A KPI for Operational Excellence

It won't work for everyone - but here's a metric for operational excellence that a client recently shared.

A telecoms service provider, the initial focus was their customer service operations, which serve around 3 million customers from contact centers both onshore and offshore.

They started with their end-to-end business processes. With executive sponsorship and the stakeholders fully engaged, they defined in 20:20 vision what they do, how they do it, and who's responsible.  And all within one coherent top-down process model. 

As the processes were tied down in each workshop, they then asked the stakeholders: 'OK, so how would we know if we are being successful with this process? What are the KPIs that would tell us?'

Experience across many clients shows that this approach delivers the smartest metrics because it helps the stakeholders to identify leading performance indicators, to step outside of the rear-view lagging metrics that they are used to. Critically, it also leaves the business owning the chosen metrics, which become an intrinsic part of the end-to-end process.

All of which is great - it leads to the key metrics for contact center performance such as average time-to-respond and average call handling times - but it's not exceptional, just standard best practice.

This particular client went one step further, and asked the question:'So what does success look like at the highest level, and from the customer perspective?' 

The answer was operational excellence. This organisation's customers had much better things to do with their lives than call in to their contact centers.  If everything worked properly, then, outside of initial registration maybe, the customer would never need to call them.

They carefully defined a set of KPIs to capture this - variants on a Propensity-to-Call (PTC) metric. If their end-to-end processes delivered operational excellence then their customers would be satisfied and only ever need to contact them in some very specific circumstances. 

The client calculated that a 1% reduction in PTC enabled a minimum annual saving of $80k in contact center direct costs alone.

PTC helps build the business case for quality improvement programs in that organisation's core operations. If a project will increase service reliability and so reduce PTC, then it's a clear quantifiable benefit for that project.

Comments

[Indranil]

This is something very interesting.
But will this PTC be applicable to all service industries like facilities management, hospitality etc or will it be applicable only for certain ones.

rgds
Indra

[Mike Gammage]

Hi Indra

KPIs will usually be specific to the organisation. Outside of KPIs required for industry benchmarking, the best metrics - the ones that can best drive operational improvement - come from analysis of the end-to-end process, by the process stakeholders.

PTC is interesting here because it is a proxy for operational excellence in this client's core business. But each organisation has to define the KPIs that best fits its own processes.

Mike