This article previously appeared on the Society for Workforce Planning Professionals online journal, "On Target." They appear here with the gracious permission of SWPP and Vicky Herrell.

The following is personally a little depressing:  I am an expert on other people’s contact center planning spreadsheets.  Now I’m not the expert- Jen Dziekan (nee Newhard) at Bay Bridge Decision Technologies has me beat by a mile- but I am, nonetheless, an expert. Unfortunately, this expertise is not even remotely cool. It will never get me an entourage, or longing glances, or even mediocre tickets to sporting events.  But it will allow me to say this with 99.9% certainty: I can look at a contact center planning spreadsheet and find, pretty quickly, ways to save your company oodles of cash. You’d think that that would earn me something cool, right? Well, it really doesn’t.

The contact center planning problem, i.e., developing long term forecasts, requirements, hiring plans, shrinkage plans, extra time plans, under time plans, and budgets, is a very complex and difficult endeavor.  In spite of the difficulties, if your long-term plan is developed and managed well, and if it is efficient and accurate, our experience is that it will absolutely save your company money, and it will lead to a much smoother operation.

The technology available to most companies to manage this process- an Excel spreadsheet- is most often inadequate for the task. The limitations of Excel require analysts to take shortcuts in order to mechanically put together their plans; the complex contact center environment has outgrown the spreadsheet technology, as spreadsheets cannot accurately model multi-skill, multi-channel contact centers.  The shortcuts that planners often take with their spreadsheets can be costly to the business.

So, given the non-utility of my particular expertise to me personally, I’ll share some tips that can save your company a lot of money.  And you won’t even have to take me to a Bowie Baysox game or anything. 

One: Flat-lining shrinkage is always a bad assumption

One of the easiest things to spot in a planning spreadsheet is a flat shrinkage assumption.  If shrinkage is flat across all weeks of the planning spreadsheet, it means that the business expects no variation; shrinkage is assumed to be the same every week, be it mid-February or mid-July. We know this is simply not true.  For instance, people call in sick in very predictable seasonal patterns.

Shrinkage is very important to get right- our experience has shown us that the shrinkage forecast is as important to correct staffing as are volume forecasts. If I miss my shrinkage assumption for one week, it will mean I am understaffed or overstaffed, and it will cost us either in poor customer service, overtime dollars, or idle time.  

To demonstrate this, let me ask you a silly question: Would you ever “flat line” your contact volume assumption?  Of course you wouldn’t, yet seasonal variation in shrinkage is as much as ten percent of the workforce, and many of us still make the assumption it is flat.

Examine the following graph.  In this graph we are plotting actual center shrinkage against a “flat line” assumption.  It is easy to see that this assumption will cause your spreadsheet to miss plan.

Simply tracking the seasonality of each shrinkage item (e.g. by center and staff group) and forecasting these shrinkage items using the tools you currently use to determine volume forecasts is a good way to get started.  One company that we work with saved 4% in agent time, and ran a smoother operation in the process, simply by developing realistic planned shrinkage forecasts.

Two: Manual hiring/OT/UT plans are too hard to do right

This tip is near and dear to my heart because I have a painful experience associated with developing hiring plans.  Years ago, I was working at a large credit card company and was asked by our exec to do several what-ifs under different volume and handle time assumptions.

Our planning process at the time was spreadsheet-based, and our hiring plan, like most spreadsheet-based tools, involved many manual processes.  In effect, we developed a weekly staffing requirement, and had to manually determine where and when to hire agents.  We had seven centers, and many staff types per center.

When you think about it, this is a very complex task.  We must consider- by each center and each staff type- learning curves, attrition, sick time, handle times, volumes, training plans, and much more.  Determining the best hiring plan, the best overtime plan, and the best controllable shrinkage plan is very difficult to do by hand looking at over/under charts (which by themselves are not analytically stellar).

Boy, did I mess up this analysis.  It took a fair amount of time- maybe a week to walk through all of the staff plans, and my results were somewhat counterintuitive.  In a nutshell, I had lower costs for a scenario that had more calls, which we all know is wrong. As an analyst, there is nothing much worse than having to tell the big boss that you need more time because your numbers are wrong (what is worse, is bringing an analysis to a meeting and having the boss show you that your numbers are wrong!).

Manual processes are prone to manual mistakes.  Worse yet, processes that are highly complex and mathematically combinatoric (like scheduling agents or determining hiring plans) are difficult to do well by hand. You will always do better by developing an automatic hiring algorithm to work through all the combinations of possible plans.

This, by the way, will save your company a lot of money.

Three:  Treating all centers as though they are the same is dangerous

One thing we contact center managers know is that all centers are not the same. While they are all similar, they each have their own behaviors and seasonality.  A buddy of mine told me a great and simple example about how his company made a major mistake by moving agents and workload from one expensive center to a cheaper one by measuring cost per agent.

The company failed to take into consideration that the expensive center was much more efficient than the cheap center.  This move almost doubled their cost per sale.

The lesson here is that there are all sorts of differences - when people call in sick, or their handle times, or their ability to sell, etc… - across geographic centers that must be incorporated into your staff plan.

Four:  Stretch goals are evil

One easy mistake to spot, but much harder to cure, is the planner’s bane; the stretch goal. 

The budget plan is, by its nature, a political document.  Many managers have their hands in the assumptions and forecasts that go into the plans, but few have much responsibility for these same assumptions.

A common stretch goal scenario goes something like this: 

1.      The planners produce a series of forecasts, including many of the major cost drivers (AHT, volumes, shrinkage, sales per call, customer satisfaction, etc...). 

2.      At the same time, all the managers are vying to get their pet projects into the budget for the next year.  As part of that process, projects are ranked by measure of benefit to the operation.

3.      The projects selected for funding are paid for by the improvement in one of those cost drivers, and those cost drivers in the strategic plan are altered by the amount promised by the manager.

4.      The benefits are not realized:

a.      The project timeline is extended past what is assumed in the budget.

b.      The benefits were not really there or were less than expected.

c.       The benefits may become apparent, but only much later.

d.      The project crashed and burned.

5.      Forecasters are blamed when the plan gets out of whack (note, the project sponsoring manager usually is held blameless).

6.      Depending on the benefit (e.g. AHT reduction) envisioned, the center network may be under serious staffing pressure.  Service levels are erratic.

I’d offer this advice:  Don’t plan for the benefits until they are actually being realized.

Five: Always hitting your service goals may not be optimal

This one may sound counter-intuitive.  Of course we want to hit our service goals!

However, unless you are contractually obligated to maintain a service standard, following a service standard blindly is bound to weigh your organization down with too much cost.

As analysts, one of the simplest and most valuable exercises we can perform for our senior management is a cost versus service trade-off.  Almost every decision we make has, at its core, a service and a cost repercussion.   It is best for the company that we often draw out this trade-off.

Given our contact center’s seasonality, our cost structure changes as our economies of scale change and as the levers we have to pull in order to reduce costs change.  For instance, it is much more expensive- per call- to hire to our seasonal peak than it is to hire at other times of the year.

Many years ago, I was working for an airline who wanted to know how many people to hire, given that there was planned a major fare sale.  If I drew a graph of staff versus service, my answer would be simple: a lot. 

However, given that the sale was so deep that our customers would be willing to wait longer to receive such a great deal, the problem became much more interesting.  If we looked at cost versus service, we certainly would not hire so many agents that their additional cost was more than their benefit in marginal sales to the company.  Instead, the real answer was to hire only that number of agents that paid for themselves.  In short, the optimal solution was to miss the standard service level, and to hire much fewer than “a lot”.

Six:  Presenting one plan is a disservice

A concept that we all can buy into is this: more analyses is always better.  Given the variable nature of planning, it is always better to do several analyses up front in order to try to capture the risk associated with each one of our planning assumptions.

For example, given all of the business variability over the last few years, it makes more sense to run the following simple scenarios:

1.       What is the staff plan associated with the current most expected forecast?

2.       What is the risk associated with this plan (meaning what service will we see, and what costs will we incur?) if:

a.       Calls come in higher than we thought?

b.       Calls come in lower than we thought?

These several plans are much more beneficial to senior management- and may lead to a different resource decision- than the linear “one plan” approach.

But, to be honest, because we are using time consuming and error prone spreadsheets to develop plans, we often don’t have time to develop these cost saving risk analyses. This is a reason to either automate your planning process or to purchase a strategic planning system.  You need this process to be quick enough to allow for quick and accurate analyses.

Seven:  Weekly versus monthly plans:  weekly wins

Many plans, usually those generated by finance, are developed with the finest level of hiring, volume, and shrinkage detail as monthly.  But we all know that these decisions are best developed knowing the intra-month patterns.

Blending an average month together will lead to shortages some weeks and overages other weeks, simply because of the assumption in our spreadsheets.

What is the best compromise, if finance likes to see their plans reflecting monthly costs? It is to develop weekly capacity plans, and roll them up (with detail on subsequent sheets) so finance gets your plan in the form they like, but your operational plan includes the detail that the operation needs.

Eight: Long term questions deserve long term analyses

Every so often, we see a spreadsheet process that only determines staff plans for ninety days or so.  While real-world activities, like outsourcer locks, mean that these timeframes are important, they do not preclude the importance of using long term analyses for long term business problems.

What I mean by this is, many of the decisions our operations make are long term decisions.  For example, hiring is not a short term decision, or even a ninety day decision.  Because of this, we need to understand the implications of our hiring decisions with a seasonal view.

Coming into a seasonal peak is a lousy time to look at hiring a few months out.  We might decide to hire to the peak, even if the peak is short-lived and a valley immediately follows. However, it may be optimal for the business to either 1) miss service levels at peak (see number five, above) or to 2) use overtime to staff to peak staffing requirements.

Nine: No variance analyses, means you don’t know what to do next

This is a hard one.  Many businesses don’t have time to look backwards, and many operations do not provide meaningful variance analyses. But the process of determining changes to the operation or variance in the business environment is critical to running a smooth operation and to avoiding service catastrophes.

While many businesses will have forecast review meetings, usually the point is to reevaluate the forecast (usually only volume forecasts get reviewed), put pressure on the forecast team, and possibly change the plan.  For many other organizations, variance analyses are a luxury, rarely consumed.

The best contact center organizations look at the variance differently. They view variance as a core piece to their planning process and an item that is dutifully performed. These same organizations view variance not as a forecast error, but as a change in their environment. Variance analysis is the canary in the operational coalmine.

Their variance analysis meetings serve a specific set of purposes. They look to 1) determine what is changing in the operation’s  performance drivers, 2) determine if these changes require business decisions, 3) fix variance items that are controllable, and 4) make resource decisions about items that are not controllable.  These variance meetings are management decision-making meetings (and not beat-up-the-forecaster meetings).  They track variance to all of the main center performance drivers, certainly volumes, but also handle times, attrition, sick time, sales per call, etc…

Central to variance analysis is also what-if analysis.  It is not good enough to know that an item (like attrition) is changing; it is also important to know what will happen to the operation if it continues to change, or what the resource cost will be to react to this change if it is determined the change is not temporary.

It is arguable, that this piece of the planning process is the most important, and it is enabled by an automated and optimized planning process.

Ten: Validation breeds confidence

One step we rarely see in planning spreadsheets is a validation step.  Meaning, if you know the number of people available, the handle time achieved, and the number of calls offered last week, it should be an easy exercise to plug those real-world values into the spreadsheet to determine whether the spreadsheet predicts the actual service achieved.  If it does, the model is accurate. If it doesn’t (over a reasonable timeframe), then it is not accurate.

Validating your spreadsheet is not as easy as I make it out, only because most analysts build their spreadsheet to determine agent requirements and not to provide service analysis (given agents staffed).  My suspicion is that most of the methods employed in spreadsheets (usually Erlang, or an assumed occupancy-based workload equation) are not really all that accurate (I’ve tested several and my suspicion always bears this out).

Validation of the model that determines your requirement is very important.  If you know that your method is accurate under different service standards, and this is something you can show your management team, then they will have confidence in your plans, your analyses, and you.

You’ve gotten this far in this article, how about I make you an offer:  Call me up, and I will offer to take a peek at your spreadsheet.  Perhaps together we can find sources of hidden value that you never knew were there.

Ric Kosiba, Ric@RealNumbers.com

410-562-1217