Key Performance Indicators (KPIs)

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SESSION I

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SESSION I

• Introduction

• What are Key Performance Indicators

• Understanding KPIs

• Key Performance Indicators MUST be Quantifiable

• KPIs MUST be Key to Organizational Success

• What to do with Key Performance Indicators

• Assignment 1

• Questions and Answers

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Introduction

Key Performance Indicators (KPI), also known as Key Success Indicators (KSI), help an organization define and measure progress toward organizational goals.

Once an organization has analyzed its mission, identified all its stakeholders, and defined its goals, it needs a way to measure progress toward those goals.

Key Performance Indicators are those Measurements.

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What Are Key Performance Indicators (KPI)

Key Performance Indicators are quantifiable measurements, agreed to beforehand, that reflect the

critical success factors of an organization.

They will differ depending on the organization. Whatever Key Performance Indicators are selected, they must reflect the organization's goals, they must be key to its success and they must be quantifiable

(measurable). Key Performance Indicators usually are long-term considerations.

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What Are Key Performance Indicators (KPI)

The definition of what they are and how they are measured do not change often.

The goals for a particular Key Performance Indicator may change as the organizations goals change, or as it

get closer to achieving a goal.

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UNDERSTANDING KPIs

Source ICMI

BUSINESS % OF INCOME FROM RETURN CUSTOMERS

TRUE FALSE

SCHOOL GRADUATION RATES OF STUDENTS

TRUE FALSE

CUSTOMER SERVICE DEPARTMENT

PERCENTAGE OF CUSTOMER CALLS ANSWERED IN THE FIRST MINUTE

TRUE FALSE

SOCIAL SERVICE ORGANIZATION

NUMBER OF CLIENTS ASSISTED DURING THE YEAR

TRUE FALSE

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Key Performance Indicators Must Be Quantifiable

If a Key Performance Indicator is going to be of any value, there must be a way to accurately define and measure it. "Generate More Repeat Customers" is useless as a KPI without some way to distinguish between new and repeat customers. "Be The Most Popular Company" won't work as a KPI because there is no way to measure the company's popularity or compare it to others.

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KPIs MUST be Key to Organizational Success

Many things are measurable. That does not make them key to the organization's or program’s success. In selecting Key Performance Indicators, it is critical to limit them to those factors that are essential to the program reaching its goals. It is also important to keep the number of Key Performance Indicators small just to keep everyone's attention focused on achieving the same KPIs.

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What to do with Key Performance Indicators

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Once you have good Key Performance Indicators defined, ones that reflect your program’s goals, one that you can measure, what do you do with them? You use Key Performance Indicators as a performance management tool, but also as a carrot. KPIs give everyone in the organization a clear picture of what is important, of what they need to make happen.

You use that to manage performance. You make sure that everything the people in your team do is focused on meeting or exceeding those Key Performance Indicators. You also use the KPIs as a carrot. Post the KPIs everywhere: in the lunch room, on the walls of the conference room, on the company intranet, even on the company web site for some of them. Show what the target for each KPI is and show the progress toward that target for each of them. People will be motivated to reach those KPI targets.

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ASSIGNMENT 1

Make a list and explain 5 KPIs for your individual Program. Please include formulae if any:

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QUESTIONS AND ANSWERS

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SESSION II

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SESSION II

• Assignment 1 Discussed

• How are Call Centers Measured?

• Key Indicators (INBOUND)

• Key Indicators (OUTBOUND)

• Key Indicators (INBOUND & OUTBOUND)

• Assignment 2

• Questions and Answers

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ASSIGNMENT DISCUSSED

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HOW ARE CALL CENTERS MEASURED?

Call Centers are often measured by their performance on key indicators.   These indicators tell how the call center is doing in terms of efficiency, cost, service quality, and performance.  Major key

indicators that call centers track include: Average Speed of Answer Average Handling Time

Service Level and Response TimeForecasted Call Load vs Actual

Sales per HourContacts per HourConversion RatePenetration Rate

Time of Day effectivenessAbandon Rate

Customer Satisfaction Schedule Staff vs Actual

Turnover Rate

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INBOUND

OUTBOUND

INBOUND & OUTBOUND

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KPIs - INBOUND

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Key Indicators (INBOUND)

Average Speed of Answer - ASA• Total delay divided by total # of Calls• Derived from the same data as Service Level• It makes little sense to have both ASA and SL as Key Indicators

Average Handling Time – AHT• Sum of average talk time plus average after-call work• MUST be forecasted for specific times of day. Daily averages does not

work

Source ICMI

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Key Indicators (INBOUND)

Service Level – SL and Response Time• Concrete Targets for planning and budgeting• Contacts that MUST be handled when they arrive are measured by service

level. Example: X percent of contacts answered in Y seconds• Contacts that can be handled at a later time are measured by response time. Example: 100% of contacts handled within N days/hours/minutes

Forecasted Call Load vs Actual• % variance between the call load forecasted and the call load actually

received• Forecasts that are off by more than 3% to 5% for large centers and 10% for

small centers, generally point to problems with the forecasting process.

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KPIs - OUTBOUND

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Key Indicators (OUTBOUND)Sales per Hour - SPH• Total amount of sales generated divided by the agent hour• Usually represented in ones and decimals (x.xx) Example: 10 Sales divided by 5 hours = 2.0 SPH

Contacts per Hour - CPH• Total contacts dispositioned by an Agent divided by agent hour• Usually rounded off to the nearest tense (20) Example: 133 contacts divided by 5 hours = 27**Actual calculation = 26.6

Source ICMI

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Key Indicators (OUTBOUND)

Conversion Rate• The percentage of contacts converted into Sales• Formula = total sales divided by total contacts

Penetration RateCall List Measured By:• % Contacts• % Pass through (Non Contacts)• % Dialer Dispositions as Retries• % Dialer Dispositions as Non – Retries

Source ICMI

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Key Indicators (OUTBOUND)

Time of Day Effectiveness

The periods of the day when the most contacts are made. This is the most important driver of optimum staffing in an Outbound environment

Source ICMI

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KPIs – INBOUND & OUTBOUND

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Key Indicators (INBOUND & OUTBOUND)

Abandon Rate• Calculated as percent abandonment rates using one of the following

formulas:

– All calls abandoned (all calls abandoned + all calls answered)

– Calls abandoned after objective (calls abandoned after objective + all calls answered)

• Abandoned calls are often symptons of other problems eg., insufficient staffing and system resources

Source ICMI

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Key Indicators (INBOUND & OUTBOUND)

Customer Satisfaction

• Measures the percentage of all customers who felt satisfied

• Significant Increases or Decreases serve as a barometer

• Studies have linked customer satisfaction to customer loyalty, repeat purchase behavior and word-of-mouth advertising

Source ICMI

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Key Indicators (INBOUND & OUTBOUND)

Schedule Staff vs. Actual

• A comparison of the number of agents scheduled vs. the the number actually in the centre.

• This measure is independent of whether or not you actually have the staff necessary to achieve a targeted service level and or response time

• If this measurement indicates a problem, root cause analysis may point to one or more areas, such as:– Adherence to Schedule– Inaccurate or unrealistic schedules– Conflicting priorities eg., supervisors encourage their groups to

deviate from schedules as circumstances unfold– Inaccurate workload and shrinkage forecasts.

Source ICMI

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Key Indicators (INBOUND & OUTBOUND)

Turnover Rate

• Percentage of Frontline staff that leaves their positions. This may include voluntary turnover (eg., promotions, resignations, retirement) or involuntary turnover (eg., dismissals and layoffs)

• Call centre managers should calculate an annualized turnover rate using the following formula:

Turnover = # of agents exiting the job 12 months avg. actual # of agents during period X # of months in period

Source ICMI

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ASSIGNMENT 2

Calculate the following KPIs based on the scenario below. Round your answers to the nearest whole number. We collected the following data for Agent Group A from 9:00 to 9:30 on Tuesday October 12, 2004.

Forecast: Actual Results:

Call Volume: 270 Total Calls offered 253

Average Talk Time: 192 secs Total calls answered 225

Average after call work 35 secs Answered within 30 secs 156

# of Agents Scheduled 38 Abandoned 28

SL GOAL 80:30 Abandoned within 30 secs 9

Average Talk time 185 secs

Average after call work 39 secs

Total Delay 4,495 secs

# of Agents 35

Calls resolved on initial contact 197

Total Revenue $7,875

Total Costs $1,124

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ASSIGNMENT 2

Find:

1. Average Call Value (use calls answered)

2. Service level

3. Average speed of answer (use calls answered)

4. Percent Abandoned

5. Cost per call (use calls answered)

6. Average Handling Time

7. Forecasted to actual call load (use calls offered)

8. Scheduled to Actual Staff

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QUESTIONS AND ANSWERS