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Reengineering Call Centers : How to Choose between Reengineering and Continuous Improvement
by Jeff Hiatt
Author of "Winning with Quality", Addison-Wesley Longman, 1995.
Business Process Reengineering (BPR) offers call center managers opportunities for
operational improvements and cost savings. In many call centers, both Customer Service and
Operational Performance can be greatly improved with reengineering. This paper summarizes
the challenges for call center managers today in the areas of operating costs, service
levels and new technology, and discusses the potential for reengineering to allow managers
to break out of the traditional cost vs. service trade-off. A comparison is also drawn
between reengineering and continuous process improvement to help determine when
reengineering should be used in call centers.
The Balance between Lower Operating Costs and Improved Customer Service
Call center managers today face common issues around escalating operating costs, rising
call volumes, longer talk times, and growing customer dissatisfaction with service levels.
Because service has become a critical competitive factor, the need to improve
responsiveness and deliver high quality service is greater now and needed faster than ever
before. For many companies, service is their call center.
Keeping up with the changing market place is proving a challenge for many call centers.
The need to reduce operating costs seems contrary to improving customer service. When
addressing lower costs, the immediate choices include shorter talk times and fewer
employees. In other words, get customers off the phone quickly, and let them live with
longer hold times.
On the other hand, excellent customer service requires short hold times and adequate
time spent with customers. In a traditional call center, this implies more employees and
less pressure on agents to get customers off the phone. On the surface it appears that
this in a no-win scenario -- and is in fact a constant battle for many call center
managers.
To complicate matters, call times are increasing for many call centers as their
company's products (software and hardware) grow in complexity. In our multiple-application
software rich environments, the end-user customer requires more assistance to help resolve
problems -- and this translates to longer talk times and increased loads on call centers.
The Role of Reengineering in Call Centers
In a model of continuous improvement, call center managers have difficulty breaking out
of this no-win scenario. Everyday managers trade-off cost and customer service. Even with
the best quality improvement techniques and special improvement teams, progress is limited
to incremental improvements that do not keep pace with rising customer demands.
Call centers that have adopted reengineering have begun to break the cycle and expand
their view of call center operations. After reengineering their call center, they have
more options than the standard trade-off between cost and customer service. The model of
the call center as a "voice-only live agent" operation is being replaced by new
ways to deliver excellent customer service through the call center. Business Process
Reengineering is playing a key role in this transition.
Comparing Reengineering and Continuous Process Improvement in Call Centers
Continuous Process Improvement and Reengineering are fundamentally different approaches
for improving business performance. The figure below illustrates the basic steps for
continuous process improvement. The process begins by documenting what you do today. You
then create measures to assess your performance based on business needs and customer
requirements. As you execute the process, you monitor your performance over time. The
performance results are reviewed, and opportunities for improvement are identified. You
then design and implement process improvements, and measure the performance of the
modified processes. This loop repeats over and over again, and is called continuous
process improvement. You might also hear it called business process improvement,
functional process improvement, etc.
This method for improving business processes is effective to obtain gradual, incremental improvement. It is limiting in that the improvement efforts are often internally focused and targeted at sub-processes within the overall process. They are by nature smaller efforts. Most importantly, they do not impact the call center paradigm. They do not change how people think about their work, their customers, and their business overall.
However, over the last 10 years several factors have created a need for a new approach to improve business processes. The most obvious driver is technology. New technologies (like the Internet) are rapidly bringing new capabilities to businesses, thereby raising the competitive bar and the need to improve business processes dramatically.
Another driver is the opening of world markets and increased free trade. Such changes bring more companies into the marketplace, and providing "expected" service levels becomes more difficult. In this marketplace, major changes are required to just stay even with the competition. It has become a matter of survival for most companies.
As a result, companies have sought out methods for faster business process improvement. Moreover, companies want breakthrough performance changes, not just incremental changes, and they want them quickly. Because the rate of change has increased for everyone, few businesses can afford a slow change process. One approach for rapid change and dramatic improvement that has emerged is Business Process Reengineering (BPR).
BPR relies on a different school of thought than continuous process improvement. In the extreme, reengineering assumes the current process and paradigm are irrelevant - it doesn't work, it's broke, forget it. Start over. Such a clean slate perspective enables the designers of business processes to disassociate themselves from today's process, and focus on questions like,
"Why are we in business?",
"What do our customers really want?" and
"If I had to design it from scratch, how would I design my work processes and tools to deliver excellent customer service AND be cost effective?"
Such an approach is pictured below. It begins with defining the scope and objectives of
your reengineering project, and then going through a learning process (with your
customers, your employees, your competitors and non-competitors, and with new technology).
Given this knowledge base, you create a vision for the future and design a totally new
business paradigm and business process model. Given the definition of the "to
be" state, you can then create a plan of action based on the gap between your current
processes, technologies and structures, and where you want to go. It is then a matter of
implementation and careful change management.
Business Process Reengineering enables call center managers to break out of the no-win
scenario, separate themselves from today's immediate problems, and innovate. The results
can be dramatic improvements in both operating costs and customer service.
Examples of Paradigm and Process Changes from Reengineering Call Centers
The following list represents some of the mindset changes that can occur from
reengineering your call center:
Old Thinking: We are here to answer the phone.
New Thinking: We are here to create excellent customer service.
Old Thinking: Customers want us to help them with every problem.
New Thinking: Customers want options to help themselves.
Old Thinking: Our call center consists of customer service representatives and a phone
system.
New Thinking: Our call center consists of all the tools and people needed to deliver
excellent customer service.
Old Thinking: The call volume handled by our agents is controlled by our customers.
New Thinking: We can impact how many calls we take with agents vs automated support tools,
including the ability to eliminate "bad" or misdirected calls.
Old Thinking: We control how customers interact with our service process.
New Thinking: Our customers choose how they want to be serviced.
Why are these shifts in paradigm so significant, even when on their face they seem
obvious and common sense? Because when a call center uses principles like these to develop
their processes and systems, the possibilities and choices are no longer cost vs. service.
The choices are:
Entry options ranging from traditional voice, email, internet forms, web-triggered calls, fax, and video.
Desktop tools including knowledge based systems (AI), electronic documentation, new contact management applications with CTI, and screen-based telephony.
Infrastructure options ranging from traditional telephone switches to a new generation of fully integrated server-based environments that will be able to handle universal queuing and routing of multimedia, including electronically received requests.
Resource locations ranging from home agents to centralized or decentralized centers
Service options ranging from full self-help or assisted service via the Internet, voice
response units, fax-back systems, and electronic technical support forums.
Is reengineering right for your call center?
Reengineering may not be the right tool for you right now. The value of reengineering your call center can be found in the new ways to think about old problems. Some criteria you may use to assess if reengineering is right for you include:
Your organization is performing below expectations in critical areas for business
success (operating costs, customer satisfaction, quality of goods or services, etc.), and
no obvious solution is apparent.
Call volumes are rising out of control along with operating costs.
It is unclear how to choose between many new technologies and applications.
Customers are dissatisfied with your service despite many attempts to improve processes
and tools.
You have embarked on a initiative to produce breakthrough results for your
organization.
Conclusion
Business Process Reengineering (BPR) offers call center managers an opportunity to break out of the no-win scenario of cost vs. service trade-off and enables them to consider different ways to deliver cost effective customer service. Given the strategic importance of "service" as a competitive factor, reengineering call centers is becoming an important improvement strategy for many companies.
About the Author
Jeff Hiatt is co-author of the new book, "Winning with Quality", and specializes in the areas of business process reengineering and change management. He has been the project manager for reengineering projects ranging from 3 to 70 people, with project investments up to $25 million. He has taught and implemented process management and reengineering techniques at Bell Laboratories since 1986, and has been a guest speaker at professional conferences, the University of Denver, and the University of Colorado. Mr. Hiatt has extensive practice in implementing process management and business process reengineering with work in the United States and Europe. His work experience includes projects in customer service call centers, manufacturing, and product development. He is the editor and founder of the BPR (Business Process Reengineering) On-Line Learning Center on the internet sponsoring continuing education in business process reengineering and change management.
REENGINEERING INFORMATION SOURCES
[BPR] On-Line Tutorial Series
Reengineering Tutorial Series for Reengineering Teams
http://www.prosci.com/mod1.htm
[BPR] Document Templates
Document Templates and Presentation Outlines for Reengineering Teams
http://www.prosci.com/toolkit.htm
Enabling
Role of EDI in Business Process Re-Engineering, The
Bob Roberts, Kingston University, Gregg Flight, GE Information Services
http://infosys.kingston.ac.uk/isschool/Staff/Papers/Roberts/EDI_BPR.html
Enterprise
Information Systems Integration and Business Process Improvement
Empirical Study, Ganesh D. Bhatt; Management Department; Southern Illinois University
Carbondale
http://hsb.baylor.edu/ramsower/acis/papers/bhatt.htm
Hocus-Pocus of
Reengineering,
Paul A. Strassmann; Across The Board; June 1994
http://www.strassmann.com/pubs/hocus-pocus.html
IPG Publications
THE INFORMATICS PROCESS GROUP AT MANCHESTER UNIVERSITY - active modeling of
organization processes. Articles listings provided.
http://www.cs.man.ac.uk/ipg/publications.html
examples:
http://www.cs.man.ac.uk/ipg/Docs/pmover.html
Process Analysis and Design
Methodology (PADM)
Compressed file that can be downloaded from IPG homepage.
http://www.cs.man.ac.uk/ipg/index.html
Model Management
Approach to Business Process Reengineering, A
Levent V. Orman; Cornell University
http://hsb.baylor.edu/ramsower/acis/papers/orman.htm
Reengineering by
Paul A. Strassmann; excerpted from The Politics of Information Management;The Information
Economics Press, 1995
http://www.strassmann.com/pubs/reengineering.html
Re-engineering of Business
Processes in Multinational Corporations
Prof. Dr. Michael Kutschker; Katholische Universitat Eichstatt, Germany
http://www.gsia.cmu.edu/bosch/kut.html
Teaching About
Reengineering
Thomas H. Davenport
http://hsb.baylor.edu/ramsower/acis/papers/davenpor.htm
Related Book References
Wensley Book
reviews
(wensle@fmgmt.mgmt.utoronto.ca)
http://www.mgmt.utoronto.ca/~wensle/reviews/revindx.htm
Winning With Quality: Applying Quality
Principles In Product Development
John W. Wesner, Jeffrey M. Hiatt, and David C. Trimble; authors go beyond theory into
real-life application of quality concepts (TQM) and process improvement (BPR) in product
development.
http://aw.com/cp/wesner-etal.html
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