Justifying the Cost of a Workforce Management System

If you’re a retailer, you know that the flow of calls, e-mails and Web chats coming into your contact center can fluctuate greatly depending on a wide variety of factors. The time of year; the success of your company’s recent sales efforts; a new product launch; a product recall; the closing of a competitor’s doors; or the current strength of the economy are all factors which can cause rapid changes in contact volume.

Considering that labor is the single biggest cost facing any contact center, how do you properly balance the number of agents you need with these unpredictable changes in call traffic? After all, there’s nothing worse than having a room filled with agents who are on the clock with no contacts coming in.

One solution is to deploy workforce management system. These systems do a lot more than schedule the agents’ shifts — they can actually help companies forecast the trends which will result in a sudden increase or decrease in traffic and thus can help them meet service level goals. In this sense, today’s WFM systems work more like forecasting tools, rather than a basic spreadsheet scheduling systems.

But not all contact centers need an automated system to accomplish workforce management tasks. Need is a function of size and operating complexity. Generally contact centers with more than 30 agents with an increasingly complex scheduling environment (round-the- clock operations or an increasing volume of e-mails/faxes, for example) can cost justify automating these functions.

A WFM system generally produces measurable improvements in the following areas:

1) More efficient scheduling
The savings associated with more efficient scheduling can take many forms, including reduced overall staff hours, reduced need for overtime, and identification of overstaffed periods to offer time off without pay. Workforce management system users generally experience a minimum reduction of staff hours of 2% and average potential is in the 5%–10% range.

2) Automation of workforce management tasks
Depending on how often forecasting and scheduling tasks take place and to what degree they are currently automated, there is a wide range of potential savings in staff time by automating these tasks with a full-featured WFM system. Generally, you can expect to save at least 25% of administrative and managerial time currently devoted to the manual performance of these tasks.

3) Reduction in workforce shrinkage
Many hours of staff time are lost in most call centers due to excessive amounts of non-productive time (time spent not handling calls). An automated WFM system can provide historical and real- time information on schedule adherence and schedule exceptions for better management and control of staff, reducing workforce shrinkage by 2%-5% in most call centers.

4) Lower network costs
By creating a set of schedules that minimizes understaffing as well as overstaffing, implementing WFM results in a more consistent level of service to callers and may reduce queue time and toll-free network costs.

5) Increased revenue
For call centers that realize revenue by answering calls (catalogs, reservations centers, etc.), WFM automation can help reduce queue times and improve service, thereby reducing the number of abandons and increasing the number of revenue calls completed.

So how do you justify the cost of a WFM? To determine an estimated payback period, take the estimated savings from the five items above for estimated annual savings or divide by 12 for an estimated monthly savings in the first year of implementation. The payback period on such a system can be calculated by dividing the one-time purchase price by the average monthly savings.

In addition to these measurable cost savings, there are many intangible benefits. Perhaps the biggest of these is the addition of a sophisticated “what-if” planning capability that allows management to forecast and plan staff needs for the short term to respond to unexpected changes, as well as long-term budgeting and planning.

Next week we’ll discuss how to go about selecting a WFM system.

Penny Reynolds is a co-founder and senior partner with The Call Center School, a Nashville, TN-based consulting and education company.

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