this question can not be answered in a vacuum... is the contact center in question a single function, or does it do many things? what is the business they are in? how many agents? where are they? what are the business drivers that are causing you to ask the question?
In general, a centralized infrastructure saves money and improves operations, providing both better efficiency and better effectiveness - however distributed agents and locations can provide stability and reliability against outages, provide better coverage over times zones etc.
This is a question which requires investigation and discovery.
I made a 15 year career out of building virtual call centers. I now sell technology that allowed me to finally do what I needed to so I had central command and control over schedule, monitoring, disaster recovery and administration. In my case due to industry consolidation of Cable TV companies there were many competing agendas that made virtual call centers attractive. Since Cable had serious local franchise oversight there was a reluctance to lay off a number of people in a town to allow centralization to one central location. The difficulty of consistent training needs and technology available in the early days of the effort made the virtualization a difficult management task.
Since then technology has made decentralization a non-consideration as far as reporting, monitoring, and routing. All agents can be administrated as one group whether they are working from home, in several geographically diverse locations or in one large building. On line training initiatives like what our forum leader Kathryn Jackson provides also brings those issues under control.
It is not the technology or training that presented the most difficult problems for me to resolve. What I found was a mixed blessing and curse of company structure and politics. Since I continued to have a need to support walk in customers having CSRs available to cover lunch and vacations was a big positive. Having a local manager from a different department supporting HR needs however wasn’t so good. There were numerous issues including standardization of policies and procedures that required thought and energy to keep impact from customers. This however would have been required no matter where the centralization was physically located.
My opinion then has been shaped to say that several call centers with 100 agents would be preferable to having one 500 seat call center. Centralized command and control systems are able to remain arms length while still effective. Training staff can be adequately staffed on site, but again centralized design and process development seems to be the best practice. What I believe is not a good option is to have multiple small call centers of under 25 people that are more than an hour drive apart. If you are going to get that small I believe it is much better to look at Work At Home Agents (WAHA) since you have similar training issues, but do not gain the good will of the agent like the WAHA job satisfaction provides.
The argument will continue to be specific to the company and culture that you work. Each of us can provide insight to our experience but be careful to match the situation and needs of the business in how serious the example is applied.
I led an initiative many years ago at Verizon where we decided to centralize for the economies of scale that you can achieve from a single site location. Just a few of the benefits centralization provided us:
Consistency of training and easy access to the workforce to schedule training.
Consistency of operations, practices, and policies.
Feeder pool for promotions and development without relocation.
Flexibility to redirect or realign work from an overloaded team to a lighter workload team as business needs change without decreasing and increasing staffing across sites.
On the other hand, I worked for another company that hired me because of my centralization experience but could never make the decision to move forward with it.
Folks will say that a single site location is vulnerable to outages and that is why you need multiple sites. That tends to be easier said than done. At my last company with two active sites, when one failed, the flow of work was not smooth to the backup site and there is no way one site was capable of handling the work of two sites. Three sites would have been more reasonable for the overflow of a site that goes dark.
Whether centralized or decentralized, be sure to lock down your contingency plans way before you need them. When a hurricane enters the Gulf is not the time to put together the disaster recovery plan!
Feel free to go to my website - www.cxogs.com. I have a whitepaper on the topic. Also, you may find good material on my Blog - which you can access through the website. If you use the material, please just add a reference within whatever you are preparing. I would appreciate it.
How many is too many? I wrote under the Rants & Musings section about a client of mine with 428 call centers (http://contactcenter.ning.com/forum/topics/beauty-parlor). No matter what one thinks the meaning of the word 'is' is, 428 'is' too many. Large numbers of call centers are most often the result of growth via acquisition. Rarely today does a firm decide to build out via a decentralized platform.
Now call me a cock-eyed optimist, but the business argument for centralization is very simple, not requiring committees and white papers, just a few phone calls can prove the point, or talking with the CSRs. Allow me to illustrate with an example. One large cable operator whose name starts with the letter 'C' has several large call centers serving multiple locations. I was brought in to help them figure out why their annual customer satisfaction scores were lower than those of the KGB.
Here’s what we did that so clearly defined what the causal factors were. The CSRs were given two questions, one about billing, and one about how to resolve a technical question. None of the answers we received were the same—this had nothing to do with tenure—CSRs with 18 years experience were just as wrong as new hires. We then took these same questions to some of their other call centers. Same results, only different wrong answers, and different approaches to getting the wrong answers.
Decentralized call centers will result in differences WITHIN a call center and differences AMONG call centers. No matter how good the training it will be almost impossible to get consistent and correct responses to calls. Best practices will never happen, first call resolution will disappear into a black hole, repeat calls will skyrocket, and churn will increase. Other than that, decentralization is a pretty good idea.
Unfortunately I do not have any specific research data available (only my personal experiences and situational based preferences). However, I do have a suggestion that might be of use. You can register with Gartner (registration is free) using the link below.
Once registered, they should do a search on centralized v. decentralized call centers (use this exact phrase). Several “for purchase” articles/white papers will come up (they are each in the $200 range). Below is one that I found that appears to be close.
A Hybrid Model for Information Technology? Stick a Fork in IT
13 January 2009 | Pages: 12
Mark P. McDonald
CIOs face the need to reorganize IT. Issues related to centralized vs. decentralized IT sit at the heart of CIO decisions. Both options carry strengths and weaknesses that in the past have caused CIOs to swing from one model to another. CIOs are looking for ways to look decentralized to the business units ...
Related Topics: Centralized and Decentralized; CIO and IT Leadership; IT Governance; IT Organizational Structure
I manage a global workforce management operation. We have forecasters, schedulers, and Real Time Adherence Analysts in five countries. I have a hybrid operation due to the organization I inherited as well as the importance to focus on discipline specialization for development and skill improvement.
So for example, my Global Forecaster for Server support is in one country, but manages operations in several sites. The same for Printers and Desktop/Laptop support. In this way, I have people who are continuously moving along the skill improvement curve, and can provide backup for forecasters in other countries for planned and unplanned absences.
Schedulers can be deployed the same as forecasters or if the business user operation is large enough, then one per site. Again, continuous improvement and readily available site dispersion for backup.
We are deploying the Real Time Adherence Analysts globally since many off shifts do not have sufficient staff to warrant an on site person.
We do have published standards for each function, and part of each employee’s annual performance measurement is their adherence to global standards in the execution of their job.
You can have it both ways, it really depends on the objectives of the organization, their culture and business model. We have completed engagements where we consolidated centers and where we retained a decentralized environment. Like so much in life, one size rarely fits all. If i can be of any assistance, just let me know, I am always happy to invest an hour of my time.
416-979-8692 ext 200
I think the fundemental question is why. Why a call center should be the first question that you answer. What will it be able to do that it currently does not. Then need to look at the actual functions that the call center will perform. If a decentralized model then are their duplication of efforts. Are there different work that is to be performed? If the work is the same but just decentralized then you can make a very strong argument for centralization. If the work is similar and their are potential cynergy then the argument also can be made by requires detailed evaluation and pro's and con's. If the functions have no overlap but this is strictly related to management oversight or technology, then there are call centers that co-exist in location but operate in a decentralized model. I hope that helps. I
For many years I ran the HP Consulting Call Center Practice... I went through this drill on many occassions with our clients, and almost always it made more sense for a decentralized enviroment... however, it is not absolutely cut and dried. Let me lay out basic "Pro's and Con's" for decentralization. If you have further questions, feel free to send me an email (kfmagee*at*gmail.com)
FOLLOW THE SUN... no need to pay premium wages to agents to work the later shift in a 24/7 environment. By operating normal business hours in multiple locations, you can maximize your wage potential.
24/7 DISPERSAL - if all call centers are in one location, then any area holiday will typically shut down the center, unless you are willing to pay overtime premiums. By placing call centers in areas that don't have the same holiday schedule, you can still maintain call center operations for customers calling in during that time. For example, Christmas day is observed all over the US, South America, and most parts of Western Europe... but not so much in Japan, China, or India. Conversely, holidays observed in Russia, China, and the Phillipeans rarely overlap with North America or Western Europe... so someone is always available to service the call center.
If there is a natural disaster (think in terms of blizzard, hurricanes, earthquakes, floods, etc.) in an area where you have only one call center, your employees may not be able to make it in... or the facility may be unaccessible. With multiple sites, the risk of a widespread scenario is greatly reduced. Terrorism or the threat of instability also comes into play here.... if your existing call center is in an area of unrest, your customer base may be in jeopardy if they need to call during times of turmoil. By scattering the sites, calls can be routed away from trouble spots to facilities where business is not interrupted.
When a silo call center is the only option, anything that affects the rate in that single location goes right to the bottom line... for example, if rent goes up, or if local market economy surges, then the additional costs cover the entire operation. However, if you have multiple smaller sites, and one site experiences that same increase in costs, then the impact is minimized across multiple sites.
If your customer base is multilingual, it is easier, cheaper, and more in line with client expectations to hire someone in the general area of your customer who has the same speech patterns, linguistics, and cultural values. It is far cheaper to hire a Spanish Speaking agent in Mexico that it is to hire the same skills in the US... at the same time, it is far cheaper to hire a German native agent to deal with German customers rather than to find an agent with the same skills who can speak fluently in French, Italian, German, English and Polish to accomodate any customer call that comes in...
When you staff multiple new sites, there is the need for multiple new one-time and recurring expenses... rent and new technology are typically one time costs, but recurring costs include HR, infrastructure support, general administration, and the costs of locally stafffed management. These are all redundant to the existing single site model.
LOCAL ECONOMY & REGULATIONS:
Regional and national laws may vary from location to location, and this may incur the need for additional legal counsel, unionization rules and regulations, varying levels of minimum wages, as well as non-standard requirements for insurance, pensions, and extended family care that are not a part of your current model.
There is a greater need for increased focus on maintaining singular messages across multiple locations... not tricky, but must be a part of the expansion plan.
LINGUISTICS - if you move to a multi-national environment, there is the potential that customers will wind up with an agent who is less gifted in a non-native language... this leads to quick and impactful customer dissatisfaction.