You're in a meeting of your company's top brass.On the agenda is the development of strategies to improve the company's image and customer retention. So why does everyone keep looking at you?
Because you're the CIO.
As traditional providers of information systems, CIOs are naturally involved in decisions affecting data-intensive call center operations, those so -called phone farms-a reference to the dense concentration of employee cubicles in large centers.
But CIOs who think about technology first when addressing call centers will find themselves chasing their tails, according to Peter Perialas, senior vice president in Computer Sciences Corp.'s financial services group in Dallas. "The smart CIO is going for the underlying corporate strategy," says Perialas. As call centers become a nexus of sophisticated new information systems, this white-hot area of growth, innovation and business opportunity is becoming a priority for IS executives. The new emphasis on business drivers is prompting some significant change in IS departments and for the executives who lead them in terms of organization, external customer service and internal customer satisfaction.
Organization
About two years ago, executives at HFS Inc., a Parsippany, N.J., franchiser of travel-related companies including Howard Johnson and Ramada Inn hotels, realized their call center needs were rising faster than HFS's corporate structure could handle. They did not wait for a crisis to act. "Part of the way we have built this company is [by] maximizing our call center operations," says Doug Patterson, executive vice president of telecommunications and call center operations at HFS. Patterson and his fellow executives began looking for structural ways to make call centers more productive.
Seven-year-old HFS was faced with the double challenge of supporting its franchised businesses and their customers through call centers. The company handles telephone reservations for Avis and all of its franchisees. HFS originally gave responsibility for information and reservations systems to Patterson, then CIO. But it split those duties in October 1996, making Patterson executive vice president of telecommunications and call center operations and Dave McNicholas manager of information services. Now Patterson can focus on a 7,000-person department that spends about $150 million and handles 80 million calls annually. That call volume is growing by 3 percent to 5 percent a year for HFS hotels, hospitality businesses and Avis. Volumes are growing by 7 percent to 10 percent for its resort time-share outfit, Resorts Condominiums International (RCI).
The division of responsibility has not diluted the IS impact on the telecom department. Patterson says McNicholas's office is a few doors down from his and the two work closely as a team on numerous projects. And the HFS restructuring has had unintended benefits. "As a whole," he says, "call center managers tend to be very conservative. They are reluctant to listen to the CIO who comes in with changes." Now, as head of the telecommunications department, Patterson has been able to win acceptance of routine information systems changes and updates more easily.
Once and Done
At Metropolitan Life Insurance Co. in New York, call centers are creating concerns for CIOs that go beyond the bottom line. Starting in 1996 and continuing through 1998, MetLife will be investing 20 percent to 25 percent of annual call center operations costs to fuel the reengineering of its centers.
CIO Logan was asked to help build MetLife's desired image through a call center campaign called Once and Done. Started in the second quarter of 1996, this campaign signaled the company's dedication to getting things done right the first time without having to transfer calls or call customers back. Logan says it makes sense to focus on call centers when building a corporate image because they are becoming one of the primary customer contact points.
Logan's instincts are correct, says David Cooperstein, an industry analyst in telecom strategies with Forrester Research Inc. in Cambridge, Mass. (see "Click Here to Speak to an Agent"). " The CIO has to ask a question that marketing vice presidents are more accustomed to posing: 'What do we want to look like to the customer?'" Cooperstein says that whoever responds to a customer call or online query becomes the vehicle of the company's reputation. To project the image of a capable, organized company, the first voice a customer hears on a telephone must be able to answer any question without delay. IS marries technology to company customer strategy.
To a large extent, in any business, product price and quality can be readily duplicated, says Stan St. John, vice president of MetLife's call-center operations. Therefore, customer service will increasingly differentiate competitors. Industry research indicates it pays to split hairs when it comes to customer satisfaction, he says. "There is a significant difference between very satisfied and satisfied customers," he adds. The difference can be measured in seconds. Callers to MetLife's customer service unit want to be connected with a person in about 15 seconds-that's two or three rings. Customer service surveys shouw that about 75 percent of "very satisfied" consumers return to buy again, he says, but less than half of the customers describing themselves as "satisfied"customers are likely to come back. Quick responses to phone calls and rapid, accurate service once connected are critical components in boosting customer satisfaction, says St. John.
MetLife has given its call-center operations a specific mandate: The company's 1,250 call center operators should be able to handle about 90 percent of their customers in one phone call without a single transfer. But the necessary information might reside on any number of mainframes and other computers in various MetLife business units. To achieve the goal, therefore, Logan's team must integrate all databases and computer functions related to customer accounts to give operators almost instantaneous access to all MetLife information that relates to every customer. More than 1 million calls come into MetLife's call centers each month, according to Logan.
On the technology side, the Once and Done campaign demanded new telephone switches-in this case, Lucent Technologies Corp.'s G3r with expert-agent capabilities. The new switches shorten customer wait times by distributing incoming calls evenly within individual call centers and among MetLife's four call centers in Warwick, R.I.; Utica, N.Y.; Dayton, Ohio; and Tulsa, Okla.
On the staffing side, operators have to rapidly ascertain each caller's needs and then navigate their computer screens to find up-to-the-minute information. Computer networks shunt massive amounts of data across large, heterogeneous systems. Through it all, the operator has to speak with an audible smile.
Any failure in the complex of interdependency between staff and system stalls customer service, and that is becoming as horrible a situation as any mechanical snafu on the production line. But even the correct use of technology can throw call centers into a tizzy when unforeseen glitches occur. "If there's a weak link in this chain, the call center will find it," Logan says. To ensure smooth operations, Logan decided to give all development duties for call center systems to Vice President of Enterprise Applications Development Paul Fusco. Fusco has a team of fellow developers working behind the scenes to "make connections to 10 or 20 different information systems," Logan says. They work directly with their counterparts in the other departments rather than having to go up and down the corporate hierarchy to make changes that aid call-center operators. "[Working directly with counterparts] is relatively new for us," Logan says.
Another consequence of the reorganization of call centers at MetLife is the Call Center Workstation (CCW), a two-year-old ongoing project started in early 1996. The CCW is a PC loaded with applications developed by MetLife's IS department. The software makes the user interface easier to navigate and gives call center operators quick access to customer information no matter where that information is stored.
Logan says the CCW project members chose to use object-oriented application development (OOAD) for the CCW rather than traditional client-server software technology because of OOAD's inherent reusability. Object-oriented programming is attractive to CIOs focused on improving call-center performance for this reason. The centers are expected to be the proving ground for new technologies and business strategies for a long time to come. Plugging in software objects can save considerable time and effort compared with rewriting software every time a new technological direction is announced, Logan says. Though MetLife is carefully evaluating the project's success, Logan declines to say how the company will benchmark the CCW's success.
Internal Customers
In 1994, IS executives at Cupertino, Calif.-based Apple Computer Inc. realized they, too, had a customer satisfaction problem. But in this case, internal customers were less than "very satisfied." IS managers saw growing friction among IS personnel and employees in other departments-including Apple's vital call center operations. There was no single incident, just the perception that IS could better help its internal customers if its personnel understood the world each business unit inhabits, says Niall O'Connor, Apple's CIO. The ideal would be everyone working together as equal partners, he says. Instead, too often, IS was perceived as an outsider, ignorant of what each department needed in terms of technology deployment. "We found we had technically very bright people [in IS], but they didn't know the business end of things very well," says O'Connor.
Apple addressed the friction between IS and its internal customers by infiltrating other business units. IS was decentralized to reduce the friction, and a number of IS specialists were assigned to each business unit. For example, 15 specialists devote their time to Apple Assist, the unit that manages the company's outsourced call center operations.
The specialists do the day-to-day computer support of the call centers from inside Apple Assist. IS professionals assigned to Apple Assist now understand the unit's needs because they are there daily rather than only when a new project has been started or troubles arise. "We have [IS] people who know the business unit as well as those in it-sometimes better than some of the people in that unit," he says. "The IS management team had some previous experience where this business-partnering model worked very well," says O'Connor. "To improve customer service and be more proactive, we moved to this model."
Through Apple's teaming model, IS was able to speed up major technology changeovers for its call center operations. The computer maker switched from Apple Assist's VAX-based information systems, which could not keep pace with call-volume growth, to a new AIX-based system in about a year. "That was aggressive, but we had a pretty good conception of how this business works," says O'Connor. Wholesale hardware changes often take longer than that. But armed with its insider's understanding of Apple Assist operations, IS was able to avoid costly and unforeseen missteps.
To Outsource or Not to Outsource
The classic corporate contrarians, executives at Apple feel its call center information systems are a strategic strength, not the operators themselves. On the other hand, Jim Logan at MetLife and executives at other companies feel they need absolute control over who is saying what to customers. O'Connor says it is more important for him to control the proprietary systems that make telecom contractors more effective and consistent in servicing Apple customers. Other than Vantive Support, call-tracking software from The Vantive Corp., all of the IS equipment and software used in the call tracking area is created by Apple.
It is also less costly to outsource the call center, he says, considering the exaggerated peaks and valleys of call volumes. Too few people fielding calls causes overtime costs and burnout. Too many people in a call center means having to pay people to sit idle.
HFS is carving a middle path in the "to outsource or not to outsource" debate. Patterson spent much of the beginning of this year negotiating a time-share of sorts with a catalog retailer he declined to name. The high season for car rentals and hotel stays is summer, just when catalog sellers hit their doldrums. The idea is to outsource some of the peak volume to the catalog company. He says a decision should be announced this fall.
Ultimately, MetLife's Logan remains unconvinced that outsourcing is appropriate for a function as critical as customer service. "All kinds of moments of truth happen in those contacts," he says. That could be a chief operating officer talking. Most call centers, in fact, are still almost the exclusive responsibility of COOs.
But that is changing as CIOs continue to see their careers evolve and their impact on their companies widen. Executive Row may never be the same.
Jim Nash, an assistant editor at The Chicago Tribune and a freelance technology writer can be reached at jimeditor@aol.com.
Bringing Back Pizzazz
The creativity of information executives is expanding the call center envelope
Metropolitan Life Insurance Co. CIO Jim Logan describes a U-curve of excitement: "In the '70s, technology was still automating business processes. We in IT were the magicians who would swoop down and automate. As time went on, things got so ho-hum. IT lost its pizzazz. What we did wasn't arcane and mysterious; it was just something that needed to be done. Now it's coming back up that U. It's easy to get excited about [information systems] again."
Logan is excited about helping Stan St. John, MetLife's vice president of call center operations, in experimenting with a concept called the Super Associate, a project exploring how many products one MetLife call center associate can handle. Right now, customer service associates become experts in a single insurance product, but St. John wonders if an associate could support more than one by using a hyperintuitive interface, sophisticated phone switches and lightning-quick access to databases. "I have no vision that any one associate can handle 10," he says, but he's looking for ways to leverage the staff he has as they field an increasing tide of calls. That tide has reached 15 million calls a year. St. John says he has no idea how many products associates can carry, but any increase over one product for one associate is a gain in productivity.
Meanwhile, Joe Pizzi, vice president of commercial insurance services at Wausau Insurance Cos. in Wausau, Wis., is excited about his vision for merging call centers with HR management. Pizzi wants to entice clients that carry worker disability policies to outsource the management of calls from sick employees. Rather than calling in sick to their bosses, employees would call a Wausau call center via a toll-free number. Employees would get a voice-response unit, which Pizzi says is no more impersonal than getting the boss's voice mail when calling in sick at 7:30 a.m. Wausau's computer systems would note the illness, presenting detailed illness reports on individuals or whole companies. Clients could also choose to have voice or electronic notification sent to supervisors and the human resources department. Supervisors would not have to handle the absentee recordkeeping tasks under the proposed service, which is expected to go live Jan. 1, 1998.
"We are not selling the judge and jury," when it comes to faking illnesses, he says, unless the client wants that, in which case Wausau could accommodate the request. As of last summer, MetLife was lining up customers.
-J. Nash
Web Calls
The marketing department wanted a Web presence and needed IS to deliver a cool site. Now, CIOs are debating the role of the Web in call centers.
Continental Airlines is looking at teleWeb service (see "Click Here to Speak to an Agent"), according to Jeff Ulrich, manager of Continental's OnePass call center. "I think [teleWeb service] would be wonderful. It would be another avenue for customers to contact us," says Ulrich, who started in Continental's telemarketing department as a caller 10 years ago. He readily admits, however, that he's not sure what application would make teleWeb service useful. "If they can overcome the speed issue, then maybe we can find a good use for it."
HFS Inc. is testing a teleWeb concept along with AT&T Corp., says Doug Patterson, executive vice president of telecommunications and call center operations at the travel-company franchiser. But he has some doubt about its usefulness. "I think the Web sites need to be designed so that you don't have to press a button to get assistance," says Patterson. "You're using up two resources right there."
"That sounds like a systems analyst talking," jokes Jim Logan, CIO of Metropolitan Life Insurance Co. "A marketing person would say, 'Wow, they want more information after looking at the Web site? Strike up the band!'" Logan adds: "I'd take [teleWeb] one step further: When it's supportable, I want video."
- J. Nash
Where to Buy It
A list of vendors of services and products for call centers
Lucent Technologies Corp.
Murray Hill, N.J.
800 325-7466
( http://www.lucent.com)
Definity Enterprise Communications Server G3r Advanced PBX switch
Nuance Communications
Menlo Park, Calif.
415 462-8200
( http://www.nuancecom.com)
Nuance6 speech-recognition software is capable of understanding natural language.
Rockwell Telecommunications Inc.
Electronic Commerce Division
Wood Dale, Ill.
800 416-8199
( http://www.ecd.rockwell.com)
The Spectrum Integrated Call Center System automates call distribution and response. It also integrates data and voice and manages up to 36,000 calls per hour.
Siemens Business
Communication Systems
Santa Clara, Calif.
800 765-6123
( )
/" target=_blankhttp://www.siemens.comhttp://www.siebel.com)
Siebel Enterprise Applications for Call Centers software suite enables sales and customer service departments to share data.
Teloquent Communications Corp.
Billerica, Mass.
800 468-6434
( http://www.teloquent.com)
The Web Call Center Software suite integrates Teloquent PhoneServer and a Web server to synchronize a phone call from a customer browsing a Web site with a call center agent so the agent and the caller see the same Web page.
The Vantive Corp.
Santa Clara, Calif.
800-VANTIVE or 408 982-5700
( http://www.vantive.com)
Vantive Support client/server software for managing customer profiles, complaint tracking and problem resolution; it also integrates computer and telephone data.
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