Case Study: Workforce Optimization Increases Profitability by 20 Percent

By Drew Robb

Alert Communications of South Pasadena, CA, found it a constant challenge to accurately predict call volumes and agent requirements. As a result, it struggled to balance the estimation of adequate staffing levels with profitability. “Labor costs accounted for as much as 60 percent of our revenue,” said Steve Covarrubias, a staff analyst at Alert Communications.

Alert Communications is no newcomer to the call center industry. It opened its first call center in Los Angeles as far back as 1949. By the 1950s, it had expanded to 19 facilities across California. Today, Alert Communications is an integrated eCRM and direct marketing outsourcing company with a total capacity of over 500 seats. It offers call center services both in the U.S. and offshore and has been ranked in the Top 50 Outsourced Call Centers for the last several years.

Alert Communications handles about 65,000 calls per month, rising to over 100,000 per month during the holiday season. Its client list includes SBC Directory Sales; Lego, USA Inc.; and Disney American Teachers Award. With such a high call volume to address and a wide range of demanding clients to satisfy, forecasting has become a key aspect of Alert’s operations.

“It is vital for us to maintain an optimal workforce so we can fully service the many clients that look to us to address their outsourcing needs,” said Covarrubias. “Failure to effectively schedule our workforce would dramatically reduce the level of service we can provide.”

Initially, the company adopted a Windows-based workforce management solution. Covarrubias liked the way the software integrated the important aspects of forecasting and scheduling in one program. He felt that, overall, it introduced tools and capabilities that changed the company’s standards in terms of workforce management. “It was a multi-skill set staffing/scheduling technology that helped us to become more effective,” said Covarrubias. “However, we never were fully satisfied with how it predicted call volumes or agent requirements.”

He explains that Alert never managed to successfully configure the various forecasting metrics. Consistent failures in analysis after analysis drove the company to rely on its own determinations on call volumes and the corresponding staffing levels.

Even the most veteran call center managers and analysts can be caught flat-footed by surges in call volume or unsuspected seasonal variations. It takes sophisticated forecasting and scheduling software to remote the guesswork. Alert Communications, therefore, decided to evaluate the Monet Workforce Management System by Left Bank Solutions, a provider of workforce optimization solutions for small and mid-sized contact centers.

“What drove us to try it was the array of forecasting capabilities. The degree of accuracy greatly exceeded our expectations,” said Covarrubias. “We’ve been able to target and maintain unrelenting accuracy when forecasting call volumes. As a result, we’ve better optimized the staffing and scheduling of our agents.”

“Since adopting Monet, we have been able to ‘bridge the gap’ by being able to output no-nonsense, highly accurate information that all aspects of our call center operations can use to make better, sound decisions,” said Covarrubias.

In the past when the company estimated labor costs, it would take several weeks before management could determine if the right decision had been made. Through utilization of the ‘what-if’ scenarios built into the software, Alert Communications can now rapidly model a series of potential changes to measure their project outcome on revenue and service levels. The results have been spectacular.

Whereas labor costs used to account for as much as 60 percent of revenue, the percentage has been reduced to 40 percent. According to Covarrubias, this equates to monthly savings of over $11,500 and a payback period of only seven weeks.

Drew Robb, a freelance writer, specializes in technology and engineering issues.

[From Connection Magazine October 2004]

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  1. Pingback: The October 2004 Issue of Connections Magazine | Connections Magazine

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