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WHITE PAPER Executive Guide to Contact Centre KPIs How to identify and define key metrics for measuring and improving contact centre performance. www.inovasolutions.com North America Europe, Middle East and Africa Asia Pacific 110 Avon Street City Tower - Level 4 | 40 Basinghall Street Newbridge Business Center, #40 Charlottesville, VA 22902 London EC2V 5DE Ulsoor Road, Bangalore-560042t 434 817 8000 | f 434 817 8002 t +44 (0) 2076 145 854 | f +44 (0) 2076 145 855 t +91 80 51133209 | f +91 80 51133207
“A robust metrics program can provide directional guidelines and a basis for advancement in process efficiency and flexibility.” — Gary Smith, Intelligent Enterprise INTRODUCTION A common saying in business is you cant manage In a recent study1, 94 percent of call centre leaders what you dont measure. While this hints at the said that the use of KPIs ultimately improve call truth, the reality is that people can and do manage centre performance in their organisations. without having any sort of defined measurement However, only 43 percent of respondents felt that program in place. However, this puts a company at those within their centres had a high level of under- a distinct competitive disadvantage. Without standing regarding KPIs. measurements: This white paper is intended to provide a clear Decision-making suffers as business decisions guide to understanding metrics and their role in must be based solely on feeling and instinct. contact centre management, and to provide guide- Success or failure is difficult to determine as lines for developing KPIs that contribute to the performance is entirely subjective. achievement of company strategies and goals. Adequate becomes acceptable as there are no defined standards for improvement. METRICS VERSUS KPIs While often used interchangeably, there is an A more accurate saying is that you cant effectively important distinction to be made between metrics manage what you dont measure. That is why and key performance indicators (KPIs). Metrics are metrics are so important. Metrics enable an objec- measurements in a broad sense. Anything that is tive analysis of how a contact centre measures up to measured in the contact centre can be considered a goals and expectations, and serve as a foundation metric. Although a given metric may be of interest, for successful performance management initiatives. unless it relates to a goal or objective it is of little business value. Metrics provide a quantitative view of perform- ance effectiveness that demonstrates the value of the contact centre — important in justifying A critical measurement that is tightly linked to the budget and resources. attainment of strategies and goals is considered a KPI. KPIs are a subset of the sea of metrics gener- Metrics set the bar for performance expectations ated in the modern contact centre. All KPIs are and serve to motivate and focus a workforce on the right tasks. metrics, but not all metrics are KPIs.1 Minnucci, Jay. Call Centre KPIs: A Look at How Companies Are Measuring Performance. Incoming Calls Management Institute. February 3, 2004. Executive Guide to Contact Centre KPIs 2
When developing a set of KPIs, it is important to Looking at this approach in more detail, the firstfocus on the metrics that are truly “key” to your step is to ensure everyone involved in the develop-business. A common trap is to attempt to measure ment of your KPIs has a clear understanding ofand monitor everything. A single automatic call corporate strategy. It sounds simple, but far toodistributor (ACD) is capable of generating screens often this common vision isnt shared among allfull of metrics. As more technology is added, more team members, or personal agendas run tangentialdata is generated, more metrics are available, and to corporate strategy. Unfortunately, it also may beinformation overload quickly ensues. By nature, a the case that corporate strategy is not well definedcontact centre will have many metrics. By design it within your organisation.should have only a handful of KPIs. The obviousquestion is how does one determine which metrics For this reason, it is a good idea to have an execu-truly reflect performance with relation to estab- tive sponsor as part of the KPI development team.lished goals? This executive can authoritatively relay established strategy to the rest of the team (or take on the taskIDENTIFYING KPIs of getting it defined if necessary), and provides theOne method is to simply look at all the metrics high-level buy-in to the groups efforts necessary tocurrently being monitored, and select those that ensure success.seem more important than the others. While this isa tempting approach, it is inherently faulty. What is The next step is to identify the specific contactimportant to one person may not be important to centre goals that contribute to implementing overallanother, and does not necessarily align with overall corporate strategy. Without this relation to strategy,strategy or goals. A team charged with developing a contact centre can meet its goals but fail toKPIs using this approach will either yield too many contribute to the overall business.KPIs to be useful, or a limited number of KPIs thatdont have the full buy-in of all stakeholders. Now it is time to map out business drivers. Think about the important execution steps that areA more basic flaw with this approach is that the required to meet each goal.best measures of performance may not be presentin the metrics already being monitored, causing the Finally, you are ready to identify the key perform-most relevant KPIs to be completely overlooked. ance indicators that best represent how well your centre is performing with respect to the criticalIn determining the most appropriate KPIs for your execution steps that have been established.company, Inova recommends that you begin at thetop with your corporate strategy, then work your Lets look at how this plays out in an example. Away down to contact centre goals, followed by home shopping network, currently ranked #4business drivers, finally arriving at KPIs. This is among all shopping networks, declares their corpo-often referred to as a top-down approach, and rate strategy is to become the #1 network. Thefollowing it ensures that your resulting KPIs are companys contact centres handle 90% of alldirectly related to established goals and objectives. orders, so one of the goals set for the centres is to Executive Guide to Contact Centre KPIs 3
increase sales. Since every call represents a poten- database (potentially as multiple revenue numberstial sale, key steps to achieving this goal would that require additional calculation), and number ofinclude handling calls efficiently and obtaining calls, average talk time and average after-call workrepeat customers. With these business drivers in may all be available from an ACD.mind, appropriate KPIs might include abandon rateand customer satisfaction level. It is important to remember that the people involved in the development process are often theEstablishing KPIs using this top-down approach same people responsible for performance againstwill help ensure that the efforts of your workforce the established KPIs. There may even be compen-are properly focused. In meeting your KPI numbers sation at stake in the form of bonuses based onyou will also be meeting your goals and objectives performance. This can generate a highly politicaland ultimately executing on the corporate strategy atmosphere that is counter-productive. Companiesthat has been set. faced with this situation often turn to outside help.DEFINING KPIs The next critical step in defining KPIs is setting aOnce the most appropriate performance measures performance target for each measure. Severalhave been identified, each individual KPI must be factors influence where the target for a KPI is set,defined, targets must be set and action plans must including customer expectations, internal financialbe developed. This moves beyond identifying what considerations and industry benchmarks.will be measured, to establishing how it will bemeasured. More specifically, establishing how each For instance, with a KPI of abandoned calls, theKPI is calculated, what data points contribute to the development team could look back at historicalcalculation and where that data comes from. data and draw on their own experience to determine how long their customers appear willing to waitFor example, lets say one of the KPIs identified before a significant percentage hang up. Theyearlier in the process is Average Call Value. In would then have to take into account how quicklyorder to implement this KPI, it is necessary to calls could realistically be answered based onarrive at a formula that accurately reflects Average current budget and resources, and adjust perform-Call Value. It is imperative that everyone involved ance expectations or budget and resources asin the development process agree on the manner in necessary. Finally, the team may decide to comparewhich each KPI is calculated. For this example, the their target with external industry benchmarks.following formula will be used: There are a couple of benchmarking pitfalls to beAverage Call Value = Total Revenue / [Number of Calls aware of and avoid. The first is that acceptablex (Average Talk Time + Average After-Call Work] performance varies greatly across industry segments. For example, according to BenchmarkWithin this formula are several data points that are Portal research, average talk time ranges from 4.29most likely coming from at least two separate data minutes for Healthcare companies to 9.13 minutessources. Total revenue may be stored in a sales for High Tech. Adjusting internal targets based on Executive Guide to Contact Centre KPIs 4
comparison to benchmarks from different industry supporting data to determine the source of the segments can lead to unrealistically high or low problem. Based on that determination the manager performance expectations. will take proactive steps to bring the KPI back into adherence by postponing scheduled training, initi- The second pitfall is that KPI definitions are ating equipment repair, routing call traffic to an extremely inconsistent across companies. A recent alternate centre, etc. The procedures will vary study2 into definitions for various metrics found no based on your situation, but they must be estab- cases where the most popular definition garnered lished to ensure that your metrics program goes even 50 percent of the total number of responses. beyond simply measuring performance to driving When comparing an internal target with an industry actions that ultimately improve performance. benchmark, even within the same industry, the comparison may be flawed. CONCLUSION The guidelines for KPI development discussed in It must be stressed that while you cannot control this paper will help you arrive at a portfolio of the inconsistency of KPI definitions that occurs consistent and relevant metrics closely aligned with external to your company, you can and must ensure business goals. This alignment ensures that high consistency within your organisation if these performance with respect to the established KPIs measures are to be valid and useful. correlates with achieving stated objectives and carrying out corporate strategy. But the process The final step in defining KPIs is to establish an does not end here. Now that your KPIs have been action plan for each metric. Poor performance indentified and defined, they need to be imple- against KPIs without defined steps for improve- mented into your daily operations. This topic will ment is frustrating and counter-productive. As each be covered in a future whitepaper. KPI is set, map out the specific actions to be taken if performance falls outside of targets. Finally, as strategies, goals and objectives change over time, it will be necessary to regularly revisit For example, if the KPI of Abandoned Calls your portfolio of KPIs to verify their validity and exceeds target level, it should already be estab- adjust them as necessary to keep efforts aligned lished that the appropriate manager will examine with desired performance results. ABOUT INOVA SOLUTIONS Inova Solutions is a leading global provider of performance optimisation solutions for the contact centre, help desk and network operations centre. Inova’s products integrate data from existing systems to provide unified views of live and historical metrics across organisational levels for improved decision making and increased productivity. Superior technology, world-class services and support, and two decades of industry experience allows us to craft powerful solutions that deliver measurable results to a diverse customer base ranging from emerging growth to Fortune and Blue Chip companies. Learn more about Inova Solutions at www.inovasolutions.com.2 Minnucci, Jay. Call Centre KPIs: A Look at How Companies Are Measuring Performance. Incoming Calls Management Institute. February 3, 2004. Executive Guide to Contact Centre KPIs 5