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CHAPTER 9: COST/BENEFIT ANALYSIS, OR RETURN ON INVESTMENT (ROI) FOR CALL CENTER ENHANCEMENTS

Why Should You Perform a Cost/Benefit Analysis?

Call center improvement initiatives should provide measurable benefits for customers, stakeholders, and shareholders alike. This is proven through improved financial results. Discussion of relative financial measures do not come easy to many call center managers. However, learning the language and performing the analysis used by your CFO will help you to gain respect, access, and resources over time.

Defining ROI

Every chief executive officer has a fiduciary duty to maximize the return on every dollar of capital available to the company. Therefore, with a limited supply of capital for investments in process enhancements, every proposal for capital expenditure must be accompanied by a complete financial analysis demonstrating the expected return to the company of the proposed investment.

There are classically two ways to approach an ROI endeavor:

1. Cost reduction and/or cost avoidance

“Direct costs” are those expense items that can be directly attached to a product or service offered by the company, and that can also be easily tracked by the company’s accounting system. Indirect costs are those less tangible costs not as easily tracked by the accounting system and therefore often lumped as overhead.

Focusing on direct costs is the most common approach to ROI calculation and, is often used for call center information/telecommunication technology investments. Some common, direct cost savings are:

  • increased productivity, which allows fewer agents to do more in less time

  • implementing information technology that replaces the agent’s function

altogether

  • reduced telephone costs due to less time in the wait-queue.

ROI calculations of this type are common, straightforward and will not be discussed herein, even though we strongly recommend that they be used in conjunction with the ROI calculation techniques discussed below.

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