November 2003

By William Durr, Blue Pumpkin Software

'Managing the workforce' is an easy phrase to say, but it's an ambitious proposition that presumably shapes people into high-performing assets to drive customer satisfaction and revenue. For as many years as it has been around, though, why hasn't workforce management been the killer app its name promises? It's not even an exact science yet.

As an industry insider, I'd like to share some of the lessons I've picked up over the years in the trenches ' such as what the different (and often missing) pieces of workforce management are and how contact centers today can put them all together. By piecing together the puzzle, you can get a more complete picture of your people and tap into the much greater potential workforce management has to offer.

What Is Workforce Management?
Workforce management in the contact center today is largely concerned with forecasting customer interaction demand and creating agent schedules that meet this demand within targeted service level goals. The business drivers behind workforce management include minimizing the cost of providing customer service, matching agent skill and knowledge to transactional requirements and realizing increased revenue and profit from the customer interactions through upselling, cross-selling and in-creasing customer satisfaction and loyalty.

For reasons that are obscure, the term 'workforce management' in the contact center world has meant forecasting and scheduling. Isn't that odd? Admittedly, forecasting and scheduling are important, and no contact center can hope to be efficient without these practices. One may wonder, though, why the industry didn't label the practice with a more descriptive term, say 'workforce deployment.' After all, forecasting and scheduling don't really have that much to do with actually managing agents. Just to confound things a bit, in the past 18 months a new term has emerged: workforce optimization. Gartner analysts have defined workforce optimization to be an amalgamation of forecasting and scheduling, quality monitoring, e-learning and performance management. Even as Gartner is declaring optimization to be an important new market, workforce management solutions continue to evolve to meet the needs of contact center operations management. Through software capabilities and formalized, data-driven processes, workforce management saves money. It boils down to planning the work and working the plan. As we shall see, call centers ought to be pursuing the three levels of return on investment a more robust form of workforce management can provide.

Planning The Work
Workforce management software enables appropriately trained people to generate reasonably accurate forecasts of future contact volume by transaction type. A typical approach to developing a forecast is to use the most recent 13 weeks of historical data augmented with 'factors' that attempt to account for seasonal and monthly trends. Some solutions permit the forecaster to select particular weeks of history to be considered by the forecasting algorithm. The latter approach is swiftly gaining in popularity as more organizations experience transaction patterns that exhibit turbulence arising from external events rather than the recent past.

With a detailed forecast in hand, workforce management software's most impressive trick is to consider the competing needs of the business to meet transaction demand while simultaneously meeting the life needs of the center's agents. The software accomplishes this by having the management team define acceptable work patterns, then building a database of individual agent work preferences. The preferences enable agents to rank in order fundamental choices such as start time, days off and hours per week. In contact centers that employ skill routing, an additional important piece of information is the individual agent proficiency in each skill. This factor enables the scheduling algorithm to understand the performance differences between agents with 'similar' skill sets.

Supervisors and team leaders use workforce management to plan their work week quickly and more accurately. One-on-one events can be entered easily. Using a 'meeting planner' tool, users select the required participants and describe meeting size and resource limitations. Events can be entered that move about the weekly schedule based on fit into transaction demands. These kinds of everyday events are called 'planned exceptions.'

Finally, the scheduling engine begins a complex simulation of caller arrival across queues and skills, testing how well each collection of agent schedules meets service level requirements. Solving this problem manually is impractical. More sophisticated scheduling engines consider agent skill proficiencies when building optimized skill schedules. While this adds complexity, the resulting schedules are easier to manage for service consistency and/or financial results. In any case, the output is a set of individual agent schedules that meets the transaction demand and service level requirements, with the fewest number of labor hours, and grants as many of the agent's preferences as possible. Since labor hours represent the overwhelmingly largest expenditure in a call center, the use of forecasting and scheduling software can yield hundreds of thousands and even millions of dollars saved. This is the first level of return.

Working The Plan
With a set of schedules in hand, the operations team enters into the real-time world of plan execution. As the center's day unfolds, the actual transaction demand is compared to the forecasted demand. Small variances may not impact service level goal attainment. Larger variances may mean that the center will soon be over- or under-staffed. Either situation has undesirable consequences.

Moreover, agents will have some difficulty complying with the schedules that have been established for them. Some will report late for their shifts. Some will call in sick. Some will need to leave early. The requirements of the business may necessitate an unplanned meeting. Unplanned but necessary extended coaching sessions may be required. All these everyday events qualify as unplanned exceptions. Schedulers, supervisors and team leaders use workforce management software to enter these unplanned exceptions into the current schedule.

The deviations that emerge in the forecast coupled with unplanned exceptions create the need and opportunity for intra-day workforce management software. The software can project service levels by time period for the remaining portion of the day, given all the changes to the original plan. Thus informed, the operations team can make decisions regarding what course of action, if any, is necessary. Agents can be given time off without pay if the center is facing an overstaff situation. If understaffing is the problem, overtime can be offered to agents in-house, breaks and lunches can be rescheduled to optimize the labor force on hand and off-shift agents can be called to work.

Intra-day tools and processes are essentially decision support tools for operations management. It is clearly in management's best interests to spot overstaffing and take action to reduce idle agent time. It is also in a company's interest to spot understaffing and correct situations that may be promoting customer dissatisfaction and lost revenue. Again, workforce management software used in this way can save significant dollars or protect against lost revenue. This is the second level of return on investment.

Putting Management Into Workforce Management
Workforce management software solutions continue to evolve to meet the new, emerging needs of twenty-first century contact centers. The focus of forecasting and scheduling is overwhelmingly oriented to cost control and is tactical in nature. It is all about efficiency. Management, by definition, is concerned with much more than cost control and efficiency. Management practice is also concerned with developing the full potential of employees and ensuring that the contact center's collective efforts are truly effective. Effectiveness addresses issues such as revenue and profit enhancement via direct selling or activities that increase customer satisfaction and loyalty. This business imperative has caused elements of performance management to become integrated in certain forecasting and scheduling solutions.

While the reporting function in many forecasting and scheduling systems often includes agent performance, there is a sharp distinction between reporting and performance management. Reporting is characterized by familiar metrics such as average handle time and schedule adherence and is a snapshot view that typically lacks a context. Performance management is characterized by the automatic calculation of key performance indicators (KPIs), such as cost per contact, and provides a trend analysis that answers the automatic question, 'Is the agent improving, holding steady or falling in performance?'

Another critical difference between re-porting and performance management has to do with the team level views afforded to the supervisor. Instead of using scare time resources to analyze what information is hidden in the reports, performance management cuts to the bottom line by providing team leaders and supervisors critical information about agent performance that enables and empowers smart coaching and mentoring efforts. In addition, performance management functionality provides immediate feedback on KPIs, usually via a standard browser, that permits agents to engage in self-correction and proactive improvement behaviors.

A powerful reason for integrating performance management capabilities into twenty-first century workforce management systems is to close the plan-execute-evaluate process loop. Earlier, we saw that some scheduling engines can consider individual agent skill proficiencies as the schedules are generated. By integrating performance management capabilities into forecasting and scheduling, skill proficiency factors can be established with precision, enabling the creation of better schedules that need less frantic intraday machinations by the operations team. Concentrating on center effectiveness as opposed to a relentless quest for cost reduction yields the third level of return on investment.

Best Practices Irony In Workforce Management
With so much money potentially at stake and so much capability loaded into workforce management solutions, one might conclude that the actual practice of workforce management is highly refined and firmly focused upon cost reduction and revenue enhancement. Surveys of actual workforce management practices indicate a troubling and very different picture.

It is generally understood that the following initiatives are fundamental to achieving service level targets with a minimum of paid agent labor hours:

' Expanding the number of shift definitions,

' Limiting consecutive days off,

' Using part time agents, and

' Experimenting with different shift lengths (e.g., 4-hour, 5-hour, 10-hour).

Usually, the workforce management software permits operations teams to perform 'what if' analysis in order to quantify the impact on labor costs of each initiative bulleted above. Presumably, a clear financial business case can be developed for each initiative.

Recently, the Society of Workforce Planning Professionals (SWPP) presented the results of a survey performed in the fall of 2002. The survey polled over 200 respondents. The demographics of their poll avoided the statistical skew that plagues much contact center research ' the impact of small centers whose problems and available solutions are simply different from medium and larger centers. The SWPP found the following:

' 17 percent said that 'all' their agents worked a '5 x 8' shift.

' 58 percent said that 'nearly all' their agents worked a '5 x 8' shift.

' 63 percent said that 'none' of their agents worked a '4 x 10' shift.

' 75 percent said that they 'never' use a split shift.

' 56 percent reported 'no' alternative shifts even defined and available (other than four-hour part time).

Workforce management software and best practices leading to optimized agent labor utilization are available, affordable and well understood. It seems, however, that many operations teams don't realize the software's full potential. Why is this?

The Last Piece Of The Puzzle
This failure stems from the operations team's inability or unwillingness to institute change. I speculate that they worry their agents will rebel against the changes. The worst imaginable outcome is that the agents will walk out the door. Paralyzed with fear and uncertainty, operations teams settle for minor improvements instead of realizing the full potential of the software.

This is precisely why professional services are so critical to successful implementation of workforce management solutions. Professional services consist of several related yet diverse activities. Most vendors will provide technical consulting services that ensure your software is up and running fast and is seamlessly integrated with your other business systems. Some will be willing or able to deliver business process consulting that helps you build a new workforce optimization strategy and implement new techniques and processes throughout your firm based on best practices. What companies really need, however, is the key factor for success ' change management.

Change management confronts the natural resistance people exhibit to any and all changes in their lives. It is equal parts science and art, which ultimately means that only specially trained and motivated people can be effective at it. At the bottom of change management is the knowledge that people don't resist change so much as they resist being changed. If the reasons for the change are well communicated and discussed, and the employees fully brought into the discussion, change is less traumatic and easier to accept.

Workforce management software, largely unchanged in its 20-year history of use in contact centers, is responding to the new demands and realities of the early twenty-first century. Moving beyond its focus on agent deployment, it now includes tools and processes that ensure the interactions between agents and customers are truly effective in driving revenue and profit higher through the inclusion of performance management.

William Durr is chief evangelist of Blue Pumpkin Software (www.bluepumpkin.com), a provider of enterprise workforce optimization solutions.

For information and subscriptions, visit www.TMCnet.com or call 203-852-6800.

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