Independent Contact Center Consultants: Bridging Strategy, Technology and Operations Since 2004

7 Findings from a Contact Center Cost Structure Analysis

A few years ago, my colleague and I decided to model contact center costs for three representative centers – small, medium, and large – using a process-based analysis approach and comprehensive modeling tool. We varied key elements that can change a center’s makeup – such as self-service technology – and examined the impact it had on the cost distribution. Our goal was to drive out clear, consistent cost breakdown numbers, as well as cost per contact.

We identified 7 key findings that should inform your ongoing cost savings initiatives:

  1. contact center cost structureFocusing on front-line labor productivity is the right thing to do; it is 90% of the contact center labor budget, and two-thirds to three-fourths of the overall operating budget.
  2. Technology costs are a relatively small slice of the pie (2.6-5.9%). Investing in technology to make the workforce more efficient can have a profound and lasting impact.
  3. While it’s tempting to cut analyst positions for the sake of meeting short-term budgets, it compromises your ability to realize front-line labor savings made possible by technology.
  4. Centers considering virtualization – i.e., taking several small or medium centers and organizing them as one virtual center – can realize a 20-50% reduction in cost per contact.
  5. When evaluating hosted solutions and/or outsourcing, be sure to assess total costs, not just front-line labor. Consider the impact on all areas of the organization, such as fixed labor, telecommunications, technology, training, and quality assurance. That is the only way to look at the true impact on cost per contact.
  6. Look at your cost-per-contact to assess savings potential. Improving self service and decreasing labor costs have a nearly direct impact on overall cost per contact.
  7. As you institute labor-savings initiatives, be mindful of the fact that strategic decisions, changes, and investments have to be given time to make their impact.