Professional Documents
Culture Documents
Table of Contents
Table Of Contents 2
Executive Summary 3
Beyond The Hype 4
The Overall Effect On The Customer Experience 5
Reduction In Talk Time 6
Increased Use Of Self Service 7
More Accurate Routing 8
First Call Resolution 10
Decreased Transfers 12
Increased Personalization 13
Proactive Contact 14
Context-Sensitive Call Treatment And Scripting 16
Simplified Agent Interfaces 17
Presence For Agent And Knowledge Worker Resources 18
Adding Multi-Channel Capabilities 19
A Vendor-Certified Solution 20
Appendix A - Roi, Npv, And Irr 22
Appendix B - Contact Centers 27
Appendix C - Cti Contact Center And Crm Integration 30
Executive Summary
Every project manager understands the need for an accurate return on investment
(ROI) analysis before starting a big project, even more so when it is a critical project
like the integration of customer relationship management (CRM) applications with
computer telephony integration (CTI) and multi-channel contact centers. Without an
accurate ROI, budgets and projects can be delayed or cancelled.
This informational paper cuts through the hype and shows how busy department
managers - including Sales, Call Center, Service and Support, and IT managers -
can accurately calculate contact center and CRM integration ROI for their specific
situation.
Organized to let managers quickly calculate the overall ROI of the integration, the
paper is divided into sections to let the reader select relevant metrics for estimation.
There are also appendices with handy definitions of ROI, NPV, IRR and other terms
used.
Some CRM and Contact Center ROI calculators in the past have been inaccurate
because they were overly aggressive. They sometimes included overarching
assumptions about how bad the current situation is “before the project”. Then, by
comparison, the great way things would operate “after the project” made the ROI of
the integration project overly inflated in its predictions. A CFO or CxO can quickly
shoot holes in a bad ROI model.
That is exactly what this informational paper provides. Each section details one area
of potential ROI. It provides industry standard metrics for each. To calculate ROI for
a particular scenario, all the reader has to do is go through the sections and ask
“Does this apply to my situation?” and “Are my metrics different from the example
provided?”
When it comes to contact center CRM integration ROI analysis, the overall effect on
the customer interaction must be examined. The objectives of this integration are to
improve the customer experience, and to improve the operational and IT efficiency.
Significantly Reduce Hold Times -Through more efficient and effective servicing
by agents, reduction in talk time, more accurate routing, and decreased
number of transfers from agent to agent.
Customer Identity Verified “Once” - Call prompt for account number or ANI,
attached to call throughout.
Expand Self-Service Options - IVR with more personalized options; opt-out with
„call data‟ for quick identification, and proactive contact.
Vendor-certified solution
Since staffing can account for 70% of the cost of a Contact Center, improving the
efficiency of the staff can easily provide a strong ROI argument.
In order to see if these ROI elements are applicable to an organization, the company
should ask the questions:
A close look at the answers to these questions will place the company in a good
position to calculate a realistic ROI for reduction in talk time.
By passing User Entered Data (UED) to the agent when calls are transferred from a
self-service IVR system to a live agent, customers
gain confidence that they will not be asked to
provide all of their information again to a live agent.
This will encourage them to enter the data to the
IVR system and not simply “zero-out” to a live
agent whenever they encounter the IVR system.
The combination of passing along UED with the function of agent screen-pops
typically increases self-service usage by 5%.
The questions the department manager must ask in order to gather an accurate
assessment of the ROI for increased use of self service are:
If the contact center and CRM integration project includes a routing element, then
this aspect should be considered as part of the ROI. Routing may be manual or
automatic, and involves an examination of the
call attached data (CAD), which is either collected
from the phone call details, or by user entered
data into an IVR application. The CAD is then
used to perform a lookup into the CRM database
to make a routing decision. This routing decision
is based largely on the purpose of the call. An
inbound sales or marketing call may be routed to the department handling the
product requested or may be routed by the priority level of the customer who is
calling. A service and support inbound call center can implement more accurate
routing by skill set or seniority of agent to handle larger more important customers.
When companies can go beyond routing with old IVR methods, they accrue the
biggest benefits of more accurate call routing. If companies can expand the routing
accuracy technology to perform a CRM lookup within the IVR, huge savings can be
achieved. For example, in the insurance industry, if the CRM record of the caller
indicates that there is a pending claim, then the IVR can report the status of that
claim, possibly avoiding a live agent call and keeping the call self-service. If the
caller requests a live agent, the IVR can route the call to the adjuster handling the
claim, greatly increasing customer satisfaction.
More accurate routing can save time re-routing the call - commonly 60 to 120
seconds faster than having the wrong agent talk to the customer first - and can also
increase customer satisfaction, and thereby retention. There is commonly 2% to 8%
improved customer retention for this element alone.
The questions the department manager must ask in order to gather an accurate
assessment of the ROI for more accurate routing are:
To what extent does incorrect routing affect the performance of the contact
center?
To what extent does incorrect initial routing affect the customer satisfaction
and thereby customer retention?
If the contact center and CRM integration project will include a manual or
automatic accurate routing aspect, will this have a positive impact?
How much will the call time be reduced, on average, because of more
accurate routing?
What percentage of the calls will be impacted by more accurate call routing
improvements?
First call resolution (FCR) is a common goal of contact center CRM integration
projects. The aim is not only to make great
strides in improving this metric, but also to
allow more accurate measurement of the
problem. Having a customer call in two, or
even three times to resolve the same issue is
a waste of contact center resources, and a
strong dissatisfaction issue amongst
customers. By integrating CRM into the contact center, agents can instantly see the
entire interaction history of the customer and can pass along that data seamlessly as
the call is transferred. If the CRM integration solution is certified against several CRM
applications, then the call attached data (CAD) can accompany the call as it is
transferred from an agent to a knowledge worker outside of the contact center, even
if they are not using the same CRM application. All of these factors greatly improve
the overall FCR after the contact center CRM integration project is completed.
Several analysts have researched the subject of FCR, some of them defining FCR as
being “first live agent spoken to.” For the purposes of a general ROI calculation for a
contact center CRM integration project, one must assume that if the customer
inquiry is resolved in the first contact - regardless of how many live agents were
involved in the interaction.
The greatest benefits to first call resolution come from the measurable positive
impact to FCR from technology improvements that allow agents to locate specialists
more easily. There are two basic ways that a contact center CRM integration project
can achieve this. The first way is to use the automatic call distributor (ACD) to
manage queues by expertise. The contact center agent, when they recognize that a
special expertise is needed to resolve an issue, can transfer the call to the next
available agent in that expertise queue. This has the benefit of using the extensive
efficiency and optimization technology available within the contact center software to
optimize performance. The second way this can be achieved is by having the
integration software perform a series of CRM “dips,” examining the database for the
information needed to route the call. For example, if a specific technical skill is
needed to resolve an issue, the agent can use the integrated software to look up the
HR records for skills, perform an availability query from the contact center, and
combine these two pieces of information to route the call to an available agent with
the salient skill set.
FCR alone can improve customer retention by as much as 15% to 30%. Another
factor to consider in the ROI calculations is the contact center agent time savings
enjoyed by better FCR. To calculate the overall time savings, one has to calculate the
time savings on those calls that have in the past required multiple calls, and then
multiply that by the percentage of calls having this problem in the past. Some
common numbers might be 30% of calls have not historically achieved first call
resolution, or 70% FCR, and when a customer must place a second or even third call,
the average extra time spent is 9 minutes. If this is improved to 75% FCR, then the
average time savings over all calls coming into the contact center is 540 seconds x
5% of calls impacted = 27 second average reduction in call times.
Once again, every corporate situation is different. The benefits of improved first call
resolution may not be as good, or in some situations, they may be much better.
There are several questions a department manager must ask before being able to
accurately assess the ROI of improved FCR. These are:
What percentage of calls fails the FCR test in the current environment?
How much time is wasted in the contact center when FCR is not achieved?
Decreased Transfers
Similar to the analysis of first call resolution (FCR), reducing the number of times a
call must be transferred can provide powerful ROI
support for integrating the CRM into the contact
center. In addition to allowing immediate viewing
of the entire history of contacts with that
customer, sophisticated CRM integration solutions
can place callers on hold and make a consultative
outbound call to a knowledge worker from inside
the CRM application. Although not as powerful an improvement as FCR, decreasing
the number of times a caller is transferred does have a measurable improvement
and can reduce call times 60 to 120 seconds overall. However, rather than use
common industry values, the department manager must examine the situation at
their particular contact center.
Questions that can help determine the accurate ROI of decreased transfers are:
Does the contact center have an issue with a high number of call transfers?
What percentage of calls currently gets transferred?
Increased Personalization
Calculating the ROI of increased personalization must really be divided into two parts
when it comes to contact center and CRM integration. The first part is the increased
personalization for the live agent that comes
from having all of the customer information at
their finger tips even before answering the call.
The second is self-service personalization, which
comes from letting a CRM data dip: customize
messages on hold; provide a specialized IVR;
announce expected wait time; give prompts
about issues; or deliver personalized information such as “flight delayed.”
For example, in the airline industry, it was discovered that if a caller was in the
middle of a trip, then there was an 80% likelihood that the purpose of the call was to
change the time or date of the return flight. It is easy to see that in this situation a
huge savings can be achieved through contact center CRM integration by simply
having the IVR provide alternative flight choices without having the need to go to a
live agent.
then the average call time savings of self-serve personalization from contact center
CRM integration can projected to be around 27 seconds.
What percentage of calls currently get handled live that could have been
handled via self-service prior to the CRM integration project?
How much time would be saved for every call that was handled live previously
and is now handled via self-service after the CRM integration project?
Proactive Contact
The inclusion of proactive contact as function for an outbound contact center applies
only to certain companies. Whether it‟s the placing of outbound calls, e-mail, IM,
etc., companies maintain customer satisfaction and reduce inbound live call agent
usage by sending out reminders and information to customers proactively, before the
customer calls in.
For example, in the situation of gift and prepaid cards, inbound contact centers often
are inundated with callers wanting to know their remaining balances. A simple SMS
text message to their mobile phone indicating balance
changes is a quick way to reduce the inbound
inquiries significantly. This is an ROI element that
must be analyzed on a company by company basis.
Since the situation can vary widely, the reduction of
inbound live agent traffic can be impacted across a
wide range from a reduction in calls by 25%, all the way down to no reduction at all.
For illustration purposes, if average call hold times at the inbound contact center are
9 minutes, and these calls can be reduced in volume by 25%, then an average call
savings of 540 seconds x 25% = 135 seconds can be achieved.
In order to accurately approximate the ROI achievable from proactive contact, the
department manager must examine their particular situation. Some questions useful
in determining an accurate estimate are:
What is the average call time of those calls that are eliminated or reduced
thanks to proactive contact?
Context-sensitive call treatment and agent scripting are important reasons for
enterprise contact centers to take on a CRM integration project. By allowing agents
to read from a customized script or otherwise respond to customer inquiries based
on the call attached data (CAD) combined with information stored in the CRM
database, new upsell and cross-sell opportunities can be created. This rise may be
the result of a large number of products or package options that would be impossible
for a contact center agent to memorize but can be presented to the agent in the
context of the customer information. The ROI measure for this aspect can vary quite
widely from one company to another so it is important to take a down-to-earth view
of this metric for the particular situation at hand.
What is the current upsell and cross-sell revenue generated inside the contact
center? Outside the contact center?
How much does the company plan to increase upsell and cross-sell
opportunities as a part of the objectives for the contact center?
Improving the efficiency of the staff can provide a strong ROI argument. Simplifying
the agent interface can be a big part of this
process improvement, especially if it involves
reducing the number of applications open
simultaneously on the desktop. Typically, a
contact center agent has a CRM application; a
window with soft-phone controls; frequently
dialed numbers phonebook; agent status
reporting buttons; separate applications for context related info; and more.
Streamlining the agent desktop can improve the call times by 5 to 10 seconds per
call, including the wrap-up activities. These improvements come from the telephone
controls appearing inside the CRM application, carrying the call attached data with
every communication event, and providing an integrated user interface for post-call
wrap-up.
The other important thing to remember about this ROI concept is the improvement
in accuracy it enables. By allowing the agent to handle all of their activities from
within a single application window, errors are minimized and the overall efficiency is
improved. How much agent satisfaction and agent retention can be improved as a
result is an important facet to consider for ROI. Acquisition of new contact center
agents may cost the company tens of thousands of dollars annually, so even if agent
retention is only improved by 10% thanks to the improved working environment on
the desktop, this can provide a significant ROI element.
In order to see if these ROI elements are applicable to an organization, the company
should ask these questions:
The type of call transfer used makes a big difference to customers. Being transferred
to a voice mailbox, or even worse, another long wait in hold queue, is not a pleasant
experience. Having information about the presence
of agent or knowledge worker resources can make
a big difference in customer satisfaction and
customer retention. Depending on the severity of
the current problems with cold transfers, which are
made without giving any notice or explanation to
the recipient or the caller, presence information alone can improve customer
retention by as much as 5% to 10%.
These questions can help determine if presence information can play a role in the
ROI estimation for a particular enterprise:
To what extent does warm vs. cold transfer of calls currently affect the
customer satisfaction and thereby customer retention?
In order to accurately assess the predicted ROI achievable from adding multi-channel
capabilities to the contact center CRM integration project, the decision maker must
ask the following questions:
A Vendor-Certified Solution
Calculating the ROI over the lifespan of a project also means calculating the benefit
over the life of the integration itself. If there are hidden costs that pop up after the
initial integration project is completed, these can greatly diminish the overall benefit
to the company. Many companies look for solutions that are vendor-certified
because of two big issues that tend to arise after the project deployment: software
upgrades and customizations.
Whether it involves a patch to fix a bug, or a major upgrade to add functionality and
extend support contracts, a non-certified solution will add unacceptable risks that
can only be mitigated by the addition of manpower costs to research, modify, and
re-test the integration. These added costs can be up to 20% of the original
manpower cost over the life of the deployment and are separate from and in addition
to any annual support fees for hardware or software.
In order to accurately assess the predicted extra costs - and thereby the hits to the
projected ROI - from using a non-certified contact center CRM integration, the
project manager must ask some of the following questions:
Are there likely to be any customizations of either the CRM application or the
contact center over the life of the deployment?
How much money does the company intend to spend on customizations over
the life of the deployment? As a percentage of the future customization costs,
how large will this incremental re-integration effort be for every
customization?
ROI
Commonly called rate of return (ROR) or return on investment (ROI), or sometimes
just return, ROI is the percentage of money gained or lost on an investment. Some
terms used to describe ROI are interest, profit/loss, or net income/loss. The original
investment may also be referred to as the capital, project cost, annual cost, or the
cost basis of the investment.
ROI can look at a past, current, or the estimated ROI on a future activity and is
usually expressed as a percentage (%).
So ROI is therefore simply the total return divided by the initial investment.
Even though ROI does not include time in the formula, many people associate ROI
with time. ROI is often implied to represent an annualized % in financial descriptions.
For example, a question such as “what‟s the ROI of that stock purchase” might imply
that the answer be annualized. So first calculate the ROI of the stock transaction,
and then annualize it by seeing how much time the stock transaction lasted and
seeing how many times that time would fit in a year.
Another way ROI is commonly used is to express the time required to go from a
negative to a positive value.
So, for example, if a project costs $1M to implement, takes 2 months to implement,
and once implemented generates an extra $250K per month for the company, we
can calculate the annualized ROI, or also predict how many months before the
project break‟s even.
For the annualized ROI, we assume 2 months of project ($1M) and 10 months of
extra revenue (10 x $250K = $2.5M)
For the break-even ROI we see how many months before the project goes from
negative ROI to positive ROI
So it takes 7 months to achieve a positive ROI. This is also written as “The Project
has a seven month ROI.”
NPV
Net present value (NPV) takes the concept of ROI one step farther. It not only
calculates how much extra money the company is making based on an investment,
but it also incorporates the value of that money at the end of the investment period.
In other words, if in order to complete the project the company had to borrow the
money (pay interest) or pull it out of the bank (give up earning interest) then the
longer the project takes to complete, the more “expensive” that initial investment
becomes.
How much the money “costs” every month is called the “discount rate.” The discount
rate is determined by the company based on many factors but usually it comes down
to the average cost of capital after taxes. Instead of a “discount rate” the company
may use a “required rate of return”, such as 10% per year. If investments make less
than 10% per year over the investment period, then they are not considered to be
meeting the required rate of return.
For NPV, time is usually divided into chunks (one month chunks, or one year chunks)
over which the discount rate applies. To calculate NPV over a time period, one has to
add up all of the Present Values (PV) for each of the time chunks, as follows:
Example
X Corporation must decide whether to introduce a new product line. The new product
will have startup costs, operational costs, and incoming cash flows over six years.
This project will have an immediate (t=0) cash outflow of $100,000 (which might
include machinery, and employee training costs). Other cash outflows for years 1-6
are expected to be $5,000 per year. Cash inflows are expected to be $30,000 per
year for years 1-6. All cash flows are after-tax, and there are no cash flows expected
after year 6. The required rate of return is 10%. The present value (PV) can be
calculated for each year:
The sum of all these present values is the net present value, which equals $8,881.
Since the NPV is greater than zero, the corporation should invest in the project.
IRR
Internal rate of return (IRR) is how a company compares NPV to other ways money
could be invested. Instead of implementing a project, the company could put the
money in the bank, or invest in a different project. Comparing the NPV of a proposed
project to the NPV of alternative investments can be accomplished by comparing the
IRR. A project is a good idea if its IRR is better than the alternatives.
To calculate IRR, we calculate the NPV using a variety of discount rates (or
equivalently, rates of return). The rate of return that makes the NPV equal to $0, is
therefore the IRR.
In other words, over the life of the project, we calculate the NPV using the formulas
described above and by using the company‟s agreed “required rate of return”. If it
turns out we can break even with an even higher rate of return, then that‟s a good
thing.
The formula for IRR is really the same as the formula for NPV, except instead of
setting the discount rate to a fixed value and solving for the NPV, we set the NPV to
$0 and solve for the discount rate:
A Contact Center is a broad term for a solution that allows a group of agents to take
inbound and outbound telephone calls, and extends this into additional channels such
as e-mails, web-chat, Fax, and other communications (multi-channel). Contact
Center solutions are available from vendors such as Aspect, Avaya, Cisco, Nortel,
and others.
Most major businesses, enterprise size companies, and more and more, small and
medium size companies, use contact centers to interact with their customers.
Contact centers provide a variety of important functions including:
Service
Support
Inbound Sales
Outbound Sales
Help Desks
Over the years, the science of contact centers has become more advanced, with
mathematical formulas covering queuing theory, multi-channel communications
handling, integration with database and CRM systems, intelligent outing, service
level management, work force planning, forecasting of traffic, planning of staff shifts,
and naturally operations research.
The science isn‟t the only thing that has advanced in contact centers. Customer
service has also improved. Contact centers are constantly measuring not only
numerical metrics, but also qualitative metrics of quality, customer satisfaction, and
general demeanor of contact center staff (agents).
Contact center agents are usually grouped, either by physical location, or virtually in
modern communication networks. The types of information collected for groups of
agents can include the number of agents that are:
Logged in
In wrap up mode
Percentage of calls that completely resolve the customers issue (also called
First Call Resolution or FCR)
Staffing still accounts for 70% of the cost of a contact center, and so the
management of the staff is tantamount for cost control. Modern methods to keep
down costs in contact centers include multi-tiered support, and use of call attached
data.
Modern contact centers are often organized into multi-tiered support systems for
more efficient handling of calls. For example, an Interactive Voice Response (IVR)
system could ask the caller basic questions about their call and even handle
database lookup responses. After that, a live operator can direct inquiries to the
appropriate department. If more assistance is required, the call goes on to the next
tier where most issues can be resolved. If another tier is required, highly skilled or
technical staffers (often called “knowledge workers” or “low repeat agents”) are
used.
Call attached data can be derived from Calling Line Identification (CLI) Automatic
Number Identification (ANI), IVR collected data (such as account number, case
number, or product being ordered), or data collected by an agent during a call. Call
attached data can be used to prioritize callers, route callers to the appropriate agent,
or otherwise more efficiently manage the call.
Contact Centers and CRM Integration simply means that the contact center
functionality and the CRM functionality appear to the agent (the user) as a single
integrated solution. This
makes agents faster, more
efficient, and more effective
and courteous in the eyes of
the customer.
It might mean increasing capacity without hiring more staff by having faster
contact handling by giving agents a single application for both data entry and
call control.
Used every day by thousands of agents around the globe, AMC‟s integration solutions
are deployed with leading CRM application providers including SAP, Oracle Siebel and
PeopleSoft CRM, Microsoft, and salesforce.com and leading contact center solution
providers including Aspect, Avaya, Cisco, Nortel and others.
Reflecting more than 14 years of experience with many of the world‟s leading
companies, our customers include over 200 innovative organizations that rely on AMC
solutions to better serve their customers. AMC is a privately held software
development company founded in 1995 and headquartered in Richmond, Virginia.
All other product and company names mentioned are the property of their respective owners and are
mentioned for identification purposes only.