The birth of the workforce optimization market.

A new market segment has emerged: workforce optimization (WFO). It is reinventing how traditional technologies should be paired and is redefining the alignment of strategy, people, processes and technology together--all driving toward one common goal: an effective, productive workforce that's generating revenue, meeting customer needs and building loyalty. In reality, though, the WFO market is the result of an evolution that has taken place in contact centers over the past 10 years.

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As customers demand higher quality, competitively priced products and improved service, contact centers are continually tasked with striking the balance between service quality, efficiency and effectiveness, and revenue generation, cost cutting and profitability. As a result, today's customer sales/service representatives (CSRs) are charged with mastering multiple data sources and systems, delivering consistent service across customer touch points, upselling, cross-selling and saving at-risk customers, while winning new ones.

Customer relationship management (CRM) taught us valuable lessons in the 1990s, a time when companies thought they could simply implement technology and instantly have happy, loyal customers. CRM was initially viewed as a fix-all--a technology rather than a strategy. Alternatively, WFO presents a unique and well-thought-out combination of strategy and a bundling of functionality, the combination of which is designed to optimally work together. By understanding the elements that constitute WFO--which combines the two anchor segments of quality monitoring/call recording and workforce management with performance management and e-learning, two of the contact center industry's most promising segments--organizations can begin putting processes in place to make their centers strategic business assets.

Historically, companies have looked to different vendors and implemented their flagship solutions, then worked tirelessly, in many cases, behind the scenes to link them to their other technologies and infrastructure. Before now, they've been unable to invest in an interwoven, interoperable WFO solution that aligns and links together enterprise goals, contact center targets and customer objectives. With the right approach, alignment and communication with upper management, contact centers can realize fast and ongoing return on investment and, further, make WFO a widespread reality.

Defining Workforce Optimization: The Sum Is Greater Than The Parts

Quality monitoring/call recording, workforce management, performance management and e-learning are part of an emerging software and services category called "workforce optimization," a global market projected to reach $1 billion in 2006.

Industry experts are concluding that the WFO market is maturing, and customers are demanding more robust, integrated software and services. This is why the four technology segments that constitute WFO are becoming the focal points of successful centers and thriving enterprises.

Some may elect to define WFO as "utopia," but at its core it's simply the convergence of four key contact center technology segments that work optimally together in support of a greater customer service strategy. Simply said, it unites the following:

Quality monitoring/call recording. Voice of the customer, or the complete customer experience across multimedia touch points;

Workforce management. Strategic forecasting and scheduling that drives efficiency and adherence, aids in planning and helps facilitate optimum staffing and service levels;

Performance management. Key performance indicators (KPIs) and scorecards that analyze and help identify synergies, opportunities and improvement areas; and

E-learning. Training, new information and protocol disseminated to staff, leverages best-practice customer interactions and delivers learning to support development.

Independently, each delivers results. But it's when the two anchor segments of quality monitoring/call recording and workforce management are united with performance management and e-learning that true customer value emerges. These four segments become part of an interwoven and interoperable solution, enabling contact centers to transition from reactive cost centers to proactive, information-rich departments that deliver strategic value to the organization.

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Plotting Your Course On The WFO Maturity Model

Companies seek strategies and solutions that will evolve and mature as the companies do. Today's market holds both foundation-level and strategic offerings to help the companies progress through the WFO continuum to extend business value.

For instance, at an operational level, centers are focused on optimizing CSR performance. In the process, they may be working under constraints, such as bare essential infrastructures and cost controls. And they may face the challenge of matching demand with resources, retaining effective CSRs, prioritizing coaching/training and delivering consistent customer experiences. Leveraging WFO, along with such prepackaged components as basic forecasting and scheduling, voice/screen capture/recording, evaluations and best-practice training, enables them to focus on reducing risk, decreasing average handle time, improving quality scores, driving down average speed to answer, ensuring adherence and managing occupancy.

At a more advanced level, centers are focused on optimizing contact center performance. They face the challenge of balancing productivity with quality, increasing center-driven revenue, standardizing service across touch points and growing transaction complexities. These centers are examining such metrics as first call resolution, shrinkage, upselling and cross-selling, and customer satisfaction driven through the contact center. WFO pre-packages that, for example, bundle forecasting and scheduling, adherence, business rules-driven recording, lesson management and agent/organizational scorecard functionality, are paving the way to a uniform contact center experience, flexible scheduling and the initiation of a performance improvement culture.

In progressing through the WFO maturity model, some may concentrate on differentiating themselves through customer service. This strategic level centers on such metrics as root cause analysis and overall customer satisfaction as drivers for success, as well as on driving proven processes into the back office and enterprise. At this strategic point in the WFO maturity cycle, companies may opt for added functionality that enables competency-based learning, speech analytics and an expanded view of performance. What they get in return is a center that's aligned with the rest of the enterprise--one that is able to both maximize efficiency and effectiveness and facilitate proactive collaboration with the rest of the organization.

At the top of the WFO alignment pyramid is the visionary level, where optimizing virtual service performance comes into play. Those approaching their business based on this model are furthering the trend of at-home agents and the virtual workforce by leveraging their VoIP infrastructures. What they're measuring is more forward-thinking, as well: customer loyalty, top-line revenue, customer service operation margins and earnings per share.

At no stage of this model can you be right or wrong. Regardless of a company's size and requirements, it's a progression that is to take place when the organization is ready. Simply put, WFO offers the functionality to meet the company's needs today and a growth path as its goals evolve.

How To Begin With WFO

One of the first questions surrounding WFO is this: "I understand the value of implementing and integrating quality monitoring, workforce management, performance management and e-learning, but does that translate into more cost?" The answer to that question resides in the business benefits that can be gained from a cohesive WFO strategy. Although most centers are using one or more of WFO's foundation technology segments, the majority have yet to leverage them together and to their full potential.

Just as WFO must be viewed as a strategy, the supporting technology must be one interoperable solution, which translates into immediate savings. Pre-packaged solutions of synergistic functionality eliminate four different user interfaces, agent databases, system administrations and security models. It makes installation and implementation easier; reduces learning curves and training expenses; simplifies upgrades; and lowers maintenance and software expenses--all translating into lower total cost of ownership, as well as faster, ongoing ROI.

The competitive advantages of WFO can be realized by both small and large contact centers across industries, ranging from telecommunications, to banking and financial services, to utility providers. However, fast and ongoing ROI can only be achieved through a WFO strategy that is surrounded by the people, solid processes and interwoven technologies that can grow with the company. If an organization surrounds the technology with poor training and ineffective processes, ROI will be long coming.

Experiencing WFO In Action

It all begins with planning and establishing your goals--from both an enterprise perspective and a center perspective--to ensure alignment and objectives that complement and support one another; after which comes forecasting and scheduling your workforce to ensure optimum service levels. Then recording and measuring performance come into play, leveraging quality monitoring/call recording to assess service quality and the customer experience.

Next comes the analyzing and identifying of opportunities tied into your KPIs and scorecards. These can be rather telling of how you're really doing. E-learning and company-specific best practices documented through your captured customer interactions make it possible to address skill and knowledge gaps efficiently and effectively--as well as to quickly communicate policy or procedural changes across the center--enabling the center to achieve success in whatever terms it chooses to define. Rather than arbitrarily sending e-learning training segments and hoping CSRs take them, centers can use advanced workforce management forecasting and scheduling to select the best time to administer training, (a proven way to be more effective than classroom/group learning), as well as to make supervisors available to work one-on-one with agents.

Once these processes are in place, quality monitoring scores can be fed directly into workforce management to produce staffing models that prevent companies from unknowingly scheduling one shift with top performers, for example. As a result, the companies can guarantee a higher level of consistent service across shifts. While each WFO technology segment delivers value, integration is the key, as together they deliver greater impact than the sum of their individual parts. Utilizing them separately only limits the contact center's potential to become a strategic business asset.

Enhancing Performance, Achieving Results

Contact centers are under tremendous pressure from everywhere. Customers want their questions answered quickly and accurately; finance wants to reduce expenses; marketing needs help launching new campaigns; and CEOs want to grow revenue, investor value and market share. Last, though certainly not least, your CSRs need your support, too. With all of these expectations, center management is left with striking a balance between cost control and revenue expansion, along with the battle between efficiency and effectiveness. This is where a solid WFO strategy can help.

In the contact center, a performance-enhancing culture is dependant upon quality monitoring and performance management to give managers a better understanding of how the workforce is performing and quickly identifying areas for improvement. Workforce management and e-learning are critical for helping them to plan appropriately and put processes in place to enhance performance. Together these four segments give companies the insight they need to proactively address cost control issues and put revenue-generating initiatives into place.

Studies have shown significant results regarding the impact of performance-enhancing cultures on corporate performance (see Table 1).

Realizing The Catalysts Of Change

Changing market dynamics, new workforce composites and structures, and advanced technology platforms also present great synergies and bode well for WFO and the promise it holds. For instance:

The shift from performance management to workforce optimization. In recent years, contact centers have been recognized for the strategic value they can add by capturing valuable customer and competitive business intelligence to improve both agent performance and customer experience. However, now they're drowning in this data. They need to more fully understand how this valuable information can benefit the business and revolutionize the workforce.

Movement toward virtual center models. With roughly 100,000 at-home agents in the U.S. already, a home-based contact center workforce is being viewed as a solid alternative to offshoring. Combined with the rise of virtual centers, it's opening the door to a previously untapped labor pool, as well as new challenges in quality control, scheduling and training.

VoIP: Preparing for the big switch. Over the next several years, many centers will reach end-of-life cycles with their switches and will transition to VoIP infrastructures. Some may not be adequately preparing for the switch, while others may not be taking full advantage of the possibilities the technology presents.

Hiring and training. In 2005, U.S. call centers will spend more than $6.9 billion in restaffing and training due to attrition. Organizations must examine new ways to maximize employee retention and re-examine their development programs from a cost and effectiveness perspective.

Standardizing service across channels. Many believed e-mail, chat and Web self-service would reduce call volumes. The opposite happened. Poorly designed IVRs, Web navigation and content have created more frustration and increased call volumes. A recent study reported small to medium-sized centers in Europe expect 23 percent of 2005 customer traffic to be e-mail, while a large U.S. insurance provider estimated the figure at 40 percent. This raises many questions and concerns, including whether to move to a blended or dedicated agent model.

Closing A Chapter: Saying Farewell To Tactical Centers

The birth of WFO is signaling the end of the tactical contact center. Organizations are realizing that the contact center is on the frontline of customer service and satisfaction. There's a business benefit to be gained by relaying information from the contact center to all areas of the business for an accurate pulse on what's actually happening in the marketplace.

Centers have for a long time been their own worst enemy. They typically reported to upper management in a very tactical way--number of calls coming in, time answered, average handle time and so on. These are all very service-level-oriented metrics and do nothing to demonstrate how the center is meeting strategic initiatives, such as customer retention, upselling and cross-selling. Instead, contact centers should report on exactly how they're supporting these efforts through WFO, as well as their role in gathering customer and market intelligence that can be leveraged enter-prisewide.

Reaping The Benefits Of WFO's Value Streams

Centers today can find themselves in the eye of the storm, accountable to multiple departments with varying goals and expectations. Thriving, even surviving, in such an environment can be daunting to consider. That's where the multiple value streams for WFO come into play--and to the rescue.

WFO presents the opportunity for your center to sit in the middle of four key areas: customer satisfaction, business growth, cost control and employee satisfaction. Higher customer satisfaction yields better experiences and a stronger reputation, positively reinforcing your brand. Business growth and efficiencies enable stronger competitive differentiation and more successful campaigns, as well as increased market share. WFO benefits around cost control include increased first call resolution, lower cost per contact, accurate staffing levels, decreased training expenses and increased operating margins. And using WFO as a means to heighten employee satisfaction can lead to decreased turnover, enhanced skills and "career pathing," and empowerment, as well as self-evaluation, assessment and growth.

Oscar Alban serves as principal global market consultant for Witness Systems (www.witness.com), a global provider of workforce optimization software/services for contact center, IP telephony and back-office environments. With more than 20 years' of contact center experience, he regularly serves in a speaking capacity at industry trade shows and conferences, and he performs consulting engagements at customer sites worldwide, where he focuses on the mission-critical aspects of capturing customer intelligence and optimizing workforce performance. Contact the author at [e-mail].

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By Oscar Alban

Witness Systems

Table 1.

                    Organizations With     Organizations Without
                    Performance-Enhancing  Performance-Enhancing
                    Culture                Culture

Revenue Growth      682 percent increase   166 percent increase
Employment Growth   282 percent increase    36 percent increase
Stock Price Growth  901 percent increase    74 percent increase
Net Income Growth   756 percent increase     1 percent increase

Source: "Corporate Culture and Performance" John P. Kotter and James L.
Heskett--Landmark, 11-year study of 200 companies from 22 different
industries