Gartner Research

Lead a Contact Center With a Proactive Approach to Cost Management

Published: 30 July 2020


Effective cost optimization is not about large-scale, dramatic cuts in cost, but rather, efficient use of resources from day to day. This research discusses how executive leaders of the contact center should approach cost by managing three variable costs: volume, time and staffing.


Key Challenges

Executive leaders are usually under pressure to optimally utilize their budgets, while balancing performance, creativity, motivation and tenacity. Some key challenges they face are:

  • Establishing a persistent and proactive approach to cost management that continuously reduces spend.

  • Avoiding draconian cost-cutting measures, such as staff reduction, that lead to long-term degradation of customer experience.


Executive leaders of the contact center seeking a structured approach to cost management should ask their direct reports to:

  • Review the three critical levers affecting operational cost (volume, time and staff). Conduct a weekly budget variance analysis to aid this review.

  • Ensure agents are optimized by examining the detailed workforce management report and comparing the forecast with the actual results of team and agent performance on a daily and weekly basis.

  • Track and analyze the call disposition reason codes selected by the agents at the end of calls to continuously identify the top three to five reasons that a customer calls.

  • Improve the consistency of information by establishing standard operating procedures (SOPs) across all channels.


This research has been adapted from for customer service and support leaders.

When a budget crisis arises, executive leaders usually initiate draconian methods of cost reduction, such as immediate layoffs, closing off “live” channels and increasing backlogged inventory.This heavy-handed type of cost reduction is short-term and is usually more expensive in the long run. In addition, companies face losing customers due to the poor service experience, more escalations, complex inquiries, increased overtime to reduced aged inventory, negative impact on employee morale and high attrition.


Proactive cost management is a weekly process that executive leaders should do as part of their budget variance analysis review, with a focus on volume, time and staffing. Continuously reducing costs comes down to managing three variables in a contact center: volume, time and staffing.The scale of these operations allows for realizing significant savings across these variables through small changes in self-service containment, turnaround time, first-issue resolution, next-issue avoidance, adherence and occupancy (see Table 1).

Executive leaders should work with their direct reports to prioritize these steps, based on their biggest opportunities for cost reduction. All steps consider volume, time and staffing to varying degrees to contribute to the overall cost reduction. Actual savings would be based on the contact centers’ specific circumstances, performance, data and analytic tools.

The following steps include example cost savings from a sample company as described in Table 2. “Smith Industries” is a hypothetical midsize company with 120 team members in its contact center.

Executive leaders should work with their direct reports to evaluate agent utilization and identify misused capacity.

To understand agent utilization, executive leaders should develop a set of reports with the workforce management (WFM) team to reveal productivity among the following variables for forecast and actual results:

  • Adherence

  • Occupancy

  • Calls received

  • Calls handled

  • Average handle time (seconds)

  • Average wait time (seconds)

  • Average time after call (seconds)

  • Auxiliary codes

  • Calls transferred

  • Outbound calls

This data can be sourced from contact center agents, direct reports, stakeholders involved in the product or line of business, and customers. It is common to find variance among these segments to derive cost drivers or best practices to apply throughout the operation.

These WFM reports will be only as valuable as the foundation of historical data used, along with any current trends or underlying assumptions. For example, to ensure reports are accurate and reliable, executive leaders must have direct reports meet with cross-functional peers, such as product, marketing, IT and any other department that would have any effect (positive or negative) on inquiry volume.

Whatever operations learns should be shared with the WFM team, and together, they should agree on the right mix of historical data and current events. For example, marketing is starting a new campaign that is offering buy one get one free (BOGO), and based on historical data, BOGO offers usually increase call center volume by 25%. That week’s forecast would be a combination of three to five years of historical volume increased by 30%. The team agrees to increase the forecast by an additional 5%. That is because the company had a longer waiting period between BOGO offers, and management anticipates more interest from current and new customers.

Once the key assumptions have been agreed on, executive leaders should review past WFM reports regularly. Executive leaders should ensure that the contact center is optimally staffed (based on the WFM report) and that contact center agents are following the guidelines for adherence, occupancy and the other items in the list above. Executive leaders should evaluate performance metrics to identify specific team members who are outperforming (or underperforming) their peers. This is an opportunity to determine drivers of greater productivity and to work with lower-performing individuals.

Executive leaders must ask their direct reports to identify the top three to five customer contact reasons. These reasons often represent a disproportionately large number of total customer contacts. Thus, reducing volume for just a handful of these top reasons can significantly reduce incoming volume. Two common ways to identify contact reasons include speech or text analytics and disposition code tracking via case management.

Trends on high-volume topics should be shared with cross-functional peers to determine end-to-end root causes. A cross-functional steering committee is the best way to assess all issues to determine where automation or self-service would yield the greatest return.

These key stakeholders can provide unique insight on why resolution may not be working seamlessly. Everyone’s goal is to make the member’s journey effortless and eliminate the need for the customer to contact the company. Having the right people review the top contact reasons will make it easier to gain buy-in, and calculate ROI for proposed changes than if it is done in silos.

Executive leaders should delegate their direct reports to create one SOP for as many unique workflows, frequently asked questions and processes as possible to address the majority of customers’ questions. The SOPs must describe in detail how the contact center agent should best approach the issue (step by step) to resolve it correctly on first contact.

Executive leaders should identify “best practices” for frequently asked questions, workflows and processes. Once the best practices have been identified and documented, executive leaders should update directions in the knowledge management (KM) system, new-hire training curriculum and module training. Executive leaders should then train the contact center staff on these updated workflows and processes.

Predefined workflows ensure that contact center team members, regardless of location, language or time of day, respond consistently to the same questions and obtain the same outcomes. This reduces repeat callers, complaints, escalations and overtime hours, and provides customers with confidence they are obtaining current and accurate information, especially when using channels other than voice.

Over time (and with some marketing assistance), more customers feel comfortable using self-service, and the voice channel will see a reduction in call volume. This allows the contact center agents to focus on more-complex issues, reduce costs (by using cheaper channels such as self-service), increase first-contact resolution, and improve customer satisfaction and Net Promoter Scores (NPS).

Executive leaders can use the quality and cost savings realized from standardization to build a business case for reinvesting in tools to automate additional repeatable tasks in the SOPs through robotic process automation.

For example, a confirmation letter can be a robotic form letter configured to appear customized, yet printed in the mailroom, once the agent indicates (with “hot keys”) the reason for the product change. The “robot” inserts the member’s name, address and hot key (specific reason for the change, all with preapproved text). It then prints the envelope and sorts it by ZIP+4 Code to receive the U.S. Postal Service sorting discount.

This enables the contact center agent to stay focused on the next call, rather than having to write free-form letters, proof the letters and forward them to quality assurance (QA) for approval prior to sending to the customers. In such a suboptimal scenario, the agent would need to receive QA approval, print the free-form letters (with changes), type up or print the envelopes, and walk over to the mail bin, which is picked up twice a day. If the mail was already picked up, the customer would be waiting an additional day for the letter.

Conversely, the mailroom via the robot can have the letters and envelopes printed by a certain time of day, ready for USPS pickup. Automation tools reduce overall operating costs, ensure process consistency, improve quality and production, and reduce turnaround time. So, there will be an ROI.

After following Steps 1 to 3, Smith Industries realized total Year 1 savings of approximately $9.7 million to $11.3 million.

Executive leaders should encourage their direct reports to share roadblocks that hinder their effectiveness. With everyone focused on the same goals and following SOPs, there will be reduced live-channel volume and improved quality and productivity, and technology can be leveraged to remove repetitive tasks from agents.

Executive leaders should invest the extra time and savings to work more closely with their direct reports to provide refresher training, discuss current trends, coach and mentor. Most importantly, they can identify opportunities to celebrate successes — keeping morale up, while continuously improving their customers’ experience.

Gartner Recommended Reading

When taking on high-stakes customer service projects, a need exists for a cross-functional steering committee. Customer service and support leaders must collaborate with many stakeholders to improve the customer’s experience, reduce costs, improve retention and build loyalty.

Customer service and support leaders can use this annual cycle to help prioritize and optimize the department’s strategic planning and current-year initiatives.

Use this step-by-step tool to develop assumptions and high-level estimates to determine whether an upfront investment for a service or support project or initiative will result in a sufficient return for the company.

Customer service and support leaders interested in establishing or expanding their remote workforce can use this research to understand how prevalent remote options are for their respective industries and business models.

This guide includes documents that will help you incorporate performance metrics that align with your business-critical strategic objectives and measure and communicate metrics in a compelling way.

Archer uses this process to identify opportunities for improvement due to a lack of existing data for process areas and uses the visual tools at each stage to raise support among key stakeholders for the importance of process improvement projects. The pain point prioritization process has helped Archer identify cost-saving improvement initiatives.


CIO Research Team

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