IT Call Center Lean Six Sigma Case Study Discussion A Six Sigma case study – tutorial for IT call center – From the standpoint of the improve phase in lean

IT Call Center Lean Six Sigma Case Study Discussion A Six Sigma case study – tutorial for IT call center – From the standpoint of the improve phase in lean six sigma, what might be other solutions to consider besides staffing, web service percentage and callbacks? And what would be the best tool to estimate revenue? 9/13/2010
A Six Sigma Case Study-Tutorial for IT Ca…
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A Six Sigma
Case StudyTutorial for IT Call Center – Part 1
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A combination “case study and tutorial” illustrates Six Sigma use
in an IT call center. It tracks a DMAIC project from inception
through its five phases. The goal is to make a company more
competitive and profitable.
By Gary A. Gack and David L. Hallowell
IT services is a competitive field populated with companies that all
deliver important online and call center support to a variety of
customers. Most IT services businesses come to realize that their
clients have choices and, within the same pricing range, they
gravitate to the support organization where the service is best.
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In this case study of an IT services business, benchmarking
First-call Resolution
helped quantify what the business already knew – its competitive
position was not totally secure. There are a number of ways the
company might have responded to the challenge. While the company had built up a reasonable capability
in Six Sigma, its management realized improvement was not as simple as forming a project team and
turning them loose on the problem. Senior managers had learned that an important part of their
responsibility as leaders is to find the issues that are well-enough defined and of a scope to be suitable
for a Six Sigma DMAIC project team to take on.
After working through the benchmarks and other data and with the help of a Black Belt, they were able to
distill enough clues and evidence in the top-level industry figures to select a DMAIC project they could
sponsor with facts and supporting data.
Customer Satisfaction and Business Growth
Industry data was purchased from a clearinghouse that gathers a number of measures about customer
satisfaction and call center technical and business performance. Comparing their company to the
benchmark average and to a select best-in-class group, the company’s management team could see that
customer satisfaction with their support services (gathered by an unbiased industry source) was just
average or a bit below.
Figure 1: Customer Satisfaction for the Company, 2001-2003
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Figure 2: Customer Satisfaction for Average Companies, 2001-2003
Figure 3: Customer Satisfaction for Best-in-Class Companies, 2001-2003
comparison of the company’s customer satisfaction ratings (73 percent on a 100 percent standardized
score), with the “average” companies in the same sector (76 percent) and “best-in-class” competitors (87
percent) showed management it had work to do.
The evidence also supported the important business contention that customer satisfaction (CSat) can be
a driver of new account growth. Figure 4 illustrates that the range of customer satisfaction ratings for bestin-class competitors tracked with about 75 percent of the changes in new account growth. That was
evidenced by the R-sq. value in the linear regression that was plotted. Senior managers knew that the
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relationship didn’t “prove causality” but, together with their business sense, they saw this as an indicator
that customer satisfaction shows up on the bottom line.
Figure 4: Relationship of Customer Satisfaction Ratings and New Account Growth in Best-in-Class
Companies
Support Costs Per Call, Per Client
The benchmark data indicated customer satisfaction and business growth do not have a direct
relationship to support costs per call. So the companies with the best customer satisfaction and best
business growth do not spend the most on support costs per call. In fact, the support costs of $26 per
call for the best companies and $30 for the average are lower than the case study company’s cost per call
of about $36 (Figure 5).
A model was built to check the feasibility of focusing a DMAIC project on call center service measures
(Figure 6). In the figure, the Y, or NewAcct, is new account growth during the benchmark period (as a
percent of sales). The Xs are: Transfer = Average number of transfers (to different agents and help
systems) during a service call. Wait Time = Average wait time during a service call.Service = Average
service time during the call (the time spent getting the answer to the question, problem solving advice,
etc.).
Obviously the company would like to have seen a better model-fit than the 62 percent R-Sq seen
here. Realizing, though, that many factors play into account growth, the senior leadership felt that the
model showed enough linkage to the process factors that pursuit of the project was feasible. Since the
company’s senior managers had ready access to wait time benchmark data, they checked their
company’s performance against the industry (Figures 7, 8 and 9).
The wait time review indicated that, indeed, the company was behind the industry norms. This, and the
model indication that wait time could be an influential factor in customer satisfaction and new account
growth (Figure 5), helped the senior managers see that a DMAIC team focused on improvement in this
area could be worthwhile.
Figure 5: Support Costs Per Call
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Figure 6: Model Characterizing the Influence of Call Center
Figure 7: Call Wait Times for the Company (Median 4.5)
Figure 8: Call Wait Times for Average Companies (Median 4.0)
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Figure 9: Call Wait Times for Best-in-Class Companies (Median 1.6)
The company could see a strong indication that a DMAIC project to reduce support costs should be quite
doable – and should return significant dollars to the bottom line. Management also could see that the
DMAIC team should look for the improved customer experience connected with reduced wait times and
service times to improve new account growth – bringing dollars to the top line.
The company assigned a Champion from its leadership team to take responsibility for the new project and
identify a team leader and key team members. The team was given its top level goals and scope – to
reduce support costs while improving new account growth. The work with the benchmark data was helpful
in orienting the team to the project rationale. The team began working on their project charter.
The Define Phase
The senior leadership of the IT services company completed the important pre-project work and found an
area of the business worthy of attention by a DMAIC project team. The team then began work on
understanding and articulating the project goals, scope and business case.
The DMAIC roadmap called for work in these areas during the Define phase:
D1. Project Charter: Spelling out the project’s goal statement.
D2. Customer Requirements: Identifying all the internal and external customers who depend on the
outputs of the process under study, the deliverables and measures connected with those outputs, and the
process steps, process inputs and (as appropriate) the suppliers of those inputs.
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D3. High Level Process Map: Showing the flow of information, materials and resources, from key
process inputs, through process steps and decision points, to create the process outputs. The map
describes the flow of what happens within the scope of the target process and it defines the boundaries of
that scope.
D1. Project Charter
Here are some of the key elements of the project charter.
Problem Statement: “Competitors are growing their levels of satisfaction with support customers, and
they are growing their businesses while reducing support costs per call. Our support costs per call have
been level or rising over the past 18 months, and our customer satisfaction ratings are at or below
average. Unless we stop – or better, reverse this trend – we are likely to see compounded business
erosion over the next 18 months.”
Business Case: “Increasing our new business growth from 1 percent to 4 percent (or better) would
increase our gross revenues by about $3 million. If we can do this without increasing our support costs
per call, we should be able to realize a net gain of at least $2 million.”
Goal Statement: “Increase the call center’s industry-measured customer satisfaction rating from its
current level (90th percentile = 75 percent) to the target level (90th percentile = 85 percent) by end of the
fourth quarter without increasing support costs.”
The project team also developed its initial set of milestones, tasks, responsibilities, schedule and
communication plan. After reviewing the charter with their Champion, team members began work on the
next step – customer requirements.
D2. Customer Requirements
For many processes there are one or more customers who are obvious – the people who pay for products
or services or those who visibly depend on the company, like employees. Often, though, there are internal
and external customers and dependencies that are not so obvious. A SIPOC table (Suppliers, Inputs,
Process, Outputs and Customers) develops a detailed view of all the important customers, their
requirements, and the related process step and supplier dependencies.
SIPOC Table: The team developed a SIPOC table to help identify and report what it learned about key
customers and their requirements. While processes flow in the SIPOC direction, the thought process
used to build the table often begins with the customer, suggesting display in the COPIS (Customer,
Output, Process Inputs and Suppliers) direction as shown in Figure 1.
Figure 1: SIPOC / COPIS Table
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Voice-of-Customer (VOC) Interviews: The SIPOC table highlighted some areas where more information
about the process – as understood by customers and call center staff – would be helpful. Representative
samples of the company’s customers were involved in group interviews. The following are excerpts from
individual customer responses and are representative of the data gathered. The answers are to the
question: “What influences your level of satisfaction with our services?”
Group 1
A1. “Well, first and foremost I want the correct answer to my questions or issues. It makes me nuts when
I’m told something that turns out later to be wrong or only part of the story.”
A2. “I really like it when the person who answers the phone has a good attitude. Sometimes you can just
tell they wish you’d just go away and stop bothering them with stupid questions.”
A3. “Well I can sure tell you what I don’t like. That voice response thing where they ask you to make 46
choices (and none match what you want) is a real pain – ends up taking a lot of my time and then they
seem to ignore it all anyway and ask the same questions again. What’s the point? Sometimes I wonder if
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they ever asked a real customer to test these things before they put them in.”
A4. “I’m happy when my call gets answered quickly and the person I talk to knows their stuff and gives
me an answer on the first call. When I have to wait for a call back and talk to someone else, repeating
some of the same stuff – that’s a real drag!”
A5. “I like it when the person on the phone can actually make a decision without putting me on hold while
they get an ok from a supervisor. Seems like they spend 10 minutes to make a $5 decision. That just
doesn’t make sense to me. Seems like some control freak is running the show.”
A6. “Follow-through is what really matters to me. I don’t necessarily expect you’ll always be able to
resolve my issue immediately, but I do expect you’ll call me back in a reasonable amount of time.”
A7. “My hot button is getting someone who has enough patience to really solve my problem. Some of this
stuff seems pretty technical to me, and I don’t always know even the right question to ask. I like it when
the person on the phone cares enough to get to the real solution, even when I can’t explain exactly what I
need.”
A8. “I don’t want to be transferred around. Last time I called I got transferred four times and ended up with
the same person I started with. I’m too busy to put up with that!”
Group 2
A1. “Our big concern is speed. Our customers demand answers from us, and we in turn rely on you for
some of that. That means you have to be adequately staffed to meet call volume.”
A2. “What we most need from you is people who can answer complicated questions accurately and
quickly – not just the easy stuff, we can do that ourselves.”
A3. “We need you to have immediate access to up-to-date information about all of our accounts and
transactions with all of your branches and locations. It creates huge problems for us when your records
aren’t accurate and timely. We can’t sit on hold for 10 minutes.”
A4. “I call 3 to 4 times a week, and the thing I find most frustrating is the lack of consistency. Sometimes
my call gets answered in 2 minutes, which I can live with, and sometimes it’s 10, which I can’t. I also
notice that there’s a lot of variation in how long it takes to get answers to very similar issues. I call your
competition all the time also, and they’re a lot more consistent.”
Summarizing Customer Requirements: The team began to summarize what it was learning about
what’s important to customers – in the form of requirement statements and measures.
>Requirements
> Measures
> Quickly connect with a helpful person
> Wait Time
> Get the information I need
> Transfers, Service Time
> Apply the information, with help if needed
> Customer Satisfaction, Support Cost
> Understand how to avoid problems recurring > Days to Close
D3. High Level Process Map
The team mapped the process by which an initiating event (an issue encountered by a customer) moves
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into and through the resolution process (Figure 2).
The process map will be helpful during the Measure phase, as the project team considers how and where
to gather data that will shed light on the root cause of the issues most pertinent to the project’s goals.
The Measure Phase
Having developed a good understanding of the project’s business case and customer requirements
(identifying the Y(s)), and the as-is process, the Six Sigma project team of the IT services business
began to focus on the Measure phase. The team identified the measures and data collection plan for
gathering the right amount of the right data to impel their learning about root causes and drivers that
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impact the project Y(s).
The DMAIC roadmap called for work in these areas during the Measure phase:
M1. Refine the Project Y(s): Getting even clearer about how the project’s key outcome measure(s) will
be defined, measured and reported.
M2. Define Performance Standards for the Y(s): Identifying how performance will be measured usually somewhere on the continuum from capability measures like Cp and Cpk for “variables” data that
is normally distributed to percentile or other capability metrics for “attribute” and other data that may be
skewed in distribution.
M3. Identify Segmentation Factors for Data Collection Plan: Starting with the natural segmentation
of project Y(s) and moving though consideration of prospective driving factors (x’s), segmentation
suggests the packets of data that should be collected in order compare and contrast segments to shed
light on Y root causes and drivers.
M4. Apply Measurement Systems Analysis (MSA): In any project, raw data is gathered and then
converted into measures. That process comprises a “measurement system” that should be characterized
and strengthened in terms of its accuracy and repeatability.
M5. Collect the Data: Gathering data, preserving its meaning and noting any departures from the
discipline put in place under MSA.
M6. Describe and Display Variation in Current Performance: Taking an initial look at the data for its
distribution, extreme values and patterns that suggest special variation.
M1. Refine the Project Y(s)
During this step the team conisdered exactly how the project Y(s) would be defined and measured:
Y(s)
Primary
Customer
Satisfaction
Measurement
1. By industry standard monthly survey
2. The project will require additional, more frequent, case-by-case customer satisfaction data. A
measurement system that tracks with the industry survey will be devised and validated.
The staff time connected with each call:
– Call answering and discussion
Secondary
Supprt Cost
(Per Call)
– Case research
– Callback time
will be loaded with a distribution of benefits and infrastructure costs to compute overall support
cost per call.
Related /
Of Interest
Days
Time span from call origination through client indication that the issue is closed to their
to Close
satisfaction .
Wait Time
Automatically tracked for calls in queue. Summed for calls encountering multiple transfers.
Transfers
Automatically tracked for each call moved to another extension.
Serv ice
Time
Automatically tracked for time from staff call pickup until hangup or transfer.
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M2. Define Performance Standards for the Y(s)
For each project Y, the current baseline and best-estimate target was documented. In some cases, the
team found that good baseline data was unavailable. (Unfortunately that is a common occurrence in
DMAIC projects.)
Measure
Current Baseline
Target
Primary
Customer Satisfaction
(Per Collins Industry
Assessment)
90th Percentile / 70-80%
Satisfied
90th Percentile / 85% Satisfied
Secondary
Support Cost Per Call
90th Percentile / $40
90th Percentile / $32
Days to Close
Did Not Have Good Baseline Data
90th Percentile / 3 Days or Less
Wait Time
Did Not Have Good Baseline Data
90th Percentile / 4 Minutes
Transfers
Did Not Have Good Baseline Data
90th Percentile / 2
Service Time
Did Not Have Good Baseline Data
Related /
Of Interest
Mean: < 8 Minutes St.Dev.: < 0.5 Minute s M3. Identify Segmentation Factors for Data Collection Plan The first question was: How is Y naturally segmented? Often Y data is organized by customer type, geographic region, product or service type, etc. Thinking about where the strongest "action" was for the dynamics under study, the team focused its initial data collection effort on the segment(s) that offered the most potential for the team's learning. This helped conserve the limited resources available for data collection and analysis. Instead of "measuring everywhere," the team started with a focused subset of all possible data. The data was naturally segmented by call center - with most of the traffic in one center. Data from that site was used for the initial data collection. The next question was: What factors may be driving the Y(s)? Identifying these factors and gathering data on their behavior may shed light on the root causes and drivers for the Y(s). This is the planning part of the Six Sigma drill-down that is sometimes called "peeling the onion." While the fundamental interest is in the Y behavior, the idea is not to truly solve a problem by trying to "fix the Y." That approach might provide a temporary fix. U... Purchase answer to see full attachment