COSMOCOM WHITEPAPER SERIES

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1 Stephen R. Kowarsky COSMOCOM WHITEPAPER SERIES CONSOLIDATION 2.0: CONSOLIDATION TRENDS IN CONTACT CENTER TECHNOLOGIES AND OPERATIONS Stephen R. Kowarsky, EVP CosmoCom, Inc. January 2008 USA The Netherlands UK France Germany Japan Hong Kong Israel CosmoCom Headquarters 121 Broad Hollow Rd. Melville, NY Tel: Fax: EMEA Headquarters Gooimeer DC NAARDEN The Netherlands Tel: Fax: [email protected] Worldwide office locations and contact information at :

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3 contact center CONSOLIDATION 2.0 solutions Call Center Enhancement through Consolidation The history of call centers reflects a series of consolidations enabled by advancing technology. These consolidations had the same goals as consolidations in any business: eliminating unnecessary duplication of resources and efforts, improving efficiency, reducing costs, implementing best practices, and increasing customer satisfaction. Consolidation 2.0 is the latest and most effective call center consolidation strategy. It offers a wider range of favorable impacts than any of its predecessors. Its core concept is simple: to consolidate the many, diverse activities of the enterprise contact center on a single virtual platform that supports the global distribution of contact center agents. This white paper explains the benefits of Consolidation 2.0 and shows how it best meets the demands of today s global business environment. This strategy is especially appropriate for large, complex enterprises, but many smaller enterprises will benefit, too. Consolidation 2.0 is provider neutral. It can be deployed on a traditional premise-based system or hosted by one of many global service providers that have Consolidation 2.0 offerings. This white paper begins with a brief history of prior consolidation efforts, then presents and defines Consolidation 2.0 as the state of the art. The paper then enumerates and explains the many benefits of Consolidation 2.0, and concludes by listing the key requirements of a Consolidation 2.0 platform. CosmoCom White Paper: Consolidation 2.0 1

4 A Brief History of Contact Center Consolidation Call center consolidation strategy has evolved with technology in a recognizable series of stages, culminating in Consolidation 2.0: Consolidation 1.0: The Enormous Room Consolidation 1.5: Two-Stage Routing Consolidation 1.8: Vendor Standardization and Networking Consolidation 2.0: The Multi-Virtual Contact Center Each strategy used the best available technology to deliver a new set of capabilities and benefits. The earliest consolidations focused primarily on improving operating efficiency, eliminating redundant resources, and achieving economies of scale. In later consolidations, improved customer satisfaction became increasingly important as a competitive advantage. To put Consolidation 2.0 in the proper perspective, we ll now briefly describe the earlier strategies. Consolidation 1.0: The Enormous Room Many contact centers started off as a single massive location serving the entire enterprise. To some extent, the technology of that time favored this one big room approach. Companies whose contact centers evolved as multiple sites often considered migrating to the enormous room to address the difficulty of managing separate, geographically-isolated systems, equipment and operations. These companies hoped that putting all agents and equipment in one place would provide economies of scale and address the inefficiencies of a distributed environment. Consolidating in the enormous room, however, had several disadvantages: communications costs increased, existing staff had to be relocated or new staff had to be recruited, and the benefits of local presence in a time zone were lost. The industry was ready for a better way to consolidate small, regional contact centers. Consolidation 1.5: Two-Stage Routing The improvement came in the form of two-stage routing, which consolidated call distribution across different facilities. Under this approach, each regional contact center of an enterprise had its own equipment for Automatic Call Distribution (ACD). Two-stage routing distributed calls among the sites based on agent availability, skills, and wait times. The ability to coordinate call distribution across different facilities and ACDs provided a significant boost in agent utilization efficiency and overall service level. These benefits spawned at least one major company and a very lucrative and successful services industry for carriers. Unfortunately, the complex, proprietary equipment for two-stage routing was expensive, as were the communication services needed to support this approach. In addition, integrating contact center premise equipment into a working system required significant time, expertise, resources, and risk. The complexity of completed systems made them difficult to modify or reconfigure when business needs changed. Consolidation 1.8: Vendor Standardization and Networking The next consolidation strategy to emerge was standardizing on a single vendor for all the call centers in an enterprise and connecting them through that vendor s proprietary networking capabilities. This approach reduced the number of systems the IT staff had to support and recognized the value of standardization in unifying the various call centers in the organization. Many vendors still support this strategy today. CosmoCom White Paper: Consolidation 2.0 2

5 But networking separate call centers, even those from a single vendor, has proved to be an elusive goal. The complexity of the task creates a new set of cost elements and a new burden on the IT staff. Consolidation 2.0: The Multi-Virtual Contact Center Consolidation 2.0 takes standardization much further than any of these historical approaches. Consolidation 2.0 is achieved through networking standards, not the proprietary communications of a single vendor. The single platform of Consolidation 2.0 works in conjunction with the IP network and connects to the Public Switched Telephone Network (PSTN) via standard gateways. Standardizing under Consolidation 2.0 provides far-reaching freedom and flexibility, including The elimination of all restrictions on the physical location of contact center resources and personnel The ability to share the same technology platform for multiple different call center applications across all sites and users Conceptually, these two attributes may be described as virtualization and multi-tenancy. We ll now explore them in more detail. Virtualization: One Contact Center, Many Locations Virtualization of the call center is one of the most important results of Consolidation 2.0. The virtual call center is responsible for major improvements in agent utilization efficiency. All an agent needs to connect to the call center is an IP address anywhere in the world. Agents can be located wherever they re most effective and cost efficient. They all work from the same contact center platform as though they were located in the same physical facility. The entire globe is the enormous room of the virtual contact center. Diagram 1 depicts an enterprise with a virtual contact center. The multiple contact center sites could include a large centralized contact center, regional facilities, or satellite facilities located throughout the world and numbering in the dozens. Diagram 1 - The Virtual Contact Center The home-based agents in the diagram represent a growing trend. Using home-based workers is cost effective and easy to accomplish in a virtual call center. An even newer innovation is expanding the call center to include knowledge workers and the mobile workforce as informal agents. Their expertise can be called upon when needed because the virtual call center makes it easy and cost effective to give informal agents the same tools and connectivity as full-time agents. When the Enterprise is the Call Center, customers have the best chance of reaching the person CosmoCom White Paper: Consolidation 2.0 3

6 with the right information. Informal agents, like home agents, can easily number in the hundreds or thousands. Another innovation of the virtual contact center is the ability of an enterprise to host outsourcers on its own technology platform. Before virtualization, outsourcers were essentially separate contact centers, typically on a different platform from the enterprise s. Outsourcers on their own platform could ease the load on an overstretched contact center, but their performance was difficult to monitor. Hosting an outsourcer on one s own platform, however, makes the outsourcer a seamless extension of the enterprise contact center. The enterprise can now directly measure outsourcer performance, both quantitatively and qualitatively. Multi-tenancy: One Platform, Many Contact Centers Multi-tenancy is a new capability made possible by the Consolidation 2.0 technology platform. The multiple sites, agents, and outsourcers of a contact center can be defined collectively as a single contact center tenant. The Consolidation 2.0 platform allows multiple tenants to share a single platform. Each tenant is a separate logical entity with its own system image and a complete set of tools to manage its own resources and operations. We call this arrangement the Multi-Virtual contact center, shown in diagram 2 below. Diagram 2 - The Multi-Virtual Contact Center Multi-tenant hosting spreads the capital investment and operating costs of a call center among multiple clients. This economy of scale is especially important for hosted service providers, because it produces higher operating margins and ROIs than hosting each tenant on a separate platform. Large enterprises can achieve comparable economies of scale if they host multiple call centers and outsourcers as tenants on their own platform. The Multi-Virtual contact center is the fullest expression of the technologies that make Consolidation 2.0 possible: The most advanced contact center platform currently available The wide availability of the IP network The maturity and quality of VoIP The growing penetration of IP communications channels makes it increasingly apparent that the Consolidation 2.0 platform is now the contact center of choice. CosmoCom White Paper: Consolidation 2.0 4

7 Consolidation 2.0 Benefits Earlier consolidation strategies produced agent, equipment, and management efficiencies. Consolidation 2.0 does a better job of providing the same benefits and provides unique benefits of it own. They include efficiencies in IT staff utilization and system deployment, better quality control, and a better customer experience. These improvements add up to a competitive advantage. Achieving a few of them is enough to realize a strong ROI and support a compelling business case. Agent Efficiency It s well known that improving agent efficiency has a large impact on reducing costs. Consolidation 2.0 greatly increases agent efficiency by removing the constraints of their physical location. All agents, regardless of location, can be consolidated into a group available to take calls. This flexibility keeps one group of agents from being overloaded while another group elsewhere is under utilized. The same number of agents can now handle more calls, or fewer agents can handle the current call volume. A further increase in agent efficiency comes from the unified call queue of the Consolidation 2.0 platform. The call queue isn t just for calls any more. It handles voice, , fax, web chat, SMS, and video on an equal basis. The agent does not lose time switching gears to deal with a different communication mode, and communications do not get lost because a low volume queue remains unchecked. Because traffic generally peaks at different times in the various channels, agents can respond to less time-sensitive communications when voice call volume is low. And of course, with Consolidation 2.0, these gains in efficiency apply to all agents: in-house, outsourced, offshore, home-based, and informal. Management Efficiency Consolidation 2.0 eliminates the most common frustration of call center managers: the lack of consistency in reports and key performance indicators (KPIs). On a single technology platform, only one set of tools, KPIs, and reporting formats is used across the entire contact center. In addition, reports can be customized for different management levels and departments. Better measurement and reporting improve management efficiency and decision making. Agent training also becomes more efficient on a single technology platform. With only one system to learn, agents need to spend less time on training. On multi-tenant systems, the basic operations, management and reporting are the same for all tenants. Agents and staff are inherently cross-trained, further reducing costs. Equipment Efficiency The Consolidation 2.0 approach makes the most efficient use of hardware, software, IT infrastructure, and the IP network. After the initial nonrecurring investment to deploy the platform, subsequent system growth is completely incremental. Sharing platform resources among multiple tenants maximizes equipment utilization for enterprises and service providers alike, increasing the return on their capital investment. IT Staff Efficiency and Rapid Application Deployment Integration costs during deployment can be a huge part of the initial investment in contact center consolidations. These costs are incurred repeatedly by enterprises with a mix of technologies, because integrating all communications channels and business applications requires a separate CosmoCom White Paper: Consolidation 2.0 5

8 effort for each technology. The unified Consolidation 2.0 architecture streamlines integration because the Consolidation 2.0 interface is the same for all media and all locations. Integrating one channel integrates them all. Integrating one site integrates every site. Decreasing the number of integration efforts brings benefits more quickly during the initial deployment and whenever the system changes. Once deployed, a Consolidation 2.0 platform can be very efficiently supported by a small, centralized IT staff. Multi-Virtual contact centers further leverage these efficiencies by spreading support costs for a common IT staff among multiple tenants. Quality Control and the Customer Experience Consolidation 2.0 technology helps agents and their managers improve the customer experience. An agent can transfer a call to any other agent, and caller information always travels with the call. Customers are spared the irritation of repeating information when transferred, or even worse, having to hang up and call a different number. All contact center agents and activities are completely visible to the system. Supervisors can monitor all agents with tools such as monitor, whisper, and barge in over an Internet connection without regard to anyone s location. Another boost to the enterprise quality feedback process comes from the technology s ability to record interactions across all communications channels. An enterprise can easily extend these improvements in quality control to outsourced contact centers by hosting them on the enterprise platform. Outsourced agents are just as visible as inhouse agents and come under the same consolidated monitoring and reporting. The enterprise has the information it needs to guide outsourcers on human resources issues and training. Complete visibility and improved monitoring of all agents produce a better customer experience. Moreover, changing outsourcers or taking operations in-house is much easier when the enterprise itself hosts outsourced agents. Alignment with Major Trends In selecting a contact center platform, enterprises need to think about technology and business trends. The relevant technology trend is IP network convergence. The important business trends include globalization, outsourcing, offshoring, and telecommuting. The Consolidation 2.0 technology platform capitalizes on all these trends. Network convergence originated with VON (voice on the network), and now encompasses all IP communications, including , fax, SMS, web chat, collaboration and video. Today, VON is being replaced by EON (everything on the network), which is a core capability of the unified, all-ip Consolidation 2.0 platform. Global enterprises recognize the value of establishing a local presence for customer service wherever they conduct business. Consolidation 2.0 supports globalization by removing all restrictions on where the enterprise can locate its agents. It makes no difference whether agents are outsourced, offshore, or home-based. Under Consolidation 2.0, the sourcing of the agents is determined by the needs of the enterprise, not the technology. Provider Neutrality Consolidation 2.0 is a provider neutral strategy for enterprises of all sizes. It can be implemented as a traditional premised-based system or as a hosted service. Many enterprises can share a service-provider-hosted platform, making this a particularly cost effective solution for small- and medium-sized enterprises (SMEs). With essentially no capital investment, SMEs can match the world-class virtual call center service of their largest global competitors. At the same time, many CosmoCom White Paper: Consolidation 2.0 6

9 large enterprises are now evaluating the service provider-hosted model as a viable alternative to premise-based systems, especially for complex, non-consolidated contact centers that have evolved to become a major operating cost in the enterprise. Consolidation 2.0 Platform Requirements A compelling case for the Consolidation 2.0 strategy arises from all these benefits to the operations, customer service, and bottom line of an enterprise. To support a true implementation of the strategy, the technology platform must meet each of the following five requirements: Inherent Virtualization The platform must eliminate location as a constraint on call center operations by linking all individual agents and groups of agents over the IP network. High Capacity/High Availability The platform must have the capacity and scalability to support global operations, and the carrier-class reliability and fault tolerance demanded by critical business processes. Multi-tenancy with Tenant Self-Administration The platform must logically isolate tenants who share a common platform and allow them to manage their contact centers independently. Rich, Flexible Reporting and Administration The potential of having the entire enterprise on a single platform will not be realized unless it provides a comprehensive set of tools for administration and reporting. Administrators must have complete control over the access and permissions of agents and supervisors. System wide performance parameters must be incorporated in reports that can be independently formatted for different users. Truly Unified Architecture Finally, the platform must have an architecture that unifies all core elements, including ACD for all channels, IVR, outbound dialing, administration, reporting and recording, and the service creation environment. This design is the only way to avoid the compromises that rob integrated-technology platforms of the efficiencies and benefits that define Consolidation 2.0. Conclusion The Consolidation 2.0 strategy is a major step forward in the delivery of customer service, providing both economic and quality benefits outlined in this white paper. Customers are quick to perceive the quality improvements, which become a valuable competitive advantage. Thanks to a variety of deployment models and service provider offerings, the consolidation of multiple contact center operations into a geographically distributed, virtual contact center is an affordable, practical solution for enterprises of all types and sizes. Consolidation 2.0 is a win for everyone in the enterprise who is related to the contact center, and for everyone outside the enterprise who connects to the enterprise via the contact center, no matter where in the world they are. CosmoCom White Paper: Consolidation 2.0 7