The Next Big Thing to improve a BPO Bill to Pay Ratio
Updated: Feb 7
Reading Time: 5 minutes.
The Business Process Outsourcing (BPO) industry aims to deliver outstanding customer service while also making a profit. This is no simple undertaking, and it demands careful cost control and continuous refinement to do more with less.
Any BPO wants to enhance their bill-to-pay ratio (the difference between the amount they bill a customer and the amount they pay their staff per hour), most BPOs tend to have razor-thin margins - it's just the nature of the business. Therefore, any improvement can be a competitive advantage.
To do this, BPOs strive to optimize the number of contacts or productive minutes split by their hourly cost, whether the contract is a cost-per-contact or cost-per-productive minute, to ensure that the majority of the time it pays its Agent is billable.
This means that each time an agent is off or waiting for the next contact is considered as an impediment to the bill-to-pay ratio's efficiency.
So what is the standard practice, and what are the challenges faced?
When billable volume is unavailable, the most competitive BPOs provide employees unpaid lunch breaks or discretionary time off, which is unproductive and wastes time for real-time analysts who must make scheduling exceptions.
Investing in training and coaching is another way to improve the bill-to-pay ratio. However,
while idle time in a contact center might account for a large percentage of an agent's day, it is frequently divided up into small "chunks" - 20 seconds here, 40 seconds there - that are insufficiently useful for training or coaching purposes. So the usual method for a contact center is to invest in employee development is to add additional time (often referred to as shrinkage) to the workforce management plan staffing required to allow time for training and to coach their people.
Finally, another method to improvise billable hours in a cost-per-contact contract set-up is to redistribute agents across multiple channels to complete billable chat and email work during natural idle times. In this way, the BPO can ultimately increase its billing-to-pay ratio by adding billable time to an idle hour or minute for which it is already paying. The challenge is usually the time it takes to redeploy an agent to a different channel, and again, idle time is often 20 seconds here, 40 seconds there. Additionally, act too slow, and you might start to miss service level on top of wasted productivity.
Enter Real-Time Intra-Day Automation
With Real-Time intraday automation technology, idle time can be aggregated and broken into larger "chunks," allowing for overtime reductions or greater time allocated to discretionary unpaid time-off or training/coaching, thus resulting in a decrease in Shrinkage over-staffing.
This is accomplished by continually re-forecasting agent demand in real-time based on actual customer arrival and how long each task takes and tracking which agents have shown up for work in real-time—then using this constantly revised accent requirement automatically adapting the WFM shift plan to find the idle time necessary to give employees their entire working hours in every schedule created. This idle time is then put to good use by automatically scheduling additional training, reducing backlogs, or work that would be done with overtime. Shrinkage in the Workforce Management plan can then be decreased without sacrificing customer service performance.
Every major contact center has a significant but often unquantified administrative overhead - the cost of managing and approving schedule changes due to delays, illness, shift swaps, and training requirements. Real-Time intraday automation technology can automate this overhead without sacrificing customer service.
In addition, you can create real-time agility at speed not possible with a human-only real-time team. For example, the delay caused by a backlog in processing and approving change requests cause a lot of frustration for team leaders and agents alike, sometimes even doing more harm than good to service level or productivity. Real-Time intraday automation technology enables self-service change requests, increasing satisfaction through improved work flexibility and instant clarity.
In 2018, I dipped my toe into Real-Time Automation technology as an early adopter. At the time, the technology still had a way to go to be truly effective, but I was seriously impressed with the potential, and I am convinced this is the future. While this article was written with a BPO in mind, the potential value of a client-side operation is equally compelling. Here is a video of me speaking about some of the successes I had with this technology - please don't judge my early attempt at speaking... it was back in a time when I still had a full head of hair.
A word of warning to those thinking of deploying real-time automation technology. Before relying on a toolset like this, I would highly encourage the organizations to ensure they have done as much as possible with human-based processes. Not every decision point is mathematical in the contact center world, so retaining that human element is also very important. That said, WFM automation can generate significant benefits with its ability to analyze and act on operating conditions much faster than a human can. So the potential to extract just-in-time training or coaching opportunities from seemingly immeasurable pockets of low occupancy in real-time across a large number of agents is quite compelling. The critical thing to remember is that the business rules used to drive this prescribed benefit need to be very clearly thought through, tested, and socialized with all staff. It's one thing to grab those low occupancy pockets, but it demands the operations team to have prebuilt the coaching or training modules you want the automation to kick off. All of that takes a lot of preparation, care, and feeding (nothing worse than an outdated business rule driving activity, thus resulting in it being more disruptive than value add).