Copyright 2005-2015 Page 1 Effective Operations through Sigma Designs James C. Abbott 864-297-9598

Copyright 2005-2015Page 1

Effective Operationsthrough Sigma Designs

James C. Abbott

www.CallCenterProfessor.comwww.EffectiveCallCenters.com

864-297-9598


How long would it take you to change a flat tire?


How long is a competitive pit stop?

Merriam-Webster dictionary defines the Goal as

– 1 the terminal point of a race

– 2 the end toward which effort is directed

The words and definitions are key

The vision requires that we set the bar high


A 21st century call center optimization requires we establish and solve simultaneous equations

Optimum call center =

+ + +

Other possible equations

Customer experience

Cost management

Knowledge management

Staffing

Triage Risk Vendor More


An effective operation requires three areas of knowledge with a comprehensive architecture

•Focus on process & proactive decisions

•Brilliant execution

•Division of Labor

•Continuous Improvement

•Dynamic adjustment

DesignDesignFor a simple operation and

minimal variation

•Understand & apply science

•Engineering

•Process Design

•Factoring

MetricsMetricsFor effective

decision-making

•Strategic View

•Tactical View

•Running the operation with metrics

ManagementManagementDynamically exert control of the operation

Science

Process Principle


Operational Principles make the building of an effective operation understandable by all

Product / Process

1st A fundamental understanding of both the product and process is essential to improvement. The underlying component for improving the product is the process.

Division of Labor

2n

d Division of Labor is the framework for all aspects of decision-making. It must be clearly understood to separate the policy, strategic, and tactical decisions.

Base Camp

3r

d An effective operation must be built on a base of correctness, consistency, and capability.

Structure

4th Operational excellence requires foundational structure. This foundation of structure, order, and arrangement is comprised of quantitative and conceptual homogeneous groups.


The goal of the design is to provide Value and Quality

Performance - Meet or Exceed the Customer’s Perceived Expectation

Our Design must give equal importance to each leg (performance, time, and cost). Giving more or less importance to one will cause the

operation to be ineffective

Cost - While Reducing Cost

Time - And Delivering the product when the Customer wants it


An effective operation provides a great customer experience with the lowest cost

“The fact is that all U.S. midsize cars contain the same parts count, the same engine and transmission technology, the same safety equipment, the same ABS brakes and traction control, the same or similar seats and interiors—and many of these parts even come from the same suppliers. A Chevrolet Malibu's material cost is within a couple percent of that of a BMW 3-Series.”

I had a Vice President in a class ask me, “What if we just want low cost.”

You can’t have low cost without a great customer experience.

Bob Lutz: Life Lesson From the Car Guy -June 11, 2011,


With the hard work done in design, a winning team can execute things that appear impossible

A NASCAR pit stop appears so easy we seldom pause and appreciate the work required to change 4 tires in 12 seconds.

Just overlaying expensive technology and computerization on top of the current methods makes the mess faster and bigger

It is Easy to make things Hard. It is Hard to make things Easy!!


The Impact Variability has on a Winning Team

A football team has 11 players

Football Positions


30 sec30 sec

8 min8 min

8 min8 min

8 min8 min

An everyday example can help explain science

8 min8 min

$10,000$10,000Per ClerkPer Clerk

30 sec30 sec30 sec30 sec

24.25 minute24.25 minute Average WaitAverage Wait


First-in first out is an attempt to make poor service appear fair




With a crude design we only have one option to add more people thus our costs just keep going up

16 Min Waits16 Min Waits

16.5 min Wait16.5 min Wait

8 Min Waits8 Min Waits

12.9 Minute Average Wait12.9 Minute Average Wait




Our variability increases with unintended consequences





Our cost just keeps going up and up while our customer experience gets worse

10 Minute Average Wait10 Minute Average Wait

16 min Wait16 min Wait8 Min Waits8 Min Waits

8 min Wait8 min Wait

$10,000$10,000 $10,000$10,000 $10,000$10,000


The classic approach results in higher cost, poor service, and delays

Keeping everyone busy by doing everything yields high variability processing times

These processing times result in 10 minute average waits at a cost of $30,000

Adding more people is the only solution to problems.

Thus resulting in the highest cost model and poor service

Failure to apply science is a key to why our jobs are going offshore


Applying science, we can have clear roles with processes

CenterCenterRightGuard

RightGuard

RightTackle

RightTackle

LeftGuard

LeftGuard

LeftTackle

LeftTackle

QuarterBack

QuarterBack Tail

Back

TailBack

ZZ

Right EndRight EndLeft EndLeft End

HH

CornerBack

CornerBack

NoseGuard

TackleTackle

EndEnd

LineBacker

LineBacker

SafetySafety


You can have it all by applying science with new methods & structure




Express checkout works because an engineered design removes variability


.5 min Wait.5 min Wait




9.9 Minute Average Wait9.9 Minute Average Wait


The sigma approach will result in the lowest cost with great customer experience

Processing time with no variability results in 9.9 minute average wait time and a cost of $20,000

Compared to the classic approach cost is lower and service is better

Many options are available to manage and control in an engineered center


When we compare the options, what appears to be the obvious pick is actually the high cost poor service model

10 minute average wait $30,000 Cost

EfficientEfficient

New Method & Factored StructureNew Method & Factored Structure

9.9 minute average wait $20,000 Cost

EffectiveEffective

Engineered OperationEngineered Operation

Crude OperationCrude Operation


0

10

20

30

40

50

60

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 95%

Utilization

Wa

it T

ime

Wait time curve with a processing time average of 3 minute and low variability of .3 std deviation

Hig

h W

ait


0

10

20

30

40

50

60

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 95%

Utilization

Wai

t Tim

eProcessing time variation is the largest driver of wait time and high cost

Standard Deviation = 3.0

Standard Deviation =.3

Standard Deviation = 30.00

Off the Scale

70%

81%

30%

7.0 minutes wait51% cost reduction By reducing Sigma


•Talk time•Processing time•Pickup time

Call center sigma comes in many places so the design must reduce variability

•Multiple call types presented•Topic knowledge•When, why, and what is said•How it is said

Agent

•Message and answers•Agent Uncertainty•Hold to research

CustomerPlanning

•Arrival•Volume•Staffing

•Repeatable•Reproducible

Call Scoring


Why should you want to reduce sigma and what’s in for YOU?

Company– Reduce cost by 20% and more

No repeat calls Faster and better call handling Less turnover burnout

– Increasing revenue and profit– Retain customers

Customer– Satisfaction - +20% increase and

more Reduced wait time Correct and consistent answers Faster call handling

– Wants to do business with us

AgentEasy entry into the jobCareer path and migrationBeing proficient and capable makes a satisfying workplace

–Smooth start of Job–Flawless handling of each call–No surprises–Focus on the customer–Tools to simplify the work

ManagementMany options to manage to avoid problems and be proactiveTools to coach withRapid stepped trainingFoundation for continuous improvement


A few success stories can provide insight as to the results that have been achieved


Dramatic improvement within 5 months

•Fraud, •Customer Care•eCommerceeCommerce•Recovery

•20% reduction in Cost

•10% improvement of Customer Satisfaction

•JD Power rating improvement from last place to #2

eCommerceeCommerce Measurable ResultsMeasurable Results


Division of Labor as explained in Adam Smith’s books, Wealth of Nations, is the framework for improvement

22ndnd Principle of Process Management Principle of Process ManagementDivision of Labor is the framework for all aspects of decision-making. It must be clearly understood to separate the policy, strategic, and tactical decisions. Operations make the tactical decisions of running the facility. Management makes the strategic decisions of assessing the facility’s suitability for the job. Executives make the policy decisions of providing the vision for the business.

Decisions

•Policy – •provides vision

•Strategy •Provides the facility to accomplish the vision

•Tactical•runs THE provided facility correctly and consistently

Functional

•Tasks•Processes as applied to the service industry

Physical

•Improvements from Division of Labor by

•Improved Skills•Reduced time•Focused training•Invent better tools

•These improvement will increase quality and quantity


My Life and Work by Henry Ford 1922, “Hardly a week passes without some improvement being made somewhere in machine or process, and sometimes this is made in defiance of what is called “the best shop practice.”

Henry Ford revolutionized

manufacturing by applying science,

division of labor, and standardization

Assembly line was a method for

reducing variability applying

– Division of Labor

– Standardized parts

Results

– Dramatically higher productivity

– Affordable products for the masses

– Double the workers pay rates while

reducing hours

– Created a middle class


Football players have positions and execute the process (plays) brilliantly

CenterCenterRightGuard

RightGuard

RightTackle

RightTackle

LeftGuard

LeftGuard

LeftTackle

LeftTackle

QuarterBack

QuarterBack Tail

Back

TailBack

ZZ

Right EndRight EndLeft EndLeft End

HH

The offense dynamically adjusts to

the defense setup

An effective team has clearly define roles and

responsibilities


The advantages of Sigma operations are huge plus it is the low cost model.

Pooled Agent Trying to do EverythingPooled Agent Trying to do Everything

Questions

EfficientEfficientOne Option - BodiesOne Option - Bodies

Crude OperationCrude Operation

Questions

External

Password Reset

User Security Setup

ContentContentBilling SupportStore Support

ProcessingProcessingHardware ProvisioningHardware Maintenance

LAN/WAN Complex Issues

Press 1

Press 2

Transfer

Transfer

Transfer

Ad

vanced

Triag

e

EffectiveEffectiveMany Elegant Options based on Many Elegant Options based on

the dynamics of the situationthe dynamics of the situation

Sigma OperationSigma Operation


How many pages of documentation does it take to fly a Boeing 727


A competent, experienced, and trained pilot uses tools to assure consistency

Boeing 727 Walk-around Diagram

Simple, elegant, and on one page


Just like a pilot, an agent’s correct and consistent service requires tools making the job doable

Call Control Tools

•Walkabouts define the sequence of events

•Factoring to build th anatomy of the business and processes

•Factor tables to simplify

Call Dialogue Tools

• Walkabouts define when to say

• Factor tables Simplify the customer dance

• Dialogue defines •Why we picked the word(s)•What to Say •How to say

The Agent uses the Walkabout to control the call. The call we control is shorter

and is less variable

WALKABOUT® Dependency Diagram

ProductIncoming

SystemProcess

ProductOutgoing4

Metrics

Area:

5

6

3

Abbott Associates•PO Box 26177••Greenville,SC•

•29616••864-297-9598•

www.EffectiveCallCenters.com

Incoming Call End CallGreeting

&Overview

VerifyCard Holder

Identify&

AssessResolve

Transactional Fraud

• Exchange names and identify Customer Fraud Protection

• Request Card Number

• Explain why they are in fraud – Suspicious activity

• Explain call flow

Information to verify

Levels Information required

1 CVV2 & last 4 digits of SS#

2 Out of wallet questions (from Experian)

3 Transfer to FAST(Homegrown Out of Wallet)

• Agent performs levels of verification needed to successfully verify

Level of DetailAbout Transactions

Level Details

1 -Merchant-Amount-Date

2 -Location-MCC Code

• Identify questionable activity

• Probe on suspicious transactions

• Could other users have made purchases?

• Read notes

• Agent decisions the case and adds notes

• Agent addresses any additional customer concerns (may transfer to other agent groups)

Decision Status and actions required

Decision Actions

Fraud • LSRP• Disclosures• Expectations• Quick replacement• Inform ch to follow up

if charges haven’t posted

Not Fraud • Thank you for addressing concerns

• Legit transactions• Address additional

concerns

Unable to Confirm

• Please call back • Additional information

needed• Provide number

Information to access account info

Type of call Information required

CTI Name

Non-CTI 1 of:-Acct #-Full SS#-Phone #-Full Name and Zip

The Agent uses the Walkabout to control the call. The call we control is shorter and is less variable

WALKABOUT® Dependency Diagram

ProductIncoming

SystemProcess

ProductOutgoing4

Metrics

Area:

5

6

3

Abbott Associates•PO Box 26177••Greenville,SC•

•29616••864-297-9598•

www.EffectiveCallCenters.com

Hello, thank you for calling Customer Fraud Protection. My name is (agent name). May I please have your name and 16 digit account number?

• Identify prim/sec

• Understand name pronunciation, use in conversation

• If name too hard, use sir, ma’am

We have noticed some suspicious activity on your account and in order to protect you and your card I am going to need to ask you some additional information. First about your identity and about recent transactions. Afterwards, we can address any additional concerns you may have.

May I please have the last 4 digits of your social security number?

May I have the last three digits found on the back of your card near the signature panel?

Level 2

Some of this information is not consistent with our records. At this time, I will need to ask you additional information for security purposes. I’m going to ask you three to four questions about your credit background.

Level 3

Unfortunately, some of the answers that you provided to previous questions were not correct. If you don’t mind, I would like to transfer you to an account supervisor who has additional tools to resolve the verification issue quickly and efficiently.

Did you make a charge on (insert date) at (insert Merchant) for (insert amount)?

If customer uncertain –

This merchant is located (near your home town, in state, online, etc.) and sells or provides …

Fraud

It appears that your account has been compromised and we will need to close your current account and open a new one with a new account number. (Take LSRP, read disclosures, & identify recurring charges and remind to set up on new account)

Not Fraud

Thank you for your cooperation. You have resolved any fraud concerns with have with your account and all of your charges appear to be legitimate.

Unable to Confirm

Please speak with any additional card holders to determine the validity of these transactions and call us back at 800-427-9428.

Do you have any additional concerns or questions that we can help you with today?

Incoming Call End CallGreeting

&Overview

VerifyCard Holder

Identify&

AssessResolve

Transactional Fraud

•The dialogue on the Walkabout becomes a training tool•The agent can internalize what to say and concentrate on the caller


Division of labor and standardization must form the basis for service sector effective operations

An engineered operation will include

– structure – processes – metrics – message – dialogue – covering every detail

The results will include– Higher productivity and lower

cost– Better service– Consistent message


A Sigma operation requires a Culture Change

Questions

External

Password Reset

User Security Setup

ContentContentBilling SupportStore Support

ProcessingProcessingHardware ProvisioningHardware Maintenance

LAN/WAN Complex Issues

Press 1

Press 2

Transfer

Transfer

Transfer

Ad

vanced

Triag

e

Sigma OperationSigma Operation


The leadership’s roles and responsibilities are the key first step to a culture change

Vision

•Establish the vision

•Develop an Architectural rendering of the operational future state

Architectural Leadership

•Provide the air cover for cultural change to bloom

•Build Teams with the right skills for the design revolution

Center TeamBuy In

•All team members must understand


•Principles

•The Science

•Why, what, and how that supports the design

The First StepFirst Step is the hardest.Nothing happens if you don’t do the

first step


There are three teams involved in a cultural transformation to a sigma design

Culture Change

Design Team Program

•The design requires a small elite team

•Short project duration of 3-6 months

Architect

TelephonyTech

ITTech

Engineer

Dialogue Writer

Metric Analyst

Select your design team carefully based on skill requirements

Division of Labor is keyRealistic assess your talent poolOptions to fill out the team

–Train –Hire–Buy the skills

Don’t let a lack of time, skill, or confidence; delay your return.

1st


There are three teams involved in a cultural transformation to a sigma design

Current Management Team

Is a holding action

Process

Implementation TeamIs training and

consolidating the designProject

Culture Change

Design Team Program

•The design requires a small elite team

•Short project duration of 3-6 months

•Develops the design

1st

2n

d 3rd


Planning avoids costly delays and mistakes in the culture transformation

Good and timely start

•Architectural leadership

•Architectural Rendering development

•Factoring your business & operation to build their anatomy

Detailing the Design

•Develop the center design

Phased Implementation

•Plan the transformation

•Plan for operational continuity

•Implementation to minimize risk and maximize return

Implement Continuous

Improvement

•Build a continuous improvement culture


Strategic FocusProvides the facility to accomplish the vision

Operational Engineer•Build a facility to meet the vision and policy•Assure capable facility•Assess change

Training Development

─Build content─Develop curriculum by Mgr/Dir, Supervisor, Agent─Student focused course development and maintenance

Workforce Planning

─Forecast─Capacity Planning─Master Schedule─Schedule

Call Quality & Audit

─Call scoring

Mission Control

─Coordinate & keep the total operation optimum─Real Time monitoring and adjustments─Agent redeployment─Lane adjustment─Short fall deployment

The center team has both strategic and tactical roles

Tactical FocusRun THE provided facility correctly and consistently

Operational Leader•Establish Vision•Develop policy•Assure adherence to vision and policy

Tactical Supervisor

Tactical Supervisor

Tactical Supervisor

•Agent call monitoring & scoring•Coach & mentor agents•Detect change•Real time scheduling updates

Operational Director•Assure correct and consistent running of THE facility•Detect Change•Coordinate all locations

HR

─Hiring ─Student admin─Course Delivery─Student assessment─Student coaching

•Communicate the vision & policies•Assure correct & consistent running of THE location facility•Detect Change

Location Tactical MgrLocation

Tactical Mgr

Training delivery

Center Team


First Principle of Process Management

A fundamental understanding of BOTH the product and the process is essential to improvement. Both the product and the process must be described and understood individually and separately. The underlying component for improving the product is the process.


First Principle of Process Management

Product - Noun− Result

Biscuits

Baking in the Oven

Process - Verb– Activity– Builds the Product

Process Product Balancedmetrics

•TemperatureTemperature•DurationDuration

•HardnessHardness•BlacknessBlackness

•Chip IndexChip Index•Resistance to DropResistance to Drop

Statistical Biscuit ControlStatistical Biscuit Control•HardnessHardness

•BlacknessBlackness•Chip IndexChip Index•RTD RTD (Resistance to Drop)(Resistance to Drop)

Statistical Process ControlStatistical Process Control•TemperatureTemperature•DurationDuration


An automobile’s dashboard gives real or near real time updates for decisions

Dashboard

Does your center really have a dashboard?


The metric dashboard must be dynamic and flexible to allow rapid addition and changes to metrics

Time Series

Variability

Suite of Metric

sExecutive

Aggregation

ImpactAlerts

Causal Notes


The foundation provides the infrastructure for an effective operation

•Focus on process & proactive decisions

•Brilliant execution


•Continuous Improvement

•Dynamic adjustment

DesignDesignFor a simple operation and

minimal variation

•Understand & apply science

•Engineering

•Process Design

•Factoring

MetricsMetricsFor effective

decision-making

•Strategic View

•Tactical View

•Running the operation with metrics

ManagementManagementDynamically exert control of the operation

Science

Process Principle


DesignDesign

Three areas of knowledge must be cultivated and Abbott Associates can help

ManagementManagement

MetricsMetrics

Architectural and Engineering

Services

Engineering Classes

Personal Learning CenterAnytime Anywhere

Management, supervisory, and agent curricula

CoachingCoaching

Metric Classes

Metric Dashboard


“Do YOUYOU See the Light”

James C. Abbott

“Do You See the Light”

Documents

Copyright 2005-2015 Page 1 Effective Operations through Sigma Designs James C. Abbott 864-297-9598