By René LeBel
In today’s business environment, great expectations are placed on the back of Key Performance Indicator (KPI). Many companies are attempting to justify virtually everything and anything related to business performance through KPIs.
The multitudes of indicators have the tendency to invade our everyday lives – and in many cases have been diverted from their primary role. It is becoming more convenient to cut short all discussion and objections in order to justify decisions by invoking a KPI with a grand name. It is the technocrat’s game and should not be part of the day-to-day business of a real manager.
While some contact centers have avoided the KPI trap, most customer contact centers are not the exception when it comes to adopting the ever-expanding role of KPIs. Some workforce management software suppliers promise to deliver hundreds of KPIs to contact center clients. But where does the information start? Where does the KPI start and where does the manipulation of the KPI stop? Accountants and statisticians have always understood that numbers can be made to say anything. Ultimately, KPIs can be used and interpreted at our convenience.
What are the features that distinguish a real performance indicator from simple information – and accordingly deserve the name “Key Performance Indicator?” Let us look further at these key features.
A KPI must be associated to a specific objective: This concept is fundamental. If a KPI is not associated to a specific objective, it is not a KPI. Period. Furthermore, an objective must be associated to a person or a group of persons; otherwise it is not an objective. Finally, a KPI must be related to the particular objective using it. For example, a customer satisfaction objective is associated to customer KPIs. The objective related to the value of shares is associated to shareholder KPIs; the quality and productivity objective to agent KPIs. If we do not identify where we are going – our objective – it is useless to know at what speed we need to go – the KPI. We may arrive somewhere, but mostly likely, not at our desired destination.
A KPI should lead to a decision: What do you do when a KPI leaves you cold? Even if you look at it, examine it, and admire its presentation – if you cannot use it to make a decision and take action – then the KPI is superfluous. It must be eliminated. Time lost in futile analysis brings neither satisfaction nor results.
The KPI precision could be all relative: Essentially, the KPI must remain a risk reducer. Obviously, a high level of precision in the KPI will be pleasing to the rational and logical left side of our brain. If it is less precise, the creativity of the opposing side of our brain – in conjunction with the intuition of the manager – should lead to an eventual decision. While this holistic approach to problem solving is often very effective, it is important to understand and pinpoint the data being used for the calculations, and how the KPI is calculated to grasp its precision level.
On the basis of these few features, would you agree that hundreds of KPI are required for the effective management of a customer contact center? If you have doubts, then you are on the right track. I suggest that 7 to 10 KPIs linked to objectives are sufficient for a manager to effectively analyze and react to their fluctuating business environment.
Here are a few examples of relevant KPIs for a customer contact center:
- Customer satisfaction level
- Customer service level
- Average speed of answer
- Contact forecast precision level
- Average number of contacts handled per hour
- Quality of services rendered (the only subjective element among indicators)
- Average handling cost of a contact
- Agents occupancy ratio
- Schedule adherence and conformity
- Time distribution (in service, non-service detailed time or “shrinkage”)
In short, “relevant” simplicity, whether it be voluntary or not – will always work best. To be an informed “performanceologist,” you will understand the following. When an objective – the basis of the KPI – is negotiated between the one who contributes to its realization and the manager who defines it – the potential to meet or exceed that objective is greatly increased.
In other words, an objective and its means of measurement are more effectively met when mutually accepted. Agents are always proud to achieve objectives, which they understand and contribute to and, as a consequence, provide better service. After all, the main objective is to serve the customer best.
René LeBel is Vice President of International Business Development of Calabrio Inc, a provider of call center workforce management and performance software. He can be reached at email@example.com.
[From the February/March 2008 issue of AnswerStat magazine]