I started exploring some issues around service levels in my last post, particularly the impact of multi-channel communications. My view is that a telco-centric approach is not just outdated, but will inevitably yield misleading service level results. However, service level remains an important top line metric, but I will continue here to explain its limitations, especially in the context of IP networks and hosted contact centers.

Prior to these developments, every contact center had its own switch and had control over the flow of calls coming and going their way. As a result, the service level was pretty much within their control, meaning that the performance of each center could be monitored by management using a common metric. This in turn meant that management could hold the contact center supervisor accountable for hitting targets upon which incentives and bonuses were based.

If there’s one thing we know about IP and the cloud, it’s disruption, and that’s exactly what’s happening to this time-tested model. New technologies cut both ways in terms of benefits and compromises, and the contact center is no exception. The hosted model offers many economic advantages and is a great solution for companies needing 24/7, global operations to serve their customers. Few companies would argue with that but some things do change.

One of these is the shift away from costly, premise-based infrastructure to a centralized model where one data network aggregates and distributes all the traffic. Operationally, this is a more efficient approach and by utilizing intelligent routing, calls can be answered faster, and larger volumes can be handled without adding cost. The trade-off is that calls will not always be handled by agents in the closest geographic proximity to the caller. Legacy switches are very good at routing calls within their domain but cannot extend that to other locations and if they’re under-staffed call times will lengthen since they cannot be routed elsewhere where agents may be idle.

So, what does this have to do with service level? From management’s view, a centralized, network-based model takes away their ability to hold each contact center accountable for hitting their service levels. Now, calls come into the contact center from any number of sources which adds a lot of new variability into managing service level performance. Stepping back, there is definitely a strategic benefit to the hosted model by enabling virtual queuing which has been discussed in earlier columns. In short, this allows contact centers to either handle more calls without adding staff or maintaining current call loads with slightly fewer agents. The efficiencies that come from centralizing call flows from the network can translate into incremental staff reductions but these savings can be significant if managed properly.

However, to get these results, management needs to think differently about service level. While hosted means they lose the ability to manage site-specific call flows, the underlying drivers that define service level do not change. In other words, service level is a composite metric – it has no meaning in an absolute sense. Service level is defined by discrete, tangible performance attributes that are fully within the control of the manager or supervisor. In particular, these attributes include staffing levels, schedule adherence, WFM forecasts and AHT. Each of these is within the manager’s domain to control. If he/she manages all of these effectively, the service level will shine – regardless as to where the calls are being routed from.

The key point here is that management can have the best of both worlds if they update their thinking about service level. Centralizing call flows into a virtual queue has undeniable benefits, but that doesn’t mean management has to compromise their ability to monitor site-specific performance. Service level is still valid, but should now be viewed as a baseline metric rather than an absolute performance indicator. In other words, if a contact center operation is reasonably hitting their service levels, then continue with business as usual.

However, if service levels are notably off, this may – or may not - be the result of ineffective site-level management. With or without hosted networks, contact center managers are still in control of the attributes cited earlier. If they do a good job with those metrics, service levels will be good too. As such, management needs to take a diagnostic approach there to determine the root cause of poor service levels. If those metrics are weak, then management can take issue with the supervisor – but if not, the root cause is likely in the network, which calls for a different course of remedial action.

Based on my research, I’d say there’s no reason why companies can’t get both sets of benefits here.  Hosted contact centers open up all kinds of new possibilities to make businesses more competitive, but clearly management needs to know what metrics to focus on, and the right tools to measure them. By focusing on the underlying attributes the define service levels, management doesn’t have to concede anything here. On the other hand, if management continues to put their stock in the catch-all service level metric, they run the real risk of unfairly penalizing contact center supervisors, which could easily offset any gains that come from the hosted model.

I’m painting a broad landscape here, but hopefully you can see the interdependencies, and how powerful the total package can be if hosted is done right. With the right thinking, the right metrics and the right analytical tools, I have no doubt this is the best path forward, but only if management is in on all of these things.