Call Center Business Plan - Call Center Service · PDF file6.1 Start‐Up Expenses and Funding ... A key step in starting a call center is preparing a business plan. This must cover

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© Specialty Answering Service. All rights reserved.

Contents

1 Industry Analysis ................................................................................................................................... 3

1.1 Current Industry Landscape ............................................................................................................. 3

1.2 Analysis of Market Conditions ......................................................................................................... 3

1.3 Need for a Call Center ...................................................................................................................... 3

1.4 Key Factors that Influence Call Center Success ............................................................................... 4

2 Business Model ..................................................................................................................................... 5

2.1 What Services to Offer ..................................................................................................................... 5

2.2 How to Offer Services ...................................................................................................................... 5

3 Planning for a Call Center Implementation .......................................................................................... 7

3.1 Setting the Objective ....................................................................................................................... 7

3.2 Sizing the Call Center ....................................................................................................................... 7

3.3 Determining Call Technology and Equipment ................................................................................. 9

3.4 Additional Technology Investments .............................................................................................. 10

3.5 Planning Data Availability and Technical Integration .................................................................... 11

3.6 Involving Key Stakeholders in the Planning Stage ......................................................................... 12

3.7 Managing Operational Costs .......................................................................................................... 12

3.8 Making your Call Center Future Ready .......................................................................................... 13

4 Call Center Operations Management ................................................................................................. 14

4.1 Human Resources Management.................................................................................................... 14

4.1.1 Minimizing Staff Costs ......................................................................................................... 17

4.1.2 Staff Rostering and Scheduling ........................................................................................... 17

4.2 Business Continuity Planning ......................................................................................................... 17

5 Call Center Performance Metrics ........................................................................................................ 19

5.1 Agent Performance Measurement ................................................................................................ 19

5.2 Other Performance Indicators ....................................................................................................... 20

5.3 Performance Reporting to Clients ................................................................................................. 20

6 Project Financials ................................................................................................................................ 22

6.1 Start‐Up Expenses and Funding ..................................................................................................... 22

6.2 Sales Plan ....................................................................................................................................... 23

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6.3 Personnel Plan ............................................................................................................................... 24

6.4 Financial Plan ................................................................................................................................. 24

6.4.1 Break Even Analysis ............................................................................................................. 24

6.4.2 Projected Profit and Loss .................................................................................................... 24

6.4.3 Projected Cash Flow ............................................................................................................ 25

6.4.4 Projected Balance Sheet ..................................................................................................... 26

6.4.5 Business Ratios .................................................................................................................... 27

7 References .......................................................................................................................................... 30

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1 IndustryAnalysis

1.1 CurrentIndustryLandscape

Withmoreandmorecompaniesturningtosuperiorcustomerserviceasameanstostandoutfromtheircompetition,thecallcenter industryisgrowing.Astheeconomybecomestough,companiesarelookingtooutsourcecustomerhandlingtothirdpartyvendorswhospecializeinthecallcenterbusiness.Callcenterscanbebroadlyclassifiedintotwotypes–captivecallcentersandthirdpartycall centers. In a captive call center, the agents handle only one organization’s customers. It isusually set up as a subsidiary of the parent company and functions as a cost center. The mainobjective of such a call centerwould be to optimize the operational costwhile offering superiorcustomerservice.Acaptivecallcenter’sbusinessgrowsindirectproportiontothatofthegrowthintheparentcompany.

Inthecaseofthirdpartycallcenters,thecallcentermayservemultipleclientseitherinthesameindustryorvarying industries.Here thegrowthcanhappeneitherwhentheclient’sorganizationgrows,orbyacquiringnewcallcenterclients.Theoperationsofathirdpartycallcenterarerunasaprofitcenterandthefocusisonimprovingtherevenuebillingaswellasprofitsofthecompany.

1.2 AnalysisofMarketConditions

Thecall center industry is fragmented innature,andmarketplayersvarywidely in termsofcallvolumeshandledandservicesoffered.Whilesomeplayers focusonaspecificsector,othersofferservices across a wide variety of industries. Some players only offer call center services whileothers handles end‐to‐end customer service including reverse logistics. In the initial days,companieshadtheirowncallcenters.However,todaythetrendincallcentersisskewedtowardsoutsourcing. Call center operations are outsourced typically to English speaking third worldcountrieswherecostofoperationswouldbeonlyafractionofthecostthatyoumayincurintheUnitedStates.

An inbound call center is usually used for offering additional services to customers such ascomplaint handling, and informationonproducts and services.Anoutbound call center typicallyfocusesonleadgenerationforsales.Theycanalsobeusedtoconductcustomersatisfactionsurveysandforcampaignmanagementactivities.

1.3 NeedforaCallCenter

Acallcentercanprovideseveralbenefitstoanorganization.Thatiswhyawell‐plannedcallcenterhas a high chance of being profitable. In this section, we will look at some of the reasons whyorganizationsoptforcallcenters.Industriessuchasfinancialservices,wherethereisahighvolumeof transactions with the end customers, would benefit from a call center by helping to reducetransactioncosts.ThemajorityofsimpletransactionscanbecarriedoutbythecallerhimselfwiththehelpofasimpleIVRsystem.

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Inadditiontoloweringthetransactioncosts,callcentersalsoofferconveniencetocallerswhomaynot have the time for, or access to, the branch network or client organization for a face‐to‐facetransaction.

1.4 KeyFactorsthatInfluenceCallCenterSuccess

Thecallcenterindustryhasahighentrybarrier,asclientsdonotwishtochangethecallcentertowhichtheyhaveoutsourcedtheiroperationsduetothesignificantswitchingcostsassociatedwithchanging partners. The learning curve of agents is also quite steep, as they need to learn thebusiness processes and products of the clients being serviced. Intense competition among callcentersmakes itdifficult to increasebillingtoclients.Therefore, theoperationalcostshavetobekeptaslowaspossible.Givenbelowaresomeofthekeysuccessfactorsforacallcenter:

1. Arobusttechnologyframeworkthatcanaccommodateyearonyearbusinessgrowth

2. Awell‐trained andmotivated staff whowould strive to achieve quality and productivitygoals

3. A diverse clientele which would reduce dependence on a single client for revenue andmargin

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2 BusinessModel

Akeystep instartinga call center ispreparingabusinessplan.Thismustcoveraspects suchaswhatservicesyouwouldofferandwhichcustomergroupyouwould like to target.Bothof thesedecisionsdependontwokeyfactors–thecompetitionandyourskillset.Youcanbesuccessful ifyoucanidentifyaprofitablenichewithoutagreatdealofcompetition,thatcanbewell‐servedwithyourskillset.

2.1 WhatServicestoOffer

Callcentersfacecompetitionfromplayersallacrosstheglobe.Theindustryisfragmentedinnaturewithseveralsmallfirmscateringtosmallorganizations,whilesomeofthebiggerplayerscatertolargeclientssuchasGM,CitiandAmex.Sincethecompetitionis intense, it isdifficulttogetgoodratesbyofferingplainvanillasolutions.Ifyoucanofferservicescateringtohigh‐endnichessuchaslegalservicesormedicalservices,thenyouwillhavebettermargins.

Marketpenetrationisdifficultunlessyouareacaptivecallcenterwithassuredbusinessvolumes.Thisisbecausecontractsareusuallyawardedtofirmswithareputationforhighqualityservices.Onewaytobreakthroughthebarrieristohaveindustryveteranswithgoodprofessionalnetworksin your top management. The other step to take is to opt for quality certifications for youroperations,which can act as an assurance of your professionalism to potential clients. As a newplayer,youwouldalsoneedtoparticipateactively in industry forumsthatwillactasameanstointroduceyourservices topotentialbuyers.Bykeepingoperational costsas lowaspossible,youwouldbeabletogivebetterratestoclientsthatwillgoalongwayinwinningnewbusinessinthispricesensitiveindustry.Intheinitialstages,youmustalsobewillingtooffercustomizedsolutionpackages foryour clients inorder to capturemarket share. It isbest tohaveat least a coupleofcontracts under your belt before you start setting up your call center. This will help to assurerevenuesfromday‐oneofoperations.

2.2 HowtoOfferServices

Beforeanorganizationdecidestosetupacallcenter,carefulthoughtshouldbespentondecidingwhich service strategy is best. Some of the options for a call center include hotlines, sharedinfrastructurearrangements,establishinganin‐housecallcenteroroutsourcingthecallcentertoathirdpartyvendor.Eachoptionhasitsadvantagesanddisadvantagesandyoumustevaluateeachoftheseoptionscarefullybeforedeterminingthemostsuitableapproachforyourneeds.

Hotlines

Hotlinesarenotexactlycallcenters.Butifyouareanorganizationconsideringestablishingacallcentertoaddressatemporaryspikeincustomerqueriesorcomplaints,thenthisisabetteroptiontoconsider.Thiscanalsobeusedfornewproductlaunchesandcampaignmanagementactivities.

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The advantage of opting for a hotline is that it does not require a heavy upfront investment ontelephonyandITinfrastructure,anditcanbemadeoperationalquickly.Themainfocuswillbeontraining agents to handle the calls. However, hotlines cannot be a permanent strategy, as theoperationswillnotbeabletohandleheavycallvolumesforanextendedperiodoftime.

SharedInfrastructure

Thisoptioncanbeconsideredifyoudonothavesufficientcallvolumestonecessitatesettingupanindependentcallcenter.Youcanpiggybackontheexisting infrastructureofanotherorganizationthatalreadyhasanestablishedcallcenterbycreatingSLAsforqualityandproductivity.Youwouldonlyincurcontractualcostsandallset‐upcostscanbecompletelyavoidedinthiscase.

Organizationslookingtostartacallcentermustalsocarefullyevaluatethebenefitsofoutsourcingthecallcenteroperationsbeforeoptingforanin‐housecallcenter.Inthenextsection,wewilllookathowtoplanacallcenterimplementation.

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3 PlanningforaCallCenterImplementation

Properplanningisanessentialstepindeterminingthesuccessofcallcenterimplementationandoperation.Awelllaidoutbusinessplanisakeyfactorinensuringthatthecallcenterisalignedtothe objectives of the parent organization and has a profitable and cost effective operation. Thebusinessplanshouldalsoincludekeyservicelevelrequirementsforoperations,keyconsiderationsthatshallbekeptinmindwhilesizingthecallcenter,selectingtherightsiteforoperationsaswellastheextentofchangemanagementandprocessre‐engineeringneededfortheimplementation.Aperiodforkeyactivitiesshallalsobedrawnoutsothatthecallcenterisoperationalwithoutunduedelays.Thebusinessplanshouldalsoprovidetheorganizationalandfinancialreasonsforchoosingtosetupthecallcenter.

3.1 SettingtheObjective

Beforedecidingontheinfrastructure,enablers,technology,andstaffneededforthecallcenter,itisessential to lay down the business objectives of the call center. The choice of infrastructure,technology,andnumberofstaffandtheirskilllevelsalldependontheobjectiveofthecallcenter.This shouldbe set forthbeforeanyprocurementorhiringactivity is commenced.Theobjectivesshouldbeasnarrowaspossibleasthiswillhelptoprocurethe ideal technologyandstaffmixtoservetheneedsofthecallcenter.

Someofthekeyobjectivesofwhyorganizationsoptforsettingupacallcenteraregivenbelow:

1. Improvecustomerservicelevelsandoffer24*7supportforcustomers

2. Reducethenumberofcustomercomplaintsreceived

3. Costreductionoftransactionswithoutaffectingservicequality

Youneedtoidentifythemainobjectivesbehindsettingupyourcallcentersothatyouhaveclearlydefinedmeasuresofsuccess.

3.2 SizingtheCallCenter

Ifyouarethinkingofestablishingacallcentertohandlethecustomercallsforyourorganization,thenarrivingattherightsizeforthecallcenterisextremelyimportant.Youcanstartthisprocessbycollectingdatapertainingtothecallsthatyoucurrentlyreceive.Thefollowingdatapointsneedtobecollectedandanalyzedtodeterminethecallcenter’ssize:

1. Thenumberofcallscurrentlyreceived

2. Calldurationmetrics–averagedurationofcall,minimumandmaximumdurationofcalls,bucketingofcallsintovariousbucketsintermsofduration

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3. Metrics related to nature of call – bucketing of calls into inquiry calls, service calls,complaints/escalationcalls.

Oncethisdataiscollected,itshouldbecorrectedtoaccountforthelikelyincreaseincallswhenadedicatedcallcenterisintroducedandcustomerawarenessabouttheoptionincreases.Youmustalsocollectdatarelatedtocompetitor’scallcentersize,ifitispubliclyavailable.

Otherfactorsthatcaninfluencethesizeofthecallcenterinclude:

1. Timespentondataprocessingactivity–preandpostcall.

2. Likelyavailabilityofstaff(leavepolicyandabsenteeism)

3. Potentialgainstobeachievediftherightexpertismadeavailabletoanswerthecall,sothatmultiplecallscanbeavoided.Thisneedstobemeasuredbothinquantitativetermsofagenttime saved aswell as qualitatively in termsof improvement in customer satisfaction andbrandperception

4. Variations in peak traffic at different times of the day as well as between weekend andweekdays

The growth plans of the parent organization should also be considered. Thus, if the parentorganization plans to expand geographically, then you would need staff capable of handlinglanguageandculturalrequirementsofthenewgeography.Similarly,iftheorganizationisplanningtoenterintoanewproductline,thenthecallcenterstaffshouldbetechnicallycapableofhandlingqueriesrelatedtothenewproduct.

Ingeneral,sizinganinboundcallcenterismorechallengingthansizinganoutboundcallcenter.Inthe formercase, theorganizationcannotcontrol thecallvolumesor thevariation inpeak traffic.Whileahugeorganizationmayhireexternalconsultants toarriveat thesizeof thecall center,asimpleprocessofsizingthecallcenterisshownbelow:

1. Arriveattheinboundandoutboundcallvolume

2. Arriveattheaveragetimeforeachcallandrelatedprocessingtimeforeachcall

3. Arriveattheactualworkhoursofanagent

Theaveragetimeofeachcallshouldtakeintoaccountonlytheactualtimethatisspenttalkingonthetelephone.Theprocessingtimeincludesallpaperworkanddataanalyticsworkassociatedwithacall.Typically,ifyouconsideraneight‐hourshift,theproductivetimeoractualworkhoursforanagentislikelytobesixhoursor360minutes.

Oncethesenumbersareestimated,theaveragecustomertimecanbecalculatedasfollows:

Averagecustomertime(inminutes)=Averagecalltime+Averageprocessingtime

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Averagenumberofcallsperagentperday=360/averagecustomertime

Staffrequired=Totalcallvolumeexpected/averagenumberofcallsperagentperday

Ifthesizingofthecallcenteriscorrect,thenitgoesalongwayinensuringthatthehumanresourcemanagementofthecallcenter isasuccess.Sizingshouldalsoconsiderthelevelsatwhichagentsneed to be hired aswell as the recruitment and promotion policies of the call center. Once callcenter sizing is complete, the output should be a staffing plan, which includes the followingelements:

1. Numberofagentsinitiallyrequiredaswellasyearonyeargrowthplanforthenext3years

2. Identifytheorganizationalstructureanddetermineskilllevelsneededforeachrole

3. Developtherecruitmentprocessandthetimelines

4. Designtheinductiontrainingforinitialhires

3.3 DeterminingCallTechnologyandEquipment

Basedonthelevelofsophisticationneededforthecallcenteraswellascallvolumesandthebudgetavailable for setting up the call center, the choice of technology can vary widely. The variousoptionsavailablefortelephonytechnologyaresummarizedbelow:

1. Asinglecontactnumber:Thisisthemostrudimentaryapproachtowardsestablishingacallcenterwhereyouhaveatollfreenumberthatcustomerscancallwithouthavingtopayforit.

2. BasicTelephoneSystem:Heretheagentswillhaveseparatelines,whichcandirectlyreceiveandmakecalls.

3. PABXsystem:APrivateAutomaticBranchExchange isa setof specializedequipment thatcanallowcallstobetransferredinternallywhileretainingindividualnumbersfordifferenttelephones.Callerscandialaspecificextensiontoreachaspecificagentordepartment.

4. AutomaticCallDistribution(ACD):Thisisanadvancedsystem,usedinalmostallcallcenterstoday. This system provides the flexibility of offering improved customer service byallowingthecallstobeplacedonholduntilanagentbecomesfreetoanswerthecall.Thiscandrasticallyreducecalldropratesandachieveloadbalancingbyeffectivelydistributingincomingcallsbasedonadefinedsetofrules.MostACDsystemstodayhavetheabilitytogenerate comprehensive MIS reports on a near real time basis to help in analyzing callpatternsandchangingrulestoprioritizecallsbasedonrealtimevariationsincalltraffic.

5. IVR: IVR systems canalsobeused to route the calls to themost relevant agentbasedonchoicesthatthecallermakes.OneofthemajornegativeswithanIVRsystemisthatoftenacallerhastonavigatethroughseveralmenuoptionsbeforehecanspeaktoarealperson,

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whichcanleadtoalossincustomersatisfaction.Thus,itisimportanttopaycloseattentiontothedesignofthemenuinanIVRsystem.

6. ComputerTelephoneIntegration(CTI):Today,InteractiveVoiceResponsesystemsareusedmostly by inbound call centers to automatemany activities, which callers can handle bythemselves.Forafinancialservicescallcenter,thiswouldmeanprovidingdetailsofthelastfivetransactionsorthecurrentbalanceintheaccount.However,thiswouldrequiretheIVRsystemtobelinkedtotheunderlyingITsystemandcustomerdatabaseforauthenticationofthecalleranddataretrieval.ThisisachievedthroughCTI,whichalsoallowstheagenttoviewthetransactionsandcustomerinformationrelatedtothecallerassoonasthecall isroutedtohim/her.TheflipsideofCTIisthatitcanbeextremelyexpensivedependingonthefeatureschosen,andtypicallyonlyverylargecallcenterswouldhaveafull‐fledgedCTIsystem.InaCTIsystem,agentstypicallyhaveheadsets,andseparatetelephoneequipmentsuchashandsetsisnotrequired.

3.4 AdditionalTechnologyInvestments

Onceyouhavefinalizedthetypeoftelephonyequipmentthatyouwanttouseinyourcallcenter,thenextstepistoconsiderwhetheranyoftheadditionalequipmentmentionedbelowisrequiredforyourcallcenter:

PredictiveDialers

If youare looking to setupanoutboundcall center, thenyoumaywant to consider investing inpredictivedialerswhichcanautodialnumbers fromadatabaseso thatbusynumbersaswellasunansweredcallscanbe filteredoutand liveagent time isonlyspendon livecalls.Again,beforedecidingonthepurchase,acostbenefitanalysishastobedoneonthecostofagenttimesavedascomparedtothecostoftheequipment.

AutomaticCallRecording

If your call center is handling sensitive customer information or if you operate in a sector orgeographywherethereislikelytobeahighpercentageofdisputes,thenitmaybeawiseideatoinvestinautomaticcallrecordingequipment.Thiswillhelptorecordthecalltranscripts,whichcanbeusedforresolvingdisputesaswellasfortrainingagentsonhowtohandlespecificsituations.Itis important to keep inmind that if you use call‐recording equipment, then you need to informcustomers that their callsmaybe recordedandprovide them theoptionof eitherhanginguporbeingexcusedfromtheliverecording.Youmusthaveyourlegalteamaddresstheprivacyrelatedregulationsthatyouwillneedtocomplywithwhileusingcallrecording.

NoiseReductionHeadsets

Acallcenterenvironmentcanbecomeverynoisywiththeconstantcallsattendedbyagentswhomaybeseatedveryclosetoeachother.Noisereductionheadsetsgoa longwayin increasingthe

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productivity of agents as well as improving the customer call experience, as it increases callresponsetimeaswellaspostcall‐processingtime.Sinceagentswouldbeusingtheheadsetsforalongtimeeveryday,lightweight,comfortableheadsetsaretheoptimalchoice.

3.5 PlanningDataAvailabilityandTechnicalIntegration

Dataarchitectureisakeyelementtoconsiderwhensettingupacallcenter.Whilethismaynotbenecessary in the business plan that youmay submit to a financial institute for funding, it is anessentialpartof youroperationalplanand itdirectlyaffects the costof technology that youwillincurinsettingupyourcallcenter.Ifyouarenotrunningacaptivecallcenter,thendataaccessandintegrityisevenmorecriticalandyouwillhavetodesignyoursysteminsuchawaythattheagentshaveaccesstoinformationonastrictlyneedtoknowbasis.Someofthekeyfactorstokeepinmindwhiledesigningthedataandserverarchitectureandinformationsecuritypoliciesaregivenbelow:

1. Locationofdataservers

2. Ownershipofdatabeingused

3. Integrityofexistingdata

4. Ways topreventduplication and reconciliationproblemswhenagents access andmodifydata

5. Accesscontrolmethods

If you areplanning to setupa thirdparty call center to servemultiple clients, then youneed toestimatewhatpartof the ITcostsyouwould incurandwhatpartof thecostwouldbebornebyyourclients.Youwouldalsowanttodecideontheservice levelsofuptimethatyouplantoofferyourclient,asthatwoulddeterminetheamountofredundancythatyouwillhavetobuildintothesystemarchitecture.

YouwouldalsoneedtodeterminethekindofCRMsystemthatyouwanttousetoprovideagentswith customer information needed to handle calls effectively. In addition to the customerinformation,thesystemthatyouchooseshouldbeabletoautomaticallytracktheoutcomeofacallandtimestampthecall.Follow‐upactionshouldbeseamlessly integrated intothesystem.Today,severalvendorsofferthiskindofsoftware,andyoucanchoosetheonethatbestmeetsyourneedsandyourbudget,keepinginmindthefollowingcriteria:

Relationshipmanagementfeatures

Responsetime

Easeofuse

Compatibilitywithotherhardwareandsoftwaresystems

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Callroutingandschedulingfeatures

Vendorsupportfortrainingandmaintenance

If the parent organization is willing to share the customer databases and allow direct access toinformation,thenyouwouldonlyneedtosetupaninterfacetothecustomerdatabasefromyourcallcenterITsystem.

Awell‐maintainedandrobustcustomerdatabaseisevenmorecritical inthecaseofanoutboundcallcenter. If thecustomerdatabase, transactiondatabaseof theparentorganizationandthecallcenterdatabasecanbeinterlinked,thenitcanbeapowerfultoolfortheparentorganizationinthefollowing areas: customer segmentation, targeting, product design, and developing marketingstrategies.

3.6 InvolvingKeyStakeholdersinthePlanningStage

Whilesettingupacallcenter, it is importantthatyouinvolvethekeystakeholdersfromanearlystage. This will help to make your business plan as robust as possible and would the topmanagementteamownershipoftheplan.Ifyouareplanningtosetupatotallynewcallcenter,thenyoumusthirethecallcenteroperationshead,theITheadandtheHRheadbeforeyoufinalizeyourbusinessplan.Thiswillhelptoincorporatetheirideasintothechoiceofequipmentandagents.

Another key stakeholder group who should be involved in the planning stage is your client’scustomerbase.Theseindividualswouldbeutilizingtheservicesofyourcallcenter.Awell‐plannedsurveywouldhelpyoutoidentifythekindofservicestoofferthroughyourcallcenter,aswellasthepreferredtechnologytobeused(suchaswhethercustomersarepositiveaboutIVRandspeechrecognitionorwouldprefertospeakdirectlytoanagent).

3.7 ManagingOperationalCosts

Once the call center is operational, it is essential to be aware of any unplanned cost escalations,which can set theproject financials indisarray. It is essential toput asidea contingency fund toensurethatthecashflowisnotsqueezedshouldsucheventsoccur.Someoftheoperationaleventsthatcanhaveanunplannedcostimpactarelistedbelow:

Costofclientacquisition–thiscansoonspiralintoaverylargenumber,especiallyforthirdpartycallcenters

Manmadeornaturaldisastersthanrequirethebusinesscontinuityplantobesetinmotion

Unexpectedsystemdowntime

Relocationorexpansionduetosuddengrowthinclientbase

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3.8 MakingyourCallCenterFutureReady

Callcenterarchitectureneedstobefuture‐proofed.Changesintheunderlyingtechnologycanproveto be costly in terms of the effort, time, and money spent on change management, technologyenhancements,andre‐skillingagents.Youneedtobeawareofthelatestdevelopmentsinthecallcenterindustryaswellasyourclientindustryinordertomakeyourcallcenterfutureready.Forexample, most financial institutions today offer customers the ability to conduct transactionsthroughmultipleremotechannelssuchasmobile,fax,web,andATM,nottomentionthecallcenteraswell as thebranch itself.The call centerwouldbe increasingly expected to takeover someoftheseremoteservicechannelsandeffectivelymanagetheminfuture.

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4 CallCenterOperationsManagement

Goodoperationsmanagementpracticesareanessentialelementinachievingtheobjectivesofthecallcenter.Thediagrambelowdepictsthekeyaspectsofoperationsmanagementinacallcenter,eachofwhichisdiscussedinsubsequentsections:

KeyElementsofCallCenterOperations

4.1 HumanResourcesManagement

Staffingisthehighestoperatingcostofacallcenter.So,itisimperativetoincorporatestructuredgrowthpathsaswellasretentionstrategiesforagentsandmanagementstaffinthecallcenter.

Call Center Operations

Human Resource

Management

Financial Management

Business Continuity

Account Management & Growth Plans

Quality Assurance

Performance Management

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Aspartoftheoperationsmanagementofthecallcenter,itisessentialtohavedocumentedandwelllaidoutprocessesandpoliciesforthefollowingHRactivities:

1. Recruitment

2. Training

3. StaffWelfare–HealthandSafety,LeaveandBenefits

4. CompensationStructuring

5. PromotionsandCareerPaths

6. Separation

7. Staffdiscipline

Motivation and retention strategies should also be well thought out based on a scientific costbenefitanalysis.It isessentialtorecognizetheimportanceofagentsandmanagersinhelpingthecallcenterachieveitsstatedobjectivesandgoals.Someofthekeyareasarelistedbelow:

StaffTraining

Stafftrainingisanessentialpartofcallcentersuccess,ascallersperceivetheagentsasthefaceoftheparentcompany.Therefore,allocatingadequatebudgetandtimeforstafftrainingisessential.Someofthekeyareasoftrainingcanbe:

TechnicalSkillsandProductKnowledge

CallHandlingEtiquette

CommunicationSkills

NegotiationandSalesSkills

StressManagement

UseofITsystems

Familiarizationofthepoliciesandprocessesofthecallcenter

Teamleadersandmanagersneedtobetrainedonaspectssuchasqualityassurance,monitoringofperformancemetrics,andstaffmanagement.

Trainingplaysakeyroleinimprovingagentperformance,andthereshouldbeaplannedinduction‐trainingprogramforallagentswhojoinyourcallcenter.Youmustbudgetforannualtrainingcostsinyourstaffplanandfinancialprojections.

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CareerProgression

Inordertomaintainthequalitylevelsandservicestandardsofthecallcenter,itisimportantthatyou have a documented career progressionplan for agents tomove to the level of team leadersbasedonalistofskillsthattheyneedtoacquire.Acompetencybasedassessmentandperformancemanagementsystemneedstobedesignedandimplementedin linewiththeobjectivesofthecallcenter. Some of the key metrics that can be measured include call quality, understanding ofbusiness processes and keyboard speed. Youmust also train team leaders to provide immediatefeedback to agents rather than waiting until the formal appraisal period. A well‐defined careerprogression path should be designed and communicated to agents, so that attrition rates canbeminimized.

StaffRetention

Staffretentionhasbeenamajorchallengeincallcenteroperationsallacrosstheglobe.Hence,youneedtopayspecialfocusonthisaspectwhilecreatingyourcallcenterbusinessplan.Often,thelackofcareerprogression,themonotonousnatureofwork,andtheoddworkhourshavebeencitedastopreasonsforhighstaffturnover.

To avoid the monotonous nature of work the following aspects need to be taken care of whilerecruitingandtrainingstaff:

Providejobrotationbetweencustomerfacingandbackendoperations

Providejobrotationbetweendifferenttypesofactivities

Trainstafftobemulti‐skilled

CompensationandBenefits

While designing the compensation and benefits package of staff, make sure that you includeperformance‐linked incentivesso thatagentsareencouraged toconsistentlyachievehighqualityperformance. Bonus payouts should be linked to the performance metrics that the call centertargets to achieve.Team leadsandmanagers shouldalsobeofferedvariablepaybasedon theseparameters,sothattheorganizationalobjectivesaswellastheindividualobjectivesareinperfectalignment.Onekeyaspecttokeepinmindwhiledesigningthecompensationandbenefitspackageisthatitshouldnotonlyencourageindividualexcellence,butitshouldalsomotivateagentstoworktogetherasateam.

Creatinga funenvironmentatwork isan important factor toretainagents.Youmaywant tosetaside a fixed monthly budget for conducting staff wellbeing activities such as celebrations andmotivationalevents.

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4.1.1 MinimizingStaffCosts

Inordertominimizestaffcosts,youmayalsoconsiderhiringtemporaryemployeestohandlepeakloads.Thisisespeciallyrelevantforcallcenterswherethereisahugevariationinpeakload.Itwillalsohelptohaveaplaninplacetoabsorbhighperformingtempsintothepermanentrolesofthecompany. The recruitment and selection strategy should be designed in such a way that youminimize attrition rates among staff, which will directly result in cost savings in the area ofrecruitmentandtraining.

4.1.2 StaffRosteringandScheduling

Whilepreparingthebusinessplanforyourcallcenter,paycloseattentiontothestaffrosteringandschedulingaspects.Youneedtodecideonwhetheryouplantoofferremoteworkingoptions(whichtranslatestolowerinfrastructurecosts),whatpercentageofstaffwouldyouwanttobetemps,andwhetheryouwanttooperateinshiftstocatertoyourclientoperationsinremotelocationsordifferenttimezones.Studieshaveshownthatshortershiftsaredirectlyproportionaltoincreasedagentproductivity.Forexample,ifyouoperateasix‐hourshift,thenyouneednotallocatetimeforlunchandcoffeebreaks,unlikeinthecaseofaneight‐hourshift.Weekendworkshouldideallybescheduledwithtempstaff,thusallowingpermanentstaffamorebalancedworklife.

Ifyouplantohaveacallcenterwithmorethanfifteentotwentypermanentagents,thenitwouldbeagoodideatoinvestinworkforcemanagementsoftwaretohelppreparestaffrostersaftertakingintoconsiderationalltherelevantvariables.Thiswouldhelptosavetheteamleader’sandmanager’stimethatwouldotherwisebespentoncreatingmanualrosterswhichneedfrequenttweakingbasedonleaveandloadvariations.

4.2 BusinessContinuityPlanning

Oneof the key success factors of a call center is the ability to offer continuous service.Businessplansshouldhaveenoughredundancybuiltinatvariouslevelstohandleservicedisruptionsduetofactorssuchastechnologyfailureorstaffabsenteeism,nottomentionunforeseeneventssuchasenvironmentaldisastersorfire.

Aseparatebusinesscontinuityplanneedstobedevelopedtoensurecontinuousservicedelivery.Oneoftheexpensesrelatedtobusinesscontinuityplanningistheestablishmentofanalternatesitethatcanbeusedduringnormalperiodsasa trainingcenter. Itcanalsoserveasasecondarycallcenter towhich calls can be routed in the event of an unexpected increase in call volumes. TheprimarysiteshouldalsohaveredundanciesinthetelephoneandITequipment.

Oneofthemostcosteffectivewaystoensurestaffredundancyistohaveapooloftemporarystaffthat arewell trained in all operations and can be quickly deployed to the alternate sitewhen adisasteroccurs.

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It is also important that the business continuity plan is regularly tested and kept up‐to‐date tomatchwiththegrowthofthecallcenter.Simulationteststochecktheeffectivenessofthebusinesscontinuityplanneedtobeconductedregularlytomakenecessarychanges.

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5 CallCenterPerformanceMetrics

Itisimportanttofocusonqualityandproductivityfromthefirstdayofoperations.Thus,itisimportanttoidentifythekeyperformancemetricsthatyouwouldtrackregularlyandthelevelsthatyouaimtoachieve.Thesemetricsalsohaveadirectimpactonthekindoftechnologyinfrastructurethatyouwouldselectaswellastheskilllevelsofagentsthatyouwouldhire.Bothinternalproductivitymeasuresaswellascallersatisfactionmeasuresmustbetrackedandmonitoredregularly.ArecentGartnerstudyhasidentifiedthefollowingindustrystandardsforkeymetricsinthecallcenter:

Averagecallwaittime:<20seconds

%ofcallsansweredwithintheaveragecallwaittime:>80%

Calldroprate:<5%

Agentavailability:>99%

Firstcallresolution:>95%

%oftimespendoncalls:83%

Averagecallduration:187seconds

Staffturnover:22%

Averagelengthofserviceofagents:27%

Agent:TeamLeadRatio:13:1

AverageTrainingTime:27daysperyear

Dependingonyourcapabilitiesaswellasclientrequirements,youmustsetyourowngoalsforeachoftheseparametersandmonitoryourperformanceagainsttheseondaily,weekly,monthly,andquarterlylevels.Comparingyourperformanceagainstindustrybenchmarkswouldhelptoidentifyareasofimprovement.

KeyPerformanceIndicatorsmeasuretheeffectivenessofhandlingcalls,whichtranslatetoservicedeliveryexcellence.InadditiontotheseKPIs,youmustalsomonitorthecostpertransactionaswellastheearningsperagentasthiswouldhelpyoupriceyourcontractseffectively.

5.1 AgentPerformanceMeasurement

Oftenagentperformanceismeasuredquantitativelyintermsofthenumberofcallsperhour,averagecalltime,averageprocessingtimeandsoon.However,itisimportanttoreviewthecall

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recordsinordertoidentifyareasofimprovementfortheagentintermsofqualityofclienthandling.

5.2 OtherPerformanceIndicators

Some of the other performance indicators that youmust track for your call center include staffsatisfaction levels and leave levels. Professionally developed questionnaires should be used formeasuring the organizational climate so that corrective action can be taken in areas such asperformancemanagement,teamleaderroles,andcompensationandbenefitsprograms.

5.3 PerformanceReportingtoClients

Ifyouoperateathirdpartycallcenter,itisimportanttoreportyourachievementsagainstSLAs,whichwouldbedocumentedinthecontract.YourinternalKPIsneedtobemorestringentthantheSLAsinordertomakesurethatyoudonotfacethepenaltiesassociatedwithbreachofSLAs.Today,advancedcallcenterITsystemshaveintegratedMIScapabilities,makingperformancemonitoringandreportingofquantitativeparametersaneasytask.However,thechallengeistobeabletomeasurethequalitativeaspectsofagents’callhandling.

Inadditiontoreportingperformancetoclients,theseparameterscanalsobeusedtosetandmonitorinternalqualitygoals.StrategiestoimproveperformanceoneachoftheKPIsneedtobedevisedandincorporatedforthecallcentertoremaincompetitive.Itisalsoimportanttoachievethefinebalancebetweenthequalitativeparametersandthequantitativeparametersthatmayoftenbeinconflictwitheachother.

Someofthetechniquesinwhichqualityofcallsandcustomersatisfactionwiththeagentscanbemeasuredarelistedbelow:

1. Callmonitoring

2. CustomerSurveys

3. MysteryCalling

4. Benchmarking

5. ProcessesandPolicies

CallMonitoring:Callmonitoringstrategieshelptoevaluateagentsonarealtimebasisandcanbeausefultooltoidentifytrainingneedsofspecificagents.Itcanbedoneusingvariousmethodssuchassilentcallmonitoring,doublejackingorwiththehelpofcallrecordingtechnology.Advancedcallrecordingequipmentcomeswiththeabilitytotrackandanalyzecallpatternsandvoicetones.

Youmusttakecaretousecallmonitoringinajudiciousmanner.Usingcallmonitoringfornegativeaspects such as disciplinarymonitoringmay result in unmotivated staff,whichwould ultimately

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negatively impact thesuccessofyourcall center.Someof thekeyelements thatmustbe trackedusingcallmonitoringincludethefollowing:

1. GreetingandAcknowledgement

2. CallEtiquette

3. EffectiveListening

4. VoiceTone,PitchandAccent

5. PositiveAttitude

6. KnowledgeofProductsandServices

7. CallResolution

Teamleaderscanmakeuseofastructuredevaluationformtomonitoragentperformanceandgivefeedback.

Customer surveys,mystery calling, andbenchmarkingagainst competitionare someof theotherwaysinwhichqualitativeparameterscanbetrackedandmonitored.

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6 ProjectFinancials

Yourcallcentermayhaveaservice focusorasales focusor itmaybeacombinationofboth.Nomatterwhatthenatureandsizeofyourcallcenter,prudentfinancialmanagementisanessentialfactorforthesuccessofthecallcenter.Itisessentialthatsufficientthoughtisspentinarrivingatthefinancialsforat leastthefirstthreeyearsofoperations.It is idealtohaveamonthlyfinancialprojection for the firstyearofoperationas that iscrucial in termsofanycoursecorrections thatyoumaywant tomake.Thekeyelements that contribute to theproject financials areyour salesplan,yourpersonnelplan,andyourtechnologyroadmap.

According to a study by the Gartner group, a typical call centerwould spend almost 65% of itsoperational budget on staff costs, 18% on network costs, 8% on equipment costs, and 7% onfacilities.

6.1 Start‐UpExpensesandFunding

The first step in arriving at the project financials is to calculate the startup expenses and initialfunding availability. Startup expenses include infrastructure expenses aswell as cash needed tosustainoperationsuntilthecallcentergeneratessufficientoperationalrevenue.Initialfundingcanbeintheformoffounders’equitycapital,bankloans,orfundingfromprivateinvestors

Asampletemplatethatcanbeusedtocalculatestartupexpensesisgivenbelow:

Start‐upExpenses Value

Legal&Insurance A

HiringExpenses B

Rent&Utilities C

Equipment D

Accounting E

Marketing F

Others G

TotalStart‐upExpenses(K) K=A+B+C+D+E+F+G

Start‐upAssets

CashRequired L

CurrentAssets M

Long‐termAssets N

TotalAssets(O) O=L+M+N

TotalFundingRequired(P) P=K+O

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Onceyouhavearrivedatthestartupexpensesandthefundingrequired,thenextstepistoarriveatthe source of funds. The following template can be used as a guideline to arrive at the fundingdetails:

TotalFundingRequired P

Assets

Non‐cashAssets M+N

CashRequirements L

AdditionalCashRaised Q

CashBalanceonDay1ofOperations L+Q

TotalAssets O+Q

LiabilitiesandCapital

Liabilities

CurrentBorrowing R

Long‐termLiabilities S

OutstandingBills T

OtherCurrentLiabilities U

TotalLiabilities(X) R+S+T+U

Capital

PlannedInvestmentfromFounders V

AdditionalInvestments W

TotalPlannedInvestment V+W

LossatStart‐up(Start‐upExpenses) K

TotalCapital(Y) V+W‐K

TotalCapitalandLiabilities X+Y

6.2 SalesPlan

Adetailedsalesplanneedstobedrawnupforthecallcenter’sinitialyearsofoperation.Revenueprojections can bemade based on the expected call volume per client aswell as the number ofclientsthatthecallcenterexpectstohandle.Contractswithclientscaneitherbeforafixednumberofagentsorforafixednumberofcallshandled.Thesalesplanshouldtakeintoaccountexpectedrevenuesfromthecallcenter’svariousserviceofferings.Itshouldalsoincludetheexpectedcostof

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client acquisition, if it is a thirdparty call center.Before creating the salesplan, it is essential toidentifythemarketsegmentsinwhichyouplantooperate.Typicallyspecializedcallcenterssuchasthosehandlinghigh‐endtechnicalareasorspecializedfieldssuchaslegalormedicalwill fetchbettermarginsthanasimplehelpdeskoperation.

6.3 PersonnelPlan

Thepersonnelplancanbederiveddirectlyfromthecallcentersizingexercise.Thepersonnelplanshould includeexpectedheadcounts forvarious levels suchasagents, team leads,managers,andseniormanagementoveraperiodofthreetofiveyears.Salaryexpenses,recruitmentandtrainingexpenses,andstaffwelfareexpensesshouldbeincludedinthepersonnelplan.

6.4 FinancialPlan

Thefinancialplanshouldbedocumentedaftertakingintoconsiderationinterestratesandinflationnumbers.Abreak‐evenanalysis,projectedcash flows,profitand loss statementsandaprojectedbalance sheet need to be documented. From a financial management perspective, thesecomponents, along with obtaining funding from private investors or financial institutions, areimportantaspectsofabusinessplan.

6.4.1 BreakEvenAnalysis

Thebreakevenpointforthecallcenteroperationsisthepointatwhichthenetincomingcashflowishigherthanthenetoutgoingcashflow.Itisimportanttospreadoutthestaffcostsandotheroperationalcostsinsuchamannerthatthebreakevenpointisreachedasearlyaspossible.Thecallcenteroperationswouldbecomeself‐sustainableonlyafterthebreakevenpointhasbeenreached.

6.4.2 ProjectedProfitandLoss

Asampletemplateforarrivingattheprofitandlossprojectionsisgivenbelow:

Year 1 2 3 4 5

Particulars

Income

Revenuefromclientcontracts R1

CostofSales C1

GrossMargin R1‐C1

Expenditure

FixedOperatingExpenses ‐ ‐ ‐ ‐ ‐

PersonnelExpenses P1

MarketingandAdvertisingExpenses M1

RentExpenses RE1

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Utilities U1

Insurance I1

Travel T1

Other O1

TotalOperatingExpenses(OE) OE=P1+M1+RE1+U1+I1+T1+O1

Profitbeforedepreciation,interestandtax(PBDIT)

R1‐C1‐OE

Less:Depreciation D1

Profitbeforeinterest&tax(PBIT) PBDIT–D1

Less:ProvisionforInterest Int1

ProfitBeforeTax(PBT) PBIT–Int1

Less:Provisionfortaxes Tax1

ProfitAfterTax(PAT) PBT‐Tax1

6.4.3 ProjectedCashFlow

Theprojectedcashflowcalculationshelpyoutoidentifyanycashflowproblemsthatcanchoketheoperationsofanybusiness,includingyourcallcenter.Asampletemplatetoarriveattheprojectedcashflowisgivenbelow:

ProFormaCashFlow

Year1 Year2 Year3

CashReceived

OperationalCashInflow

CashSales

CashfromReceivables

CashfromOperations

CashInwards

TaxRefundsReceived

NewCurrentBorrowing

NewLiabilities

SalesofCurrentAssets

SalesofCapitalAssets

NewInvestments

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CashReceived

Expenditures

OperationalCashOutflow

CashExpenses

CashBills

OperationalExpenses

OtherCashExpenses

TaxesPaidOut

PrincipalRepaymentofCurrentBorrowing

OtherLiabilitiesPrincipalRepayment

Long‐termLiabilitiesPrincipalRepayment

CurrentAssetsPurchase

CapitalAssetsPurchase

Dividends

SubtotalCashExpenses

NetCashFlow

CashBalance

6.4.4 ProjectedBalanceSheet

Aprojectedbalancesheetmaybepreparedfortheinitialyearsofoperation.Asampletemplateisgivenbelow:

ProFormaBalanceSheet

Year1 Year2 Year3

Assets

CurrentAssets

Cash

AccountsReceivable

OtherCurrentAssets

TotalCurrentAssets

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CapitalAssets

CapitalAssets

Depreciation

TotalCapitalAssets

TotalAssets

LiabilitiesandCapital

CurrentLiabilities

AccountsPayable

CurrentBorrowing

Others

TotalCurrentLiabilities

Long‐termLiabilities

TotalLiabilities

Paid‐inCapital

RetainedEarnings

Earnings

TotalCapital

TotalLiabilitiesandCapital

NetWorth

6.4.5 BusinessRatios

Itisimportanttoprojectkeyfinancialratiosandcompareitagainstindustrystandardstoverifywhetheryouroperationsaremaintainedatahealthyfinanciallevel.Thiswillalsohelpyoutotakecorrectiveaction,shouldyounoticeanydifferenceinyourprojectedratios.Givenbelowisalistofkeyratiosthatyoumaywanttotrackandmonitor:

BusinessandFinancialRatios

Year1 Year2 Year3 IndustryLevels

Y‐o‐YSalesGrowth 8.79%

PercentofTotalAssets

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AccountsReceivable 28.12%

OtherCurrentAssets 44.18%

TotalCurrentAssets 76.27%

CapitalAssets 23.73%

TotalAssets 100.00%

CurrentLiabilities 38.61%

Long‐termLiabilities 13.60%

TotalLiabilities 52.21%

NetWorth 47.79%

PercentofSales

GrossMargin 100.00%

Selling,General&AdministrativeExpenses 82.68%

AdvertisingExpenses 1.66%

PBIT 1.37%

MainRatios

Current 1.59

Quick 1.22

TotalDebttoTotalAssets 3.09%

Pre‐taxReturnonNetWorth 60.22%

Pre‐taxReturnonAssets 7.76%

AdditionalRatios

NetProfitMargin

ReturnonEquity

ActivityRatios

AccountsReceivableTurnover

CollectionDays

AccountsPayableTurnover

PaymentDays

TotalAssetTurnover

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DebtRatios

DebttoNetWorth

CurrentLiab.toLiab.

LiquidityRatios

NetWorkingCapital

InterestCoverage

AdditionalRatios

AssetstoSales

CurrentDebt/TotalAssets

AcidTest

Sales/NetWorth

DividendPayout

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7 References

1. ICTStrategicPlanfortheMalaysianPublicSector:Standards,PoliciesandGuidelinesforEstablishingaCallCenterVersion1:March2004.

Documents

Call Center Business Plan - Call Center Service · PDF file6.1 Start‐Up Expenses and Funding ... A key step in starting a call center is preparing a business plan. This must cover