Andrew McNeile, Chief Customer Officer (ThinScale)
Success leaves clues.
It was a great privilege during the early 90’s to be part of the explosion of Michael Dell’s business in EMEA. It evolved from a 140-employee business in the UK when I started, to a $10 billion unit over that decade.
And it was a particular privilege to witness Michael at work first-hand.
In a business where margins are very tight, there was one critical area (of many) where Michael especially excelled; the mastery of operational detail.
He created an environment where fingertip knowledge of key business data points was a base level expectation of senior executives. After all, these are the levers of operational excellence and the parameters of the P&L.
I recall one instance where the detailed understanding of these operational metrics was a determining factor in Dell’s out-execution of, and dominance over, a potential competitor.
It’s a powerful story, by the way. DM me on LinkedIn if you’re interested in hearing it.
But why do I highlight all of this?
Because I have seen that similar opportunities exist within the BPO and contact center space for executive leaders to drive financial and competitive opportunity, through a closer analysis of the operational data.
To put it plainly, there is gold to be mined from the data that lies beneath your feet. What I want to give you here is a flavour of where those opportunities lie.
Pointing towards the gold
“The greatest good you can do for another is not just to share your riches but to reveal to him his own.” -Benjamin Disraeli
I was reminded of this quote recently by Anne Bibb, CXO at SupportNinja. And that’s what I aim to do here, highlight where some hidden riches may lie in your organisation.
BPOs, and by extension contact center operations, live with overall margins around 8% and yet they operate at significant scale. Cash flow too is often a critical item for CFOs. And when we dig into the operational details we find that money is being needlessly squandered, particularly on hardware.
Whilst it’s clear that the pandemic has washed through like a tsunami and changed our working structures, practices, and expectations forever, many are continuing to operate on inefficient, pre-pandemic principles. And pre-pandemic assumptions.
We continue to accept things that we know don’t make sense, simply because that is the way we have always done them. We shrug and write them off as “just a cost of doing business”.
Let’s be specific.
Panning for gold
There is one aspect of contact center operations that is perhaps a greater opportunity than any other. That’s shipping out corporate PCs and laptops to agents who will never join the company. They accept the job but by the time your device has arrived they’ve grown tired of waiting and accepted another position somewhere else.
On average, to get 1,000 agents into production a contact center will recruit 1,500 agents. At the point of recruitment, agents will be shipped a device for them to work on. This is part of the significant delay in getting an agent on board and operational and creates a negative agent experience. Consequently, this contributes to the attrition gap between the point of hiring and actual production.
So we ship 1500 machines to get 1000 agents up and running. We shrug our shoulders, pay the bill and carry on. And we pay no attention to the significant impact it has on the 8% margin, mostly because we have not done the due diligence to understand the true costs of logistics, device recovery, administration and excess stock to cover the displaced, broken and in-transit.
And that’s before we try to recover the 500 missing devices. I’ve heard reports of BPOs offering financial incentives to the no-shows just to get back what is rightfully theirs! The wasted resources, time and money, is staggering.
And this is where we see a glimmer of the gold to be mined.
Extracting the gold
All the top 10 global BPOs now are clear that secure BYOD (Bring Your Own device) is possible and have programs in place to deliver it. And this approach is dragging day 1 attrition down from that 50% mark to single figures. The margins are beathing more comfortably as result.
But even if your end-customer insists that production must be done on corporate machineshy would you not implement secure BYOD for the onboarding phase? This would allow a new hire to quickly move through the onboarding and into production. And when they are in the system, showing evidence of their commitment to you, then send them a corporate device. Better agent experience, faster deployment and significant cost-savings on hardware.
Why is this not being done by every BPO and contact center? Because one needs to have run the detailed numbers to understand the operational impact of changing behaviour and many teams have not run the cost comparison with all the factors to see it.
But increasingly senior execs in BPOs are getting detailed cost comparisons run to truly understand all the impacts and slowly things are starting to shift – the best in class companies are already on the move.. The comparison reveals the significant financial impact that a change in approach can have.
To make a proper comparison between device shipment and secure BYOD the factors one needs to consider are attrition rates, machine cost, amortisation period, agent estate size, device recovery rate, shipping cost, logistics team size, days to recover machine and average number of devices per estate size (to manage the operational flow).
We have developed a model that calculates all of this and presents a clear P&L and cash flow impact. I’d be very happy to work through it with you.
Typically, for every 1,000 agents a BPO or contact center has a clearly realisable savings opportunity of $0.5m annually, which would flow straight to the bottom line. And in times where the BPO or contact center is significantly scaling the cash flow impact will be much greater.
On top of this, some BPOs have seen such improvement in agent experience and attrition rate improvement during the recruitment cycle that the savings opportunity from the talent acquisition side has been 2x that of the core logistics savings, and additional to the logistics savings.
Naturally, you are likely to have many questions about BYOD aside from the cost-saving implications. You might be curious as to its security, market adoption, how it impacts day to day service delivery and so on.
I welcome these questions and would be more than happy to discuss how other organizations within the BPO and contact center space have successfully transitioned to BYOD (either fully or partially).
I’d be happy to talk through the use cases mentioned here with you, as well as working through the P&L calculator we’ve developed.
Andrew McNeile, Chief Customer Officer at ThinScale