Telecom Management for Call Centers

iUniverse, Inc.

Contents

Introduction...............................................................................1Chapter 1: Cost Management.................................................................3Chapter 2: Traffic Management..............................................................16Chapter 3: Guidelines for Planning a Call-Center Infrastructure............................42Chapter 4: Methodology to Map and Analyze the Traffic in a Call Center.....................59Chapter 5: Planning a Transport Structure..................................................108Chapter 6: Cases...........................................................................121Chapter 7: GSM Gateways....................................................................132Chapter 8: Billing Systems.................................................................136Chapter 9: Billing Auditing................................................................146Chapter 10: Dialers........................................................................151Chapter 11: Calculations...................................................................179Chapter 12: Closing Words..................................................................205Bibliography...............................................................................207

Chapter One

The management of telecom in a call center has as its main goal to guarantee connectivity between the users and the attendance sites with the desired quality of service for the least cost possible. Therefore, cost management is a fundamental part of managing telecom in call centers. Traditionally, there are four main general strategies to keep the telecom cost down:

? Pressure the service providers and hardware vendors, trying to guarantee low prices—for example, bargaining and negotiating hard.

? Enhance the internal control over usage of the services available—for example, by using billing systems.

? Increase the control over the service providers to make sure that the organization is paying only for what was really used at the agreed price for each service and is not being overcharged—for example, by using telephone bills auditing.

? Carefully manage traffic and network design, emphasizing aspects such as standardization and simplification of the technical environments.

Considering that telecom usually represents a significant chunk of the operational cost of a typical call-center operation, the telecom manager has to be cost conscious and has to understand that part of his or her job is to find ways to get more for less from the infrastructure that he or she is responsible for. It is not only matter of making things work but making things work for less.

In summary, it is fundamental to know the actual expenditures of your organization for telecommunications, including telco expenditures, hardware, and services. It is also important to be able to separate the expenditures by identifying not only the services themselves but also things such as penalties for overdue payments, penalties for not achieving minimum-committed traffic, and one-time installation services.

A very common misleading factor when identifying the monthly expenditures of telecom is that very often the telco invoice (bill) encompasses calls from several months (in some countries there is a legal limitation on the time to charge for the calls); therefore, when comparing volumes and costs you should make sure that you separate the calls correctly by time span. In addition, you may also have situations in which the billing cycles of the several providers are not consistent—that means in a given month you may be paying for calls made from different periods. This fact also can generate some distortion when identifying the monthly volume and cost.

Here it is worth mentioning that when verifying the expenditures you should not use as reference the values actually charged but the values that were supposed to be charged. This is necessary because, if you don't, you risk creating the wrong reference for the real expenses. It happens because telcos are well known for their charging mistakes (for and against their clients), and sometimes these mistakes can be very misleading regards having a clear view about how much and on what your organization spends on telecom.

You can generally divide the telecom costs of a call center into three groups:

? Hardware costs

? Personnel costs

? Transport costs

1.1 The hardware costs

The hardware costs encompass all costs associated with the hardware deployed by the call center. Usually, these costs are partially hidden, because some equipment is bought and not rented or leased. This hides the total expenditure and cost of the hardware because part of this cost isn't expended and accounted for monthly.

The telecom manager must keep a careful inventory of the resources used, in which the monthly costs of each device is clearly identified, including the rent/leasing, maintenance, and support costs. When the equipment is owned by the organization, it still has a "cost," which is represented by the total paid (capital invested) or financed monthly by a given rate—usually the WACC (Weighted Average Cost of Capital) of the organization. Knowing exactly how much your hardware costs monthly is very important not only to define your operating baseline properly but also because there is a delicate balance act between investment in hardware and ability to manage traffic.

1.2 The personnel costs

The personnel costs encompass the costs associated with the people directly involved in managing the telecom infrastructure. It includes regular employees, contractors, and expenses for providers of services such as external NOC (Network Operation Center), help desk, network security, and mantainnance.

This cost has to be very well understood, because, as in the cost of the hardware, there is a trade-off between the cost of the control (and the people involved to execute it) and the gains attainable by controlling. The cost of the people may not be an expensive item in some countries; however, it is always important to know it well and to do the math.

1.3 The transport costs

One important aspect of the infrastructure costs, which very often is overlooked, is the transport cost. These costs encompass all the costs involved in transporting the calls between the call center and the user (or vice versa). There are two main reasons these costs very often are not carefully verified:

1) The call-center services very often are outsourced, and in these situations, usually the company contracting the service pays the bills directly, which obscures the visibility of this particular cost item. This situation is common in both inbound and outbound operations.

2) Other very typical situation is when the caller pays for the call (totally or partially). This scenario also tends to obscure the responsibility of the call-center operator in the transport costs.

Although both scenarios are common, keeping track of the transport costs is very important even when you don't actually pay for them directly. Firstly, the transport costs usually amounts to a substantive part of the infrastructure costs (regardless of who foots the bill) and the infrastructure manager usually is the person best able to analyze and optimize this cost.

Therefore, having a clear understanding of your transport costs enables you to act to reduce it.

1.4 Negotiating with service providers

The intensity and frequency of the negotiation processes is the distinct difference between the way telecom is managed in a typical large organization and the way it is in a large call center. Telecom costs in a call center are basic inputs and as such have to be carefully managed.

Therefore, negotiation with service providers is an ongoing process in a large call-center operation. Negotiation skills are assumed to be one of the basic skills of the typical call-center telecom manager.

Even if you have ongoing contracts with a lengthy renewal time, you probably will always have some sort of negotiation going on—new links being added, new tariffs being offered, new clients coming in with their links—which in time will be transferred to you.

Because of this permanent interaction with service providers, telecom managers have to keep track of their organizations' needs very carefully. Therefore, it is absolutely crucial to have a very good, current view of the traffic in terms of volumes, interest, and profile. Spreadsheets like the one shown below have to be updated often and known by heart:

The negotiation processes must take into consideration several key factors that are typically driven by the makeup and culture of the organization. As an example, you must evaluate the flexibility and willingness of the organization to absorb new clients and new functions. Some organizations are willing to sell services and then hurry up to expand their infrastructure to support the new clients/services. Others prefer to sell only if there is capacity available and then expand the infrastructure to keep spare capacity and then sell again.

From the above commentary it is clear that some sort of strategy and policy is required to deal with service providers. The need for strategy grows as the size and geographical dispersion of the organization grows. The strategy and policy should address at least the following points:

? Clear statement of global approach to service providers. Typical examples are:

* One global provider (or one provider by country or region)

* Providers must have local capabilities and infrastructure in areas of operation

* Best use of local providers in their areas of operation

* Local or a universal language capability in regions of the globe

* Finance capabilities, currency requirements, and payment terms

* Provisioning and sales-cycle timeframes

? Clear internal understanding and communication regarding functions per type of device, capacity-planning standards, and QoS requirements

? Position the ideal topology based on flow analysis and geographical realities driven by political, organizational, and other regional influences

? Position at least two transport strategies. This might have to be regionally based.

? Define specific contractual elements up front. These could include:

* Penalties and contract cancellation conditions

* Minimum-committed volumes

* Accounts payable and dispute arrangements

* SLA (Service Level Agreement) components

* Technology refresh options

* Help-desk performance metrics

? CPE (Customer Premises Equipment) ownership and management, these might be dictated by regional regulations

? Standard price lists—this is often desirable in decentralized organizations and has many advantages in the areas of cost appropriation and financial planning. This price averaging is often only possible in regional settings, and even though it might provide a simplified operational structure, it is inevitable that some operational entities will pay a price penalty. That said, the advantages to central planning, financial visibility, and overall simplicity in a large multinational call center are significant.

It is our experience that frequently the people executing the negotiation with the service providers do so without proper preparation. It's is also very common to find people negotiating telco contracts whose view is purely economic without any deep understanding of the traffic volumes, interest, and profile. This lack of preparedness usually generates two very typical approaches:

? "Kick the telco approach"—there is no complication; we quote with all providers and just choose the cheaper ones.

? "Minimalist approach"—there is no need for detailed specification; just ask them for their price list.

These views, although not entirely wrong and may work for a smaller infrastructure, do not take in to consideration a fundamental factor of this process: when negotiating with service providers for a large call center, you are not only comparing the prices per service but also comparing the prices of the different transport strategies (deployment of POPS [Points of Presence] for example) and balancing between the tariffs and the minimum-committed volumes.

Examples:

? Comparing the prices against the cost of building a network of POPs to collect or distribute the traffic; the cost of the spoken minute has to be compared not only against the other service providers' prices but also with the cost to transport them through a private network.

? Mobile traffic: the cost of the spoken-minute fix-mobile cannot be compared only with the fix-trunks' providers but also with the alternative of providing dedicated mobile trunks (or using GSM gateways) to transport mobile traffic.

Therefore, it is crucial to accurately map the traffic, understanding perfectly from where to where the traffic flows, the volumes, the quality requirements, and the available transport strategies.

The fact that we are not just comparing the costs per type of call but also comparing costs per transport strategy is a fundamental point and does make a difference when negotiating with telcos. This is because, besides the possibility of comparing different transport strategies, the only other alternative is the direct comparison between the same services. In this situation each telco usually knows the limits of the others, and the chances for driving down costs are limited (usually associated with the volumes). Therefore there is less room for discounts.

Although large call centers may have several telecom providers, usually they concentrate their business in a few of them (usually between two and three providers are responsible for 80 percent of all telecom expenditures).

It is an important aspect to be considered; we often hear comments like "We don't want to have several providers." The basic fact is that from the point of view of getting better prices it is always convenient to allow all providers to offer their services, even when they are not able to cover all your sites or offer good prices for all services (here the routing capability shows its importance).

Ideally, the logical approach should be: "Provider, quote your best price for the services you offer where you have coverage." Of course, having the ability to route traffic makes all the difference in the effectiveness of this approach.

Here it is important to emphasize that adopting the logic of allowing all potential providers to present their best prices where they have coverage (with no obligation to quote all services for all points of presence) does not necessarily mean contracting in this way. Eventually, you can do a quotation following this strategy, and subsequently, the providers may be short-listed and confronted with the best prices available in each area.

Although common, contracting only one service provider may not be advisable. Having at least two main providers may be better for technical and commercial reasons. First, there is the fact that from a relationship point of view, it is always good to create a situation in which a service provider knows that there is a concurrent active contract to which the organization can easily turn for its requirements.

Another very common argument against segmenting quotations is that such segmentation tends to reduce volumes and consequently tends to reduce the discounts offered. This line of thinking has several problems:

1) The first, and most obvious, is the fact that quoting with several providers doesn't eliminate the possibility of the providers that are able to offer all services in all areas to do so, eventually giving you alternative costs per volume contracted.

2) This line of thinking doesn't take in consideration the already mentioned fact that we have to compare not only service providers and services but also transport strategies; one transport strategy may be applicable only in some areas.

3) And, finally and maybe the more problematic, is the simple fact that we may have potential providers whose prices are very good but limited to some specific geographical area or specific types of services (mobile calls, for example). Depending on the percentage of our services that are these types and within these areas even if we pay a lot more for the other services outside those areas (not covered areas), the savings could still be substantial. In addition, we always can route the calls to avoid using the expensive types of services by redirecting them to providers whose prices are more reasonable.

The quote should be structured in such a way that the service provider must present a defined price that clearly indicates:

? Cost per minute per type of call

? Charging granularity

? Monthly fee for trunk subscription (if any)

? Minimum-committed volume (if any)

? Costs for other services (for example, installation)

? Periodicity and duration of the contract (typically monthly and not above thirty-six months)

Eventually, different minimum-committed volumes imply a different set of tariffs. If this is the case, it has to be clearly stated. The clear indication of all these items enables visibility and transparency when managing and comparing the contract.

(Continues...)

Excerpted from Telecom Management for Call Centersby Luiz Augusto de Carvalho Olavo Alves Jr. Copyright © 2011 by Luiz Augusto de Carvalho and Olavo Alves Jr.. Excerpted by permission of iUniverse, Inc.. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
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