fox says. "If you go totally remote, you may have to find other jobs for those people, or let them go. Some managers can’t either, and others don’t want to." She adds, though, that one reason virtual call centres are finding greater acceptance now is that 20 years of experience with telework has taught at least some companies how to effectively manage remote employees. Willow uses a stringent screening process to select agents with the personality and self-discipline needed to thrive in a virtual environment. "Some of our clients have said, ‘Let my agents go through your screening process,’" Himes says. "We’ve found that some of their best agents couldn’t make it through the process. These are people who just really enjoy going to work with a group of people, to a place where there’s a high social component. That’s the work environment where they thrive." On a more practical level, how do you keep agents well-trained and well-informed? In the simplest case, as Himes says, "How do you replicate the quick huddle before a shift to pass on the latest stuff about new policies and prices?" Willow uses a couple of mechanisms. Its proprietary scheduling system lets the company push critical information – recent price changes, new products – to agents when they log on before a shift. It also trains them to routinely check intranet pages for less time-sensitive information. Tech SupportTechnology may be the great enabler, but it can also create problems. Who owns the hardware in the home? Who’s responsible for technical support? Willow agents supply their own computers, phones, broadband access and peripherals, and the technology must meet standards the company sets. Agents are also responsible for keeping software and security up to date. The Willow system automatically checks agents’ computers at log-in to ensure the latest security patches and antivirus software are in place. If they’re not, the agent can’t log on. But Willow is a special case because its agents are self-employed. Where home-based agents are employees, it’s a little trickier. Fox argues that it’s unfair to make home-based agents pay for their own equipment when in-house agents do not – unless the additional costs are reflected in the compensation package. But how does the company keep control of assets when they’re located off its own premises? How does it ensure equipment is well cared for if employees don’t have a stake in it? The answer, Fox says, is to establish clear policies and standards and make employees sign contracts that include provisions such as a ban on family members using company-supplied equipment. Despite the logic of her argument against forcing employees to buy equipment, many companies in the US have in fact gone that route as a way to eliminate asset control problems, Wollan says. The company will almost always provide technical support, or contract with a third-party organization to supply it. Even Willow provides first-line technical support – although if the problem turns out to be hardware- or broadband service-related, the agent is directed to a nearby third-party organization to get help. The problem with technical support is controlling costs. As Fox notes, it will inevitably be more expensive than providing tech support for in-house agents. For example, it’s more difficult, though no longer impossible, for tech support agents to take remote control of a PC over the wide area network. It also adds to the difficulty and cost of providing technical support if employees are using their own computers on which they’ve loaded non-standard software and installed non-standard peripherals. One more argument for company-supplied and controlled computers, Fox says. Bottom LineVirtual call centres won’t work for every company or every call centre function. Not every call centre agent can be a home-based agent, and not every call centre manager can manage remote agents. That said, the virtually guaranteed benefits – reduced exposure to disaster risks, improved scheduling flexibility – are compelling on their own. If you can also satisfy yourself that a virtual call centre will increase agent productivity and reduce churn and absenteeism, it becomes a no-brainer. Just keep in mind that this is not a trivial undertaking. It requires a fundamental change in business processes. Start with a small pilot with a few agents, Fox suggests. "Work through the people and process issues, measure the results, then if it works, go ahead and do it after that. To go from, say, three call centres of 150 seats each to getting rid of two of them all at once could be disastrous to your bottom line. You’ve got to do it in gradual steps."

Virtual Call Centres: Potential Productivity Boosters

News | 03/01/2006 5:00 am EST

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