Your Money’s Worth: the Business Value of VoIP RecordingGreg Sherry, Director Marketing and Business Development, Witness Systems

September, 2005

Voice over Internet Protocol (VoIP) is anticipated to becomethe dominant business telephony model within the decade.Much has been written about the potential of VoIP todecrease telephony costs by making phone servicecheaper. In North America, articles abound on Vonage —the largest provider of Internet phone service — and otherVoIP providers that convert phone calls into data that travelthrough high-speed Internet connections rather than overtraditional phone lines. The major benefit of the servicethat companies like Vonage provide is that local and long-distance calls can be made from anywhere within the US,Canada and other countries for one low price versus theper-minute and higher-standard charges from traditionalphone company calling plans.

But the value of VoIP doesn’t stop there. VoIP is becomingone of the great enablers of Workforce Optimization (WFO)at small, medium and large enterprises alike. Workforceoptimization combines the processes, services and technol-ogy necessary to enable enterprises to deploy the bestresources for meeting customer demand and increasingcustomer value efficiently and effectively while getting thehighest return on investment.

VoIP allows organizations to exploit advances in telephonyinfrastructure, including the flexibility to impact a businesswell beyond saving money on phone service and per-minute toll charges. A shift in focus is occurring fromsaving money on communication costs to broader areasof opportunity such as increasing workforce productivityand optimizing different functional areas of the business.

This discussion:

• Focuses on the business drivers that make recordingVoIP interactions a compelling proposition,

• Offers examples of how companies across variousindustries have discovered real value in VoIP interactionrecording, and

• Suggests how you can optimize your business or work-force in ways you may not have previously considered.

Call Centers Fuel Growth of VoIP throughoutthe Enterprise

From a world without VoIP just a few years ago, it is nowbecoming inevitable that the technology will be deployedin everything from call centers to the executive suite, fromremote locations and home offices to large enterprises,from sales and back-office operations to many otherfunctional areas of businesses. VoIP, combined withtoday’s leading workforce optimization software—whichbundles call-recording, workforce management, perfor-mance management, and e-learning functionality in asingle application—is helping companies both within andbeyond the call center.

In the VoIP-enabled call center where agents or associatestypically take orders, resolve issues and serve customers,calls can be routed seamlessly—and inexpensively—toagents working in the central facility or to their counter-parts in satellite locations, even to those working at home.The technology is transparent to the caller and provides ahigh degree of flexibility to the business.

Driving the acceptance of VoIP today, are the large, me-dium and small call centers that also deliver customer carethrough satellite locations and outsourced resources.Through VoIP, all of these organizations can be centrally orde-centrally managed and cost-effectively maintained.Today, most major organizations are evaluating VoIP; manyhave already made the move to it.

Benefits to be Realized from VoIP

The circuit-switched public telephone network most peopleuse today, where phone calls travel over copper wire, hasbeen with us for decades. It is consistent, reliable, andoffers many opportunities for workforce optimization, bothwithin and beyond the call center. Applications aboundthat allow call centers to maximize this technology:predictive dialers, computer telephony integration (CTI),automatic call distributors (ACDs), skill-based routing,quality monitoring, and 100 percent recording have

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become staples of customer relationship management. ButVoIP is changing all that.

Companies can reduce cost, complexity and administrativeoverhead through the use of VoIP, since control of tele-phony applications is managed by software running on PCservers, rather than on a dedicated telephony switch. Formulti-site enterprises with separate voice and data net-works, VoIP provides a means of integrating the networks,reducing costs and achieving better utilization from theshared infrastructure. It is also much easier to integrateother call center software with VoIP applications due to lesshardware being involved and less dependency on particu-lar vendors or versions of CTI and other applications.

VoIP makes it easy and cost-effective to manage linechanges when employees relocate, or to add and removeremote users and the solution is easily scalable from onephone upwards, in increments of one. VoIP also allowssmaller organizations to utilize application functionalitypreviously available only to larger organizations withbroader budgets. Smaller organizations can also appear tobe much larger than they actually are as VoIP provides theability to create a widely distributed support staff that hasthe appearance of a larger enterprise.

VoIP Recording Delivers a Cost- and CompetitiveAdvantage

The demand for call recording has increased dramaticallyin recent years, as businesses face the competitive chal-lenge of improving customer service, optimizing theworkforce, improving business processes, and complyingwith new legal requirements.

Because it is software based, VoIP recording can be lessexpensive than digital recording solutions, since it requiresno phone line taps or third-party telephony cards and fewerservers. No complex installation is necessary as recordingrequires only a server to run the software and a data switchfor port mirroring (a method of monitoring network traffic).

And since a VoIP call recording system is managed andmaintained like any other software program, the incremen-tal cost of adding remote sites is negligible. At the sametime, some of the best solutions can mix traditional phonesystem infrastructure and VoIP infrastructure in the sameimplementation to protect technology investments thathave already been made.

Enabling Enterprise-Wide Workforce Optimization

At leading companies, insight gained from call recordingsis shared with others parts of the business; at othercompanies the information is principally used within thecall center itself. With VoIP recording, it is possible toimplement recording technology both within the IP-enabledcall center and throughout the organization. Because ofthis, the potential for workforce optimization increasesexponentially because technology allows organizations toeasily share key customer-related data throughout differentfunctional areas and divisions of the business.

VoIP recording can take place automatically or at the touchof a button to record selected calls. Recorded calls may betagged, and conversations shared via e-mail or searchedand retrieved using a variety of selection criteria. Record-ing rules such as “Record 100 Percent of All Calls,” “Recordon Demand,” “Record 100 Percent of All Successful SalesCalls,” or “Record 100 Percent of Calls About New ProductX” can set the stage for gathering information that canimpact customer service and the entire business from frontoffice to customer service to sales and other departments.Analyzing these recorded interactions is becoming essen-tial as businesses seek to gain a competitive advantagefrom a better understanding of their customers and a moreeffective approach to internal and external communication.

Those involved in call centers and service environmentsare familiar with Key Performance Indicators (KPIs), whichare commonly used measurements in inbound andoutbound call centers. The following table (Table 1) showscommon call center KPIs.

Average Talk Time Total number of seconds the caller was connected to the agent

Calls Per Hour Average number of calls that an agent handles per hour

Cost Per Call Sum of all costs for running the call center for a period divided by the number of callsreceived in the call center for the same period

Customer Churn Percentage of customers who cancel service or leave your company compared with thetotal customer or subscriber base within a particular time period

First Call Resolution Percentage of calls that do not require an additional call to the call center or return callfrom the agent to resolve the issue in the original call

Revenue Per Call Average revenue generated from an inbound or outbound closed sale, cross-sale, orcollections call

Service Level The formula for this metric is (calls answered in less than x seconds) / offered callsmultiplied by 100). The most common goal in the call center industry is 80 percent ofall calls answered in 20 seconds or less

Call Center KeyPerformance Indicator (KPI) Call Center KPI Definition

Table 1. Common Call Center KPIs.2

Other departments within the enterprise—back office,sales, marketing, etc.— are driven by similar measure-ments for business and workforce optimization, though in aslightly different context. As an example, let’s look atcommon call center KPIs versus non-call center insuranceindustry back office KPIs shown in Table 2.

As the Table 2 illustrates, KPIs and key measurementsoutside the call center are often very similar to those withinthe call center. The intelligence and relevant informationcontained in recorded transactions that occur throughout abusiness can be invaluable in improving performance,business planning and real-time decision-making in avariety of departments whether in the call center or in theextended enterprise.

Businesses evaluate ROI when making capital purchasedecisions. With VoIP, investments in call center technologycan produce a meaningful ROI with a population of 50, 100to 1000+ agents or 50, 100 to 1000+ employees. WhatVoIP enables, particularly with the addition of recordingapplications, is the optimization of the entire enterprise andrelevant ROI, across business units. Some call centershave made great leaps in productivity and value to thebusiness by focusing on improving KPIs that have a realimpact on the business by leveraging customer intelligencegathered from VoIP recording. Now, other areas of thebusiness can benefit as well.

Thinking Differently About Your “Customer”

Competition and the need for timely data upon which tobuild business strategies and make day-to-day decisionshave begun to change the way we define a customer.Once narrowly thought of as an individual or organizationthat purchased goods and services, the definition now hasbeen broadened to include all key enterprise departmentsthat have a stake in the success of the organization.

Average Talk Time Claim Handle Time

Calls Per Week Claims Per Week

Cost Per Call Cost Per Adjudicated (Settled) Insurance Claim

Customer Churn Customer Churn

First Call Resolution First Contact Settlement—upon receipt of claim, identify parties to resolve claim,settle claim within same day if possible to limit lawsuits and litigation

Revenue Per Call Appropriate Settle Range—claim settled in appropriate dollar range

Service Level 24 Hour Contact—claim rep contact all parties involved within 24 hours

Call Center KeyPerformance Indicator (KPI) Insurance Industry Back Office (Non-Call Center) KPI’s

Table 2. Common Call Center KPIs Versus Non-Call Center Insurance Industry Back Office KPIs.

Thus, sales are marketing’s customer for market intelli-gence. Similarly, marketing is sales’ customer for externalcustomer feedback on products and services. Develop-ment and engineering rely heavily on marketing and salesto translate market needs.

The finance team’s revenue objectives must be in align-ment with sales, training and customer support. Andeveryone relies on a timely, accurate flow of informationand ideas from third-party suppliers, consultants, andothers. Each is an internal customer to the other and eachrelies on the accurate and timely flow of information. VoIP,specifically on the recording side, delivers to the enterprisea degree of intelligence that until now was typicallyavailable only within the call center.

IP recording technology allows individuals and depart-ments throughout the enterprise to access and act on dataassociated with every interaction within the company.With everything recorded via business rules and proactiveactions, a wealth of customer and business information isavailable for use throughout the enterprise for businessand workforce optimization.

How Enterprises are Benefiting from VoIP Recording

Enterprises are beginning to embrace—and benefit from—IP recording technology in a number of areas beyond thecall center. Shown in Illustration 1 is a summary of VoIPrecording case studies, followed by a more detailedoverview of each example.

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VoIP Recording Case Studies- Summary

Illustration 1. VoIP Recording Case Studies Summary

VoIP Recording Case Studies- Detail:

A Growing Insurance Company Employs VoIPRecording to Create New Revenue Opportunities

A third-party administrator of long-term life insurance,which fields a variety of calls from insurance agencies’management and staff, determined that one of the bestways to generate additional business was to ensure thatevery interaction be of the highest caliber. The companywanted to capture 100 percent of its calls for compliancepurposes, automate many of its internal processes, anduse the customer intelligence captured to refine andenhance its customer service and sales initiatives.

According to the Vice President of Marketing Services atthe insurance company, “Using the intelligence capturedfrom this technology, we are able to solve critical businessproblems by reviewing recorded calls and focusing onsolutions that work.”

Virtually all areas of the company including marketing andclaims, as well as policy-owner services, use the recordingsolution. Using the intelligence captured by the system,the company is able to solve critical business issues byreviewing calls and focusing on solutions. In addition tousing the recordings for compliance, monitoring andcoaching purposes, the solution has also proved beneficial

in training new hires in dispute resolution. Implementing arobust VoIP recording solution, the company captures andstores voice and data interactions and has estimated that ithas increased workforce productivity by almost 50 percentand decreased data error rates by seven percent.

Business Benefit: Recording provides the enterprise with awealth of data drawn from customers and others. Miningof that intelligence and making it available throughout theorganization facilitates early spotting of trends and identifi-cation of new revenue opportunities.

A Busy Credit Union Uses VoIP Recording toCapture Best Practices and Improve Training

Credit unions—like all financial institutions—must meet abroad set of federal regulations as well as the high serviceperformance expectations of members whose money theymanage. To effectively meet its members’ service expecta-tions, a credit union invested in a solution to monitor andrecord member transactions. Added to ease of use,reliability, and robust archival capabilities, was the require-ment that the new system be scalable and operate withinthe credit union’s VoIP environment.

The company’s 100 percent recording solution allows it tomeet all regulatory requirements, capture and archive 100percent of calls, automatically tag and categorize calls for

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use in business optimizations actions, and easily retrievecalls in the event of a dispute. Call center agents aretrained using “best practice” interactions that are capturedand organized by category in the VoIP recording solution.Credit union management credits the VoIP recordingsolution with a 40 percent improvement in call centerservice quality and a 20 percent improvement in front-linesupervisor productivity.

Business Benefit: Regular monitoring and analysis ofcustomer intelligence allows the enterprise to quicklyaddress trouble spots before they erupt, identify andimplement best practices, and share valuable marketinsight. Sharing customer interactions recorded in the callcenter with agents and other members or the organizationcan transform a call center from a cost center into acontributor to the enterprise’s bottom line.

A Nationwide Auto Parts Distributor Uses VoIPRecording for Trouble Shooting and to Improve theBottom Line

At a leading distributor of parts for four-wheel-drive trucksand sport utility vehicles, supervisors found it challengingto determine when to listen in on agent-customer interac-tions, making it a hit-or-miss activity. With more than 1.2million calls handled yearly by some 50 agents, manage-ment required a new recording technology that wouldeasily integrate into its VoIP environment, giving it theability to monitor agents in real-time monitor and recordagents. Additionally, the company realized the opportunityto gain more value from telephone contacts—includingcustomer intelligence—by immediately recording, catego-rizing, and storing IP telephony calls that had a directimpact on its bottom line.

Since implementing the system, the company has realizedmany efficiencies and process improvements in its day-to-day operations. Co-existing with its text- and data net-work, the distributor is able to monitor calls 30 percentmore efficiently, saving time and money through theautomation of the recording process.

The system’s on-demand capabilities have given manage-ment the ability to help its call staff improve customerservice, which has been credited with helping grow salesby eight percent.

Business Benefit: Recording allows the enterprise to trainstaff through exposure to both customer and internal calls.It also allows the enterprise to capture best-practiceinteractions and share them throughout the organizationfor near real-time training and sales growth.

A Concrete Manufacturer Uses VoIP Recording toResolve Disputes with Customers

In the construction business, it is essential that orders forbuilding materials be filled quickly and accurately. Miscom-munication between a contractor and concrete supplierover the quality of cement required for a particular job, forexample, could lead to disastrous consequences on theconstruction site.

A less dramatic example: a concrete company’s recordsshowed that a customer ordered seven truckloads ofcement. The customer’s records indicated that they hadordered only four truckloads. Because there was no recordof the order (as it was placed over the phone) there was noway to review the transaction to determine where themiscommunication occurred. The concrete companyultimately had to incur the cost of the over shipment.

To avoid miscommunication and to protect themselvesfrom potentially expensive litigation, the concrete com-pany now records every customer interaction. Thetechnology serves as a tool for dispute resolution and alsohelps them ensure a superior level of service to theircustomers as recorded interactions are reviewed andevaluated to determine service quality.

Similarly, a large Asia Pacific-based securities companywith 93 sites and 6,000 enterprise (non contact center)users has a legal requirement to record stock trades andother financial transactions. A VoIP recording solutionprovides the entire enterprise with a record-on-demandcapability. The record-on-demand capability fulfills abusiness requirement to stop/start interaction recording forcompliance and other reasons and is used enterprise wide.

Clearly, recording VoIP interactions helps these companiesavoid disputes with clients and other parties, while at thesame time it allows them to optimize service delivery andquality.

Business Benefit: Recording all interactions, transactionsand commitments made by employees throughout theenterprise helps ensure that misunderstandings areavoided and commitments are understood and kept.Because recording captures indisputable evidence that aconversation has taken place—and delivers the fullcontent as well—it can be a powerful deterrent to dis-putes, frivolous lawsuits and the expenses associated withlitigation.

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What’s in the Future for VoIP?

IDC reports that about 10 percent of all voice calls are nowmade with VoIP technologies. And a poll by CompTIAfound that businesses believe that VoIP offers the mostopportunity for productivity gains. According to GartnerResearch, most organizations will not benefit from a singlefeature of (VoIP), but rather from the sum of many indi-vidual changes that support business initiatives andincrease efficiency.

The driving force for change to VoIP continues to be thesignificantly reduced cost associated with IP telephony.But, new applications and benefits to be realized through-out the larger enterprise are also creating a buzz for widerVoIP adoption. While the search for VoIP’s elusive “killerapp” continues, the list of cost and performance benefitsassociated with recording and monitoring continues togrow, making it increasingly easy for businesses to justifyinvestments in VoIP recording and other VoIP workforceoptimization technologies.

About the Author

Greg Sherry is Director of Marketing and BusinessDevelopment at Witness Systems, a global provider ofworkforce optimization software and services. Witnessis headquartered in Roswell (Atlanta) Georgia.

Greg’s background includes leading business optimiza-tion and service quality initiatives at Verizon Wireless(GTE Wireless) in Atlanta, Georgia. The team Greg ledreceived the highest level annual company award—thePresident’s Award—based on measurable contributionsto service quality and business optimization.

For more information, contact the author atgsherry@witness.com or Witness Systems atinfo@witness.com.

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