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Government Regulation of Service Levels for Telephone Company Call Centres in Canada – Work in Progress –. Armann Ingolfsson Samina Khandakar, Tarja Joro armann.ingolfsson@ualberta.ca School of Business, University of Alberta Edmonton! Workshop on Call Centers, Montreal, May 11, 2006. - PowerPoint PPT Presentation
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Government Regulation of Service Levels for Telephone Company
Call Centres in Canada– Work in Progress –
Armann IngolfssonSamina Khandakar, Tarja Joro
armann.ingolfsson@ualberta.ca
School of Business, University of AlbertaEdmonton!
Workshop on Call Centers, Montreal, May 11, 2006
Calgary
Motivation
• How should planning problems for call centres be posed?– Minimize cost, s.t. service level above a
standard in every period– Minimize cost, s.t. aggregate service level
above a standard• Answer depends on the context• For regulated public utilities, answer depends on
the form of quality regulation
Related Literature
• Economics of quality regulation– Highly stylized game-theory models– Typical “firm’s problem:”
• Max profit = P(x, q) x – C(x, q), s.t. q ≥ MQS• x = quantity, q = quality, P = price/unit, C = total cost
• Regulating telephone service quality– Institutional issues
• Little attention to operational issues – how to deliver a specific level of quality– In economic terms: what is the structure of C(x, q)?
TelusSask
TelMTS
Bell
Aliant
NorthWestTel
Telephone Companies in Canada
The Regulator: CRTC
• Regulates telephone companies, broadcasters, cable service
• Timeline:– 1876: Bell patents telephone– 1893: Rate regulation starts– 1968: CRTC formed– 1982: Service quality regulation starts– 1992: Long-distance competition– 1993: Telecommunications act– 1997: Local competition
How the Regulation Works
• Sixteen Quality-of-Service Indicators
• Each indicator has a pass/fail standard
• Companies self-report every three months
• Performance reported per month
• If below standard, firm must report monthly until standard met three months in a row
• Penalties decided on a case-by-case basis
Call Centre QoS Indicators
• 3 of 16 indicators are related to call centres:– Access to business office– Access to repair bureau– Access to directory assistance
• Standard: 80% answered in ≤ 20 seconds
Questions
• What does it cost to meet the standard?• How does service level vary with time if standard
is met at minimum cost?• Influence of firm size
– 100 K – 20 M subscribers
• Influence of staffing method– Constant utilization staffing– Square root staffing
• What if the standard had to be met every hour?
Firms
Firm Subscribers
NorthWestTel 110,000
SaskTel 820,000
Telus 9,618,000
Bell 21,275,500
Assumptions
• Performance in hour t can be modeled as a stationary system:– M/M/s(t) (Erlang C), or– M/M/s(t)+M (Erlang A)
• Single employee type
• No scheduling issues
• No call volume forecast uncertainty
Notation
(i, t) = Arrival rate to company i in hour t= n(i) (t) / 250
n(i) = # of subscribers for company i = avg. # of calls per subscriber per year
[0.5 – 2]
(t) = fraction of daily calls in hour t [Example from Green, Kolesar, and Soares (2002)]
= service rate [6 per hour]
1/ = avg. patience [= 1/ = 10 min.]
More Notation
r(i, t) = (i, t) / = Offered load for company i in hour t
SL(i, t) = service level for company i in hour t = Pr{Delay ≤ 20 seconds, served}
SL(i) = aggregate service level for company i = demand-weighted average service level
Staffing methods
• Constant percentage safety staffing:
• Square root safety staffing
80.0)SL(:)(min)(*
))(1)(,(),(
iixix
ixtirtis
80.0)SL(:)(min)(*
),()(),(),(
iiyiy
tiriytirtis
Cost vs. size [Erlang C]
0.1%
1.0%
10.0%
100.0%
0.5 1.0 1.5 2.0
Avg. calls per subscriber per year
Pe
rce
nt
safe
ty s
taff
ing
Const. %
Square root
Northwesttel
SaskTel
Telus
Bell
Cost vs. size [Erlang A]
0.1%
1.0%
10.0%
100.0%
0.5 1.0 1.5 2.0
Avg. calls per subscriber per year
Pe
rce
nt s
afe
ty s
taffi
ng
+2
%
Const. %
Square root
Northwesttel
SaskTel
Telus
Bell
Service Consistency vs. Size [Erlang C]
30%
35%
40%
45%
50%
55%
60%
65%
10,000 100,000 1,000,000 10,000,000 100,000,000
Avg. call volume / year
Fra
ctio
n of
day
with
SL
>=
80%
Const. %
Square root
Service Consistency vs. Size [Erlang A]
30%
40%
50%
60%
70%
80%
90%
10,000 100,000 1,000,000 10,000,000 100,000,000
Avg. call volume / year
Fra
ctio
n of
day
with
SL
>=
80%
Const. %
Square root
Example: Northwesttel [Erlang A]
0
1
2
3
4
5
6
7
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Hour
Off
ere
d lo
ad
, st
aff
ing
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Se
rvic
e le
vel
Offered load
Const. percentage
Square root
Example: Bell [Erlang A]
0
100
200
300
400
500
600
700
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Hour
Sta
ffin
g,
off
ere
d lo
ad
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Se
rvic
e le
vel
Offered load
Const. percentage
Square root
Conclusions
• Costlier for smaller firms to meet standards• Performance may be far below standard at off-
peak hours, if firms meet aggregate standard at minimum cost
• Incremental cost of meeting standard at all hours decreases with size
• Constant percentage less costly than square root safety staffing– [For Erlang C. Not clear yet with Erlang A]
Further Work
• Benchmark: minimum cost staffing
• Finish Erlang A analysis
• Compare to regulation in other countries– USA, Brazil
Discussion: Analysis Tools
• Erlang C: Queueing ToolPak (MS Excel function library)– Demonstrate
• Erlang A: 4CallCenters software
• How should we “package” our tools to maximize their use?
Discussion: Auditing
• Companies self report performance data
• How can/should companies be audited?
Discussion: Auditing
• Approach 1: Use models to check whether self-reported data is plausible
• Approach 2: “mystery callers”
• Approach 3: ?
Discussion: Auditing
• Brazil: companies report inputs (arrival rate, service rate, number of servers), regulator uses model to compute output (SL), compares to reported output
• How should this be done?– How often?– For what time interval?– Using what model?– When should action be taken?
Discussion: Data Reporting
• What data should regulated companies be required to report?
Discussion: Monitoring
• Manufacturing: SPC charts to monitor production processes
• Why not for call centers?• Monitor:
– Service times– Abandonment rates– Forecast errors– …
• What modifications are needed for using SPC charts in call centres?
Discussion: SL Constraints
• Aggregate vs. period-by-period
• Q: what’s the value of consistency?
• Customers react to perception – expectation
• Asymmetry: negative impact of not meeting expectations likely larger than positive impact of exceeding expectations
BACKUP SLIDES
Example: Northwesttel [Erlang C]
-
10
20
30
40
50
60
700 2 4 6 8
10
12
14
16
18
20
22
Hour
Offe
red
loa
d /
sta
ffin
g
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Se
rvic
e le
vel
Offered loadConst. percentageSquare root
Example: Bell [Erlang C]
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
0 2 4 6 8
10
12
14
16
18
20
22
Hour
Offe
red
loa
d /
sta
ffin
g
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Se
rvic
e le
vel
Offered loadConst. percentageSquare root
Cost of Constant SL [Erlang C]
0.1%
1.0%
10.0%
100.0%
0.5 1.0 1.5 2.0
Avg. calls per subscriber per year
Pe
rce
nt
safe
ty s
taff
ing
Const. %
Const. SL
Northwesttel
SaskTel
Telus
Bell
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