How to Measure Agent Performance and Capacity

The primary reason why most call center managers and supervisors are the most detested and despised persons in the BPO industry is because they are in- charge of measuring the performance of the agents. It is a constant process that without a strict and stringent procedure, sales could go down, the call center put in jeopardy and the business in danger of losing clients and customers.

The problem with most call centers is that there is a discrepancy about the way they measure individual performance. Most agents feel that when they answer the call quicker, they give better customer service. This is a false notion that needs to be corrected. The truth of the matter is that most call centers include features that are sometimes hard to control especially by the call center agent.

For virtual call center agents, this may also be the case. Employers rate each agent differently. As it should be, because performance differs when type of account (inbound or outbound), call (sales, appointment setting or lead generation) and the channel (landline, chat or email) to which these interactions were made. Each of these should be measured differently and needed to be modeled after the agent’s specific and assigned task.

When trying to measure an agent’s productivity, you must first consider the factors which the agent is able to manage. Like available time, after call work time, adherence to the schedule and talk time. Available time is the allotted time that an agent is available to receive or make a call. For most call centers, this is in the 8 to 9 hour period. After call work time is the time spent by the agent completing task such as making reports after receiving and making calls. Adherence to the scheduled time will also affect the measurement of performance. Talk time refers to the duration of time that the agent is able to talk to a customer regarding their concerns. Why are these included? As a call center, you won’t be able to predict the length of time a customer talks to a specific agent, and the agent won’t have control over it as well.

There are a wide variety of call centers out there and the variation of call types will also affect the agent’s performance. Sales based calls should be measured by the sales percentage made, drop calls and sales closure rates. This is an indication of how effective the agent is in selling a company’s product. Another factor that needs to be considered is the quality of the calls made. While some call centers will be perfectly happy with a large volume of calls coming in, what will make or break a relationship with a client or customer is the quality of the call received and made by the agents. Virtual call centers should be wary of the quality of interactions made by your agents for this is a reflection of the kind of agents a contact center has.

What are BPO Services?

Business Process Outsourcing (BPO) is the process of hiring another company to handle business activities for you. It is a subset of outsourcing that involves the operations and responsibilities of specific businesses processes to another service provider. BPO that is contracted based in another country is called Offshore Outsourcing, and BPO on nearby country is called Nearshore Outsourcing. BPO is also categorized as IT-enabled services. Some sub-segments of business process outsourcing industry are KPO (Knowledge Process Outsourcing) and LPO (Legal Process Outsourcing).

BPO is a type of outsourcing that focuses on hiring a third-party service provider to do IT-related operations, typically categorized into back office outsourcing – such as application management and development, data center operations, and also includes internal business functions like human resources, accounting and finance, and customer related services.

In the beginning, Business Process Outsourcing generally consisted of outsourcing processes like payroll, and then it grew to include employee management. Now it covers more functions that are considered ‘non-core businesses’ to the primary business strategy. Now it is common for organizations to outsource financial and administration processes, human resources, call center and customer service activities, accounting and payroll.

BPO is also frequently referred to as ITES (Information Technology-Enabled Services). Since mostly it includes business processes on some form of automation, which performed services are enabled by IT. The derivative of BPO is KPO (Knowledge Process Outsourcing), which is considered by some to be a subset of BPO, KPO includes those activities that require greater skill, knowledge, education and expertise to handle. For example, whereas an insurance company might outsource data entry of its claims forms as part of a BPO initiative, it may also choose to use a KPO service provider to evaluate new insurance applications based on a set of criteria or business rules; this work would require the efforts of a more knowledgeable set of workers than the data entry would. The current definition of KPO encompasses R&D, product development and legal e-discovery, as well as a number of other business functions.

Also coming into use is the term BTO (Business Transformation Outsourcing). This refers to the idea of having service providers contribute to the effort of transforming a business into a leaner, more dynamic, agile and flexible operation.

Small and Medium BPO Companies Urge Gov't for More Tax Incentives

Small and Medium Call Center companies urged the government for additional tax incentives to help them compete with the large companies amid the talent war and higher power rates. Among the challenges that small call center companies cited were talent recruitment, high attrition rate, government incentives and rising cost of power and utilities.

New facets of the business process outsourcing sectors are still emerging, such as small to medium sized call centers. Small and medium scale call centers (SMCCs) are flourishing and they can prove to be as strong support sector as the big operators we are seeing today. SMCCs are those operated with a capacity of 200 seats or less, and preferably at least 10 seats to ensure viability. The Commission on Information and Communication Technology (CICT), refer to these as Smites or small-and-medium-scale information technology enterprises. These call centers are becoming are becoming a strong presence in the Philippine call center industry for the up coming years. In fact, they are dispersed in the regions unlike the big call centers, and the average SMCC has 10 seats.

There are over 300 small and medium enterprises call center firms in the BPO industry. Small companies have 1,000 and below employees, medium has 1,000 to 5,000 and large with 5,000 and above. Beaver Lopez Jr., chief executive officer (CEO) of Pacific Hub, said that the incentives to SME should be different from that of the large companies to help them to cope with the challenges. Lopez said the government gives tax and holiday incentives in the first five years of operations whether large or small companies.

Edith Reilly, president of TrecPacific Corp., said the government incentives for the SMEs are not enough as the cost of doing business in the Philippines has been going up. She said the lower foreign exchange rate has also impacted the small companies because when they started, the forex was at P50 but is now down to P 43. Majority of their clients are SMEs in the United States. Aside from the incentives, Reilly also said that the government also needs to step up the quality of education in the Philippines as the English speaking skills of the graduates in the past years have been deteriorating.

Benefits of Home Sourcing

Home sourcing, in basic terms, it is outsourcing to people's homes. Many businesses - chiefly, call centers - are jumping on the home sourcing bandwagon to cut costs and reap many other benefits. Home sourcing is a win-win prospect, as these positions allow workers to obtain stable employment while enjoying the advantages of working at home. As stated, both employers and employees can benefit from home sourcing positions. Employers are well aware that many customers and clients prefer to speak with someone whom they can easily understand and vice versa. Outsourcing overseas can result in language and dialect barriers that leave callers frustrated and unhappy. Home sourcing is a solution for this problem that pleases customers while keeping overhead costs lower for the companies they are calling. Employers may even be able to benefit from special tax credits by home sourcing jobs. Many home sourcing employers hire representatives on a contract basis, which cuts the costs of benefits such as health insurance and paid time off.

Since employees enjoy the plusses of telecommuting, such as saving money on gas and no stressful commute, they can pay a lower wage than they would to full-time, on-site staff. Don't write home sourcing jobs off as not worth your time, though. These jobs are still subject to minimum wage laws and most pay substantially more than that. In addition, read Benefits of Working from Home and Environmental and Cost Benefits of Telecommuting to Work to learn more about how you might benefit from a home sourcing position.

Outsourcing has become more attractive in recent years due to improved technology and wage arbitrage opportunities. Expanded broadband access, improved call-routing networks, and cheaper computer technology have allowed outsourcing to accelerate. Wage arbitrage opportunities, buying labor where it is relatively inexpensive, have arisen in industrialized countries with significant labor costs. An American computer programmer is paid between $75-$100 an hour while a similarly skilled Indian programmer is paid only $20 an hour. The same developments that have encouraged outsourcing have also benefited the growth of home sourcing. Improvements in technology can just as easily move work to a call center in Bangalore as to an employee’s home in Salt Lake City. Similarly, the sorts of wage differences that allow labor arbitrage between countries exist within the U.S. as well. U.S. computer programmers in metro areas earn between $75-$100 an hour while similarly skilled programmers in rural areas earn only $35-$40 an hour.

Cost Cutting in the Outsourcing Business

Companies nowadays keep on searching for possible ways to cut costs. Amidst the economic turmoil, outsourcing business became popular and viable to help businesses continue their services while decreasing operational costs. As a result, cost centers, like IT departments, are prime targets for outsourcing and off-shore maintenance. The typical business script is that as the IT organization moves into maintenance mode that cost center with high overhead becomes a prime target for reducing costs. Companies have reduced their spend on IT services and business transformation by almost one fifth by turning to outsourcers, according to a survey.

Michael DeSalles, Frost & Sullivan Research Analyst, said While the U.K. outsourcing market is fully grown and nearly reached dispersion and there are important opportunities in other European countries. Central and Eastern Netherlands proposed new outsourcing contracts that deal with financial services, communications, and information technology. The cost differential in BPO operations is not adequate. The organization must certify the availability of the resources which includes infrastructure and pool of individuals. The service levels can be maintained while deducting the costs. Last year Europe became the world's highest spender on outsourcing, with companies based in Europe spending more on IT outsourcing than those based in any other region of the world. In 2010 UK companies are expected to increase the amount they spend on outsourcing back-office functions, such as HR and finance.

Call centers desire to accomplish their work efficiently in low cost. If a company wants to compete, it must deal with business operations that will be beneficial and less costly. Inbound and outbound services in call centers maintain all types of tensions. Personnel with expertise are hired to have the work done as required by their clients. Customers will be grateful if they are attended with full respect and attention. BPO services are important to make better infrastructure provide good service to the customers. Call Center activities are tedious, cumbersome, time-consuming, extra-strenuous, and demanding. Extra budget is needed in other BPO activities. The workforce handling is another task which involves setting up of individual customer care unit. Outsourcing call center activities will benefit the Company's performance.

Despite The Crisis in Europe Outsourcing Work Expected to Continue

Despite a debt crisis in Europe, are expected to continue and, in some cases, even increase their outsourcing and offshoring work to low-cost countries like India and Philippines. Though Europe is still fragile, we are certainly seeing an uptick in outsourcing, as well as offshoring from European clients. Deals are getting shorter and smaller in duration, but it certainly is increasing. To give you an idea of the 800 inquiries that we received last year from European clients, about 90 per cent asked us about offshoring, explains Gilbert Van Der Heiden, Gartners research director for information technology (IT) sourcing.

Earlier European customers started with staff augmentation but as they see the cost advantage, they are looking beyond that and want to partner at a strategic level. Other than the economic downturn and need to cut cost, European customers use a large number of contractors. Due to the immediate cost savings initiatives, they are looking at replacing expensive contractors with offshoring. IT firms also agree that Europe is much more positive to offshoring than it was before the global meltdown hit.

“The Europe crisis will not have much of an impact on Philippine IT service providers. The impact will be on valuations due to the currency movement, but this will not impact the deal flow. Similarly in the UK, the incumbent government is under huge pressure to reduce cost,” says Peter Bendor Samuel, Chief Executive Officer, Everest Group. Much more, Philippine outsourcers have been urged to turn their attention to European customers to expand their markets. European Chamber of Commerce and Industry in the Philippines executive VP Henry Schumacher said the Philippines is still unable to fully maximise the outsourcing market, which is currently being enjoyed by India. Philippines has a huge potential to even grab a bigger share. Since Europe is also aggressively looking at opportunities from emerging countries in the east, Philippines set to explore Europe since it is also the largest business process outsourcing market.

Vikram Gulati, Director of Quantum Step remarks that Europe has some serious challenges. The population is aging, and they are running out of skills. They will have to look at outsourcing and offshoring. Most of the large players have benefited from this. It is for the others, the medium-sized players, to adopt this.

Philippines Urged to Tap Europe Outsourcing Market

Philippine outsourcing companies have been urged to turn their attention to European customers to expand their markets. Now that the country is fast capitalizing on being among the world’s destinations for global outsourcing and off-shoring business, industry stakeholders here are encouraged to continue to taking advantage of the vast European market.

European Chamber of Commerce and Industry in the Philippines executive VP Henry Schumacher said the Philippines is still unable to fully maximize the outsourcing market, which is currently being enjoyed by India. "India is doing well in marketing itself as a growth location for European investors. But the Philippines has a huge potential to even grab a bigger share," he said. "Since Europe is also aggressively looking at opportunities from emerging countries in the east, now is the time for the entire Philippines to explore Europe since it is also the largest business process outsourcing market," Schumacher said. While several European companies have already come to invest in the Philippines, the lack of knowledge in understanding the European culture requires need for waging a more aggressive campaign when penetrating the foreign market. The European culture is not hard to grasp and the European Chamber of Commerce of the Philippines (ECCP) is willing to assist stakeholders here in that aspect, the association can do initial training for employees to businesses like call center.

Schumacher advised that more visibility in the market should be emphasize, including the need for a European or someone with influence speaking for the Philippines and the business environment in the country. Branding, he stressed, is also necessary when capitalizing on the highly elusive European market. The brand should professionalize Filipinos. We believe that everybody in the world has in one way or another been touched by a Filipino. The Filipinos’ individuality is important to market the Philippines to Europe, we just have to focus on the Filipinos’ capabilities.

The ECCP is currently conducting talks with the Business Process Association of the Philippines (BPAP) to pioneer a committee called “Team Europe” to spearhead an aggressive marketing campaign for the country’s O&O industry. The team will also involve other institutions like the Commission on Information and Communication Technology (CICT), CITEM and a number of individual companies.

$100 Billion by 2020: The Filipino BPO Industry is on its Way

Indian outsourcing officials recently stated that the BPO industry in Philippines is poised to become a $100 Billion industry by 2020. This is a big compliment coming from a country which has proved itself as a top BPO destination of the world.

Philippines has become a favored outsourcing destination in a very short span of time. The call center industry here has also flourished due to the majority of English speaking population. Outsourcing experts in India feel that Philippines has great potential and that their small population is not a drawback. However, for outsourcing to grow here, emphasis should be made to explore the KPO industry which deals with logical and analytical products. Along with this, the Filipino organizations should train their workforce to be able to deal with such products. Frankly speaking, this applies to every line of work. One needs to keep re inventing himself to stay ahead in the race!

Partnering with countries such as India and China will also be very beneficial for BPO units in Philipinnes. This is mainly because they are established players in the field along with having a huge, experienced workforce. Business Processing Association of the Philippines (BPAP) officials have stated that they are on course to make such dealings and that they are working towards developing a strong workforce to meet future challenges. They are also hosting the first International Outsourcing Summit in October this year.

With the amount of business expected from outsourcing, the call center industry in the country will grow exponentially in the years to come. With great developments in “next wave” cities like Cebu, Iloilo and Davao City, a great number of call center jobs will be created. Philippines is on its way up to become a leading hub for established contact centers and the time is just right for investors to make profitable investments in the country.