The challenges of the current economy are forcing enterprises to rethink their approach to customer service as customer retention comes to the fore. Enterprises must align contact center operations to new corporate objectives while keeping costs low. In the contact center, complexities have vastly increased with the growing number of communication channels, such as phone, Web, SMS, email and web chat, which make customer service more difficult to manage. Business agility is paramount as enterprises strive to maintain the right balance in keeping customer satisfaction high and operational costs low. Enterprises face the ongoing challenge of balancing efficiency and effectiveness, particularly in a down economy where efficiency more naturally becomes the focus. Using workforce optimization technologies (WOTs) to maintain a closer equilibrium between efficiency and effectiveness places the business in a healthy position and leaves it well positioned for when the tide changes.

1. Contact Center Optimization in a
Challenging Economy
A Datamonitor white paper Sponsored by
Publication Date: August 2009
INTRODUCTION
The challenges of the current economy are forcing enterprises to rethink their approach to customer service as customer
retention comes to the fore. Enterprises must align contact center operations to new corporate objectives while keeping
costs low. In the contact center, complexities have vastly increased with the growing number of communication channels,
such as phone, Web, SMS, email and web chat, which make customer service more difficult to manage. Business agility is
paramount as enterprises strive to maintain the right balance in keeping customer satisfaction high and operational costs
low. Enterprises face the ongoing challenge of balancing efficiency and effectiveness, particularly in a down economy
where efficiency more naturally becomes the focus. Using workforce optimization technologies (WOTs) to maintain a closer
equilibrium between efficiency and effectiveness places the business in a healthy position and leaves it well positioned for
when the tide changes.
WOTs, also known as 'WFO', help enterprises use the contact center strategically, rather than just as a hub to field calls.
WOTs encompass a number of different applications, all with the common purpose of improving efficiency and
effectiveness in the contact center. Call recording, quality monitoring, workforce management, contact center analytics and
eCoaching all fall under the broader WOTs category.
Over the past five years, WOTs have evolved as enterprises require a deeper level understanding of the customer, as well
as greater efficiency in the contact center. WOTs comprise a greater number of features and functions today than those of
five years ago. Enterprises typically purchase WOTs as an integrated suite solution rather than as individual point solutions.
At the same time, vendors have developed new technologies, including speech analytics, desktop analytics, and automated
customer surveys that may be added to WOTs suites as needed.
This white paper serves as a guide for enterprises looking to find the proper balance between efficiency and effectiveness
in the contact center, which should be ultimately reflected in increased profitability and improved strategic position in the
marketplace. It will enable readers to:
• Identify key market trends that are shaping customer service;
• Understand the challenges of balancing efficiency and effectiveness in the contact center;
• Gain perspective into how WOTs can help enterprises manage efficiency and effectiveness;
• Learn about Datamonitor’s strategic recommendations for enterprises deploying WOTs solutions.
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2. Contact Center Optimization in a Challenging
Economy
THE CURRENT CONTACT CENTER ENVIRONMENT
In response to economic pressures and reduced consumer spending, the contact center landscape has evolved.
Enterprises recognize that while cost efficiencies are important, customer service and the contact center play a significant
role in improving customer retention. When new customers are hard to come by, satisfaction among existing customers
becomes the key to a successful business during a difficult economy. Contact centers must link themselves more tightly
with the rest of the enterprise in order to reduce informational silos and to provide customers with accurate information.
There are a number of trends influencing contact center’ strategies and technology purchasing decisions:
• Enterprises have cut their technology spending – Unsurprisingly, the economic downturn has created a dip
in spending and enterprises now have smaller IT budgets. Likewise, consumer confidence has declined along
with consumer spending. As a result, enterprises are reconsidering planned technology investments and trying
to lower capital expenditures. It is important to get the most from existing technology and resources.
• Cutting costs and customer retention are a priority – In a sluggish economy, enterprises focus on customer
retention rather than customer acquisition. Customer service improvements will increase satisfaction, retention
rates and first call resolution. For example, when agents answer customers' queries during the first interaction,
fewer customers will call back into the contact center, and this in turn reduces costs. At the same time, many
enterprises face increasing commoditization of their products and services. In industries such as financial
services and communications, customer service becomes a key differentiator.
• The challenge of efficiency versus effectiveness – In a difficult economy, enterprises focus on cutting costs
which results in a greater focus upon the efficiency of the contact center. By improving metrics such as average
call handle time and cost per call they often neglect customer experience and effectiveness of the interaction.
Contact centers find it difficult to balance both efficiency and effectiveness. Improving customer satisfaction also
drives lower costs: it indirectly assists with customer retention and first call resolution.
• Organizations need better understanding of customers’ reasons for calling – In order to improve customer
retention, reduce costs, and raise customer satisfaction, enterprises need to better understand customers’
reasons for initiating contact. They must monitor agent-customer interactions closely to discover customers'
reasons for calling and ensure customers receive first-rate support. Enterprises also need to equip agents with
the proper tools to handle queries. Managers should monitor agent behavior in order to find skill gaps and
provide the appropriate training. This helps contact centers improve agent performance and provide a better
customer experience.
• As regulations tighten, enterprises must closely monitor information exchange and storage – In response
to the financial crisis, governments have increased regulations, particularly in the financial services industries.
Enterprises need to connect their contact center operations with the back-office to ensure that billing and
customer information are accurate. They must also keep an eye on the way in which agents use and share
customer information. CRM, unified agent desktop and WOTs technology increase efficiency and reduce silos.
Optimization of contact center operations through these tools helps with compliance, liability protection and
quality assurance.
• Distributed contact centers and at-home agents are more common – Enterprises are increasingly using at-
home agents and offshore contact centers. Flexibility in employment locations helps save on costs for work
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3. Contact Center Optimization in a Challenging
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space and offers a wider pool of skilled staff, making it very likely that this trend will continue. However, a
dispersed workforce offers different challenges for enterprises: agents need to be connected and have access to
the same information, regardless of location. At the same time, managers require information on agent locations,
availability and skill-sets in order to schedule their workforce to meet customer demands. Contact centers need
the ability to manage agents working offshore as if they were onshore in order to provide a consistent customer
experience.
EFFECTIVENESS AND EFFICIENCY CHALLENGES FOR CONTACT CENTER OPERATIONS
The following figure represents Datamonitor’s view of the changing contact center environment. The bullet points detail the
challenges and key performance indicators that enterprises use to benchmark contact center performance. The pendulum
is swinging from the boom economy’s focus on effectiveness (quality, customer satisfaction/experience, agent retention) to
the down economy’s focus on efficiency (costs and operations). In the current economic environment, enterprises see
efficiency and customer retention as absolute necessities to remain competitive, whereas in a robust economy, enterprises
use customer experience to drive growth and new customer acquisition.
Figure 1: Effectiveness and efficiency in the changing contact center environment
Effectiveness Efficiency
• Contact quality monitoring score • # contacts offered and handled
Quality
Costs and operations
Costs and operations
• Accuracy (of information, transactions, quotes, • Avg talk time
etc.)
• Avg post-call work / wrap time
• Appropriate use of wrap-up
• Customer survey satisfaction rating • Avg handle time
C.Sat and exp
• Percent of complaint calls • Occupancy rate
• Service levels • Cost per call / email / chat
• Avg speed of answer • Percent of time spent on non-call
• Number of calls escalated to supervisor activities
• Backlog (email) • Contact forecast precision level
• Avg time to resolve email
Agent retention
• Avg number of contacts handled per
• Task completion rates hour
• Call transfer rates
• Abandon rate
• Agent attrition rates
• Automation rates
• Agent absence and vacation percentages
• Employee satisfaction survey rating
Thriving economy Down economy
Source: Datamonitor DATAMONITOR
Historically, enterprises used contact centers to drive sales of new business through cold calling or merely as an
information center to field customer queries. However, the contact center now acts as a strategic customer service center.
Enterprises realize that the contact center is the main point of contact that customers have with their business. It therefore
represents the most visible face of the corporate brand. Initially, enterprises deployed IVR systems to deflect calls and
reduce agent costs. They used metrics such as call handling time and number of calls answered to determine how well
contact centers were performing. This strategy was unsuccessful in building lasting customer relationships as agents were
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4. Contact Center Optimization in a Challenging
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more focused on reducing call time than providing customers with accurate and informative answers. It led to a swing in the
opposite direction to effectiveness and the customer experience. Enterprises looked at ways to improve the agent–
customer relationship and customer satisfaction ratings. However, the focus has begun to swing back to efficiency. The
challenging economy forces enterprises to once again try to reduce the cost per call and agent costs.
Datamonitor believes that successful enterprises must focus on striking a balance between effectiveness and efficiency in
order to succeed in today’s extremely challenging business climate. This balance is the only way to successfully meet
today’s business imperatives including cost reduction, customer retention, doing more with less and risk mitigation. In the
world of contact centers, companies should invest in workforce optimization technologies that help bring efficiency and
effectiveness together. This gives companies a competitive advantage over rivals that choose to focus solely on efficiency
and enables them to better position themselves for the future. When the economy improves, the companies that have
considered both efficiency and effectiveness will be better prepared to focus on customer experience issues.
UTILIZING WORKFORCE OPTIMIZATION TO ADDRESS CHALLENGES
Using WOTs in an economic downturn to balance efficiency and effectiveness
Although enterprises are, by necessity, taking a more tentative approach to IT spending due to trimmed back IT budgets,
they should continue to prioritize contact center investments. Because contact centers act as the primary face of a
company, a poor customer experience reflects badly on the company and the brand. Enterprises must monitor the quality
of interactions to ensure the customer experience is consistent and agents represent the company well. In addition,
enterprises must adopt more stringent risk management processes as a response to increased regulations and compliance
issues. Companies should establish business rules to determine the usage for confidential, high-risk information, such as
credit card details or health records. Investments in analytics, workforce optimization and outbound communications
technologies will help enterprises succeed. The following WOTs technologies will help increase efficiency and effectiveness
in this era of economic uncertainty:
• Interaction recording and quality monitoring (QM) – In many industries, regulations compel companies to
record conversations and assess a select number of calls to ensure that agents are following procedures.
Enterprises should handle customer information with care and store confidential data correctly. Governments
closely monitor and regulate companies in financial services, healthcare and telecommunications. A QM system
helps managers ensure that agents adhere to regulations. Strict compliance requirements make it crucial to
implement fault-tolerant systems for uninterrupted performance and disaster recovery. Even companies in
industries that do not face such stringent regulatory rules still have a need for call recording. Managers can use
the recordings and associated data to monitor agent performance, gain insights into the type and outcomes of
calls handled by contact centers and improve operations. Those enterprises that have already invested in
logging and automated QM should consider deploying additional WOTs, such as workforce and performance
management, to get greater value from call recordings and stored data.
• Workforce management (WFM) – WFM allows enterprises to more accurately schedule staff based on agent
skill sets and customer demand. Contact centers can use the forecasting and scheduling tools in WFM, to better
utilize their workforce and save costs by having the right number of agents working relevant to demand, which is
likely to change depending on peak and off-peak call volumes.
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5. Contact Center Optimization in a Challenging
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• Performance management (PM) – Contact centers deploy performance management to understand and
improve the performance of both agents and teams across multiple departments and geographically dispersed
sites. Scorecards, dashboards and dynamic reports allow managers and supervisors to analyze and understand
the performance of individual agents, teams, groups and the overall contact center. They use PM to consolidate
data from multiple business systems and monitor activity against key performance indicators (KPIs). PM
systems have also been successfully used to increase intra-day productivity of front-line staff by displaying their
personalized KPIs and messages in real time. Enterprises use this technology jointly with WFM and eCoaching,
to assess agent’ skills and to schedule online training sessions to address weaknesses. They can route calls to
those agents that have the most appropriate skill set. Consequently, customers have their queries answered
without any transfers, which improves both first call resolution and customer satisfaction.
• eCoaching – eCoaching applications automatically assign online training to agents to get them up to speed on
areas of weakness. When combined with PM, eCoaching helps contact center managers identify skill shortages
and arrange training through electronic educational material, messages, alerts, and pre-shift announcements
delivered to agent desktops. With personalized eCoaching, agents can better deal with queries and their
performance improves. This creates a better working environment improving staff retention and removing cost
from the business. Advanced eCoaching tools now include rules-based automatic triggering of training delivery,
based on scorecard results. Personalized training is pushed right to the agent’s desk during agent downtime. For
example, if an agent constantly has to refer calls related to billing, the system suggests training on the billing
software and adds it into the agent’s calendar during a convenient off-peak time.
In addition to these technologies, contact centers should consider using real-time and interaction analytics to better
understand their customers. Although these technologies were traditionally thought of as luxuries rather than necessities, in
a time of economic turmoil they help with understanding customer needs and drive greater customer retention. Desktop
analytics, for example, allows enterprises to pull valuable data and screen events from employee desktop applications.
Screen information accessed during the call is associated with each recorded interaction, for accurate interpretation of what
the call was about and its outcome. Leveraging this data, call recordings can be automatically classified and prioritized for
follow-up. When anomalies in call patterns and outcomes are identified, management receives notifications. Automated,
business-goal driven QM systems deliver a sample of the high-value calls and evaluation forms to managers and quality
assurance analysts for analysis, so they can quickly discover and rapidly address problems that plague the contact center.
Integrating QM with interaction analytics allows contact centers to maintain the current sample size of calls for monitoring,
while increasing the business impact.
Desktop analytics is also being used to comply with increasingly complex privacy compliance regulations including PCI-
DSS (Payment Card Industry - Data Security Standard). Desktop analytics can identify calls that contain sensitive
information that should be protected from access or replay by unauthorized users, such as consumers’ credit card
numbers, social security numbers, addresses, phone numbers, references and family members.
Deploying integrated WOTs as part of a suite will provide more value to enterprises
WOTs are becoming more sophisticated and are increasingly sold as integrated suite solutions. Individual point solutions
target specific efficiency or effectiveness goals, for example WFM facilitates agent scheduling to create a more streamlined
workforce, addressing efficiency needs. Enterprises employ WFM alongside PM to schedule agents based on skills and
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6. Contact Center Optimization in a Challenging
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ensure the contact center offers the appropriate array of knowledge to answer customer queries, thus improving first call
resolution. The right combination of WOTs will bring more value to enterprises as depicted in Figure 2. The advantages of
deploying a suite include faster upgrades, smoother new technology additions and better integration. For example, an
enterprise requiring logging, QM and WFM may want to deploy analytics at a later date; it is typically quicker and more cost
effective to add a new analytics module to the existing suite rather than deploy a point solution. In addition, vendors now
offer WOTs packages designed to address specific pain points, such as reducing customer churn, improving first call
resolution or improving agent efficiency. These pain points are even more crucial in a down economy.
Figure 2: Suite solutions versus point solutions
Source: Datamonitor DATAMONITOR
STRATEGIC RECOMMENDATIONS FOR ENTERPRISES WITH CONTACT CENTER
OPERATIONS
Enterprises should invest in WOTs to help strike a balance between efficiency and effectiveness in the contact center. They
must match their available resources to the demand and schedule agents to best meet the spikes and valleys of call
volume. Equipping agents to better deal with queries will improve first call resolution and drive down costs. The following
bullet points are Datamonitor’s recommendations for enterprises looking to deploy WOTs and improve processes in the
contact center.
• Contact center operations should be both efficient and effective – Traditionally, enterprises focus on either
efficiency and cost control or effectiveness and customer service. However, it is important for contact centers to
focus on creating a balance between the two. They must provide exceptional customer service in order to stand
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7. Contact Center Optimization in a Challenging
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out as a strong brand in tough times but also ensure that internal performance is monitored and efficient.
Contact centers must take the middle path, without swinging too far to either extreme of the pendulum.
• Look for packaged solutions that address business needs – Because enterprises often face similar issues
regardless of industry, WOTs vendors offer packaged solutions to address these common issues. Such
packages help improve first call resolution, employee development or customer retention. Enterprises should
select solutions that match their specific business concerns. Packaged solutions reduce deployment times and
the cost of services. Therefore, it makes strong economic sense to explore such options in difficult times. By
directly addressing measurable business drivers with technology, enterprises will also find it easier to monitor
results and show a faster ROI.
• Assess the need for suite solutions versus point solutions – Enterprises should consider the benefits of
deploying a suite of WOTs technologies: suites provide a more tightly integrated offering, lower implementation
fees and simpler deployment. Suites also make it easier to upgrade and add advanced capabilities such as PM
or interaction analytics, as required. However, enterprises that want to find best-of-breed products or those that
are looking for particular functionality and do not have the need or budget to deploy the full range of WOTs
should consider point solutions.
Enterprises should prepare for changes in the market. Consolidation among vendors means that competition is increasing
and price points for interaction analytics and real-time reporting solutions will come down. As interaction analytics solutions
become more competitively priced and are packaged to address key business concerns, enterprises should seriously
consider investing in these technologies.
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8. Contact Center Optimization in a Challenging
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APPENDIX
Definitions
Workforce Optimization Technologies
WOTs (also known simply as 'workforce optimization', or 'WFO') encompass a number of different applications all with the
common purpose of improving efficiency and effectiveness in the contact center.
• Contact center analytics (CCA) - Datamonitor defines CCA as a range of optimization technologies that
includes agent and operations-focused analytics and performance management (PM). Scorecards and
dashboards are used to understand the performance of individual agents, teams, groups and overall contact
center performance. Activity is compared and monitored against key performance indicators (KPIs). PM links
objectives to completed tasks to ensure a correlation between individual objectives and organizational
objectives. In addition, data and speech from customer-agent interactions is analyzed to discover calling
patterns and to find inefficiencies and issues in the contact center. PM and analytics are often linked to
eCoaching applications, which suggest training for agents when skills gaps are discovered.
• Logging – a call logging system is a recording solution that allows a conversation to be recorded as a voice file
while a call is in progress.
• Quality monitoring (QM) – the recording of all or some of the interactions (both voice and screen capture) from
the contact center for later assessment by managers.
• Workforce management (WFM) – the scheduling and forecasting of agent resources in the contact center
environment.
• eCoaching – the automated delivery of electronic education material to agent desktops.
• Desktop analytics (DA) – a method of monitoring the desktop activity of employees and capturing and
associating screen data and events to interaction recordings to classify interactions for targeted evaluation,
reveal process issues and opportunities for improvement, and provide real-time notifications and alerts.
• Speech analytics (SA) – a method of analyzing recorded audio by content. Its principal use is as a search
engine for audio, allowing users to search for words or phrases in the calls coming into their contact center.
Trends can usually be represented graphically, if desired, and the user can choose to drill down and listen to
relevant calls.
• Contact center – Datamonitor defines a contact center by the following features:
• An automatic call distributor (ACD) or private branch exchange (PBX) with equivalent functionality overlaid
(or soft ACD);
• 10 or more agent positions (where agent positions are desks from which agents make and/or receive
telephone calls to and/or from internal or external customers; this is taken to imply that the call in question
involves communication between the agent and the customer).
• Interactive voice response (IVR) – IVR technology analyzes a sequence of spoken and/or dual-tone multi-
frequency (DTMF) commands and reproduces voice prompts to the caller. The call is then routed via a switch or
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9. Contact Center Optimization in a Challenging
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serviced wholly within an IVR that is linked to a database. The IVR interacts with key systems such as PBXs and
ACDs through analog ports, digital ports and local- and wide-area network (LAN/WAN) connectivity. IVR uses
either speech or DTMF.
About VPI
VPI (Voice Print International) offers a wide range of WOTs technologies, covering all major bases except WFM, for which
it partners with Pipkins and integrates with other best-of-breed WFM systems. It utilizes employee schedules, adherence
and other WFM metrics throughout its product suite to help optimally schedule eLearning and coaching assignments. The
vendor is particularly strong in providing call recording and QM. It acquired Syntora in 2006, and gained real-time analytics
capabilities, reporting and scorecards, eLearning and a business rules engine. The VPI EMPOWER solution is an
integrated, modular suite of applications accessible through a user-customizable Web portal. The solution incorporates
components for call, screen and data recording, interaction analytics, quality evaluation and eLearning, as well as real-time
PM. VPI’s unique capabilities include interactive heat maps and real-time desktop tickers with KPI displays and notifications
for fast access to actionable intelligence. In 2009, VPI introduced its out-of-the-box solutions across its entire WOTs suite,
delivering more than 160 KPI metrics and over 50 reports as standard issue, in order to provide immediate value. This out-
of-the-box design enables VPI's solutions to be implemented remotely, quickly and cost effectively. Customization of data
collection, analysis and interpretation is also available as an option.
About Datamonitor
The Datamonitor Group is an independent, premium business information and market analysis company that assists clients
with operational and strategic decision-making. We are a world-leading provider of premium global business information,
delivering independent data, analysis and opinion across the Automotive, Consumer Markets, Energy & Utilities, Financial
Services, Logistics & Express, Pharmaceutical & Healthcare, Retail, Technology and Telecoms industries. Combining our
industry knowledge and experience, we assist over 6,000 of the world’s leading companies make better strategic and
operational decisions.
Authors
Aphrodite Brinsmead, Associate Analyst, Customer Interaction Technologies
Ian Jacobs, Senior Analyst, Customer Interaction Technologies
Disclaimer
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The facts of this report are believed to be correct at the time of publication but cannot be guaranteed. Please note that the
findings, conclusions and recommendations that Datamonitor delivers will be based on information gathered in good faith
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Datamonitor can accept no liability whatever for actions taken based on any information that may subsequently prove to be
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