Service-level agreements in call centers: Perils and prescriptions (original) (raw)

Call Center Outsourcing Contracts Under Information Asymmetry Edieal J. Pinker

Management Science, 2008

I n this paper, we examine contracts to coordinate the capacity decision of a vendor who has been hired by a client to provide call center support. We consider a variety of contracts, all based on our observations of contracts used by one large vendor. We examine the role of different contract features such as pay-per-time, pay-per-call, service-level agreements, and constraints on service rates and abandonment. We show how different combinations of these contract features enable client firms to better manage vendors when there is information asymmetry about worker productivity. In particular, we focus on how different contracts can coordinate by yielding the system-optimal capacity decision by the vendor and consider how profits are allocated between the client and the vendor.

Call Centers with Delay Information: Models and Insights

Manufacturing & Service Operations Management, 2011

In this paper, we analyze a call center with impatient customers. We study how informing customers about their anticipated delays affects performance. Customers react by balking upon hearing the delay announcement, and may subsequently renege, particularly if the realized waiting time exceeds the delay that has originally been announced to them. The balking and reneging from such a system are a function of the delay announcement. Modeling the call center as an M/M/s+M queue with endogenized customer reactions to announcements, we analytically characterize performance measures for this model. The analysis allows us to explore the role announcing different percentiles of the waiting time distribution, i.e., announcement coverage, plays on subsequent performance in terms of balking and reneging. Through a numerical study we explore when informing customers about delays is beneficial, and what the optimal coverage should be in these announcements. It is shown how managers of a call center with delay announcements can control the tradeoff between balking and reneging, through their choice of announcements to be made.

Call center outsourcing: Coordinating staffing level and service quality

2008

In this paper, we study the contracting issues in an outsourcing supply chain consisting of a user company and a call center that does outsourcing work for the user company. We model the call center as a G/G/s queue with customer abandonment. Each call has a revenue potential, and we model the call center's service quality by the percentage of calls resolved (revenue realized). The call center makes two strategic decisions: how many agents to have and how much effort to exert to achieve service quality. We are interested in the contracts the user company can use to induce the call center to both staff and exert effort at levels that are optimal for the outsourcing supply chain (i.e., chain coordination). Two commonly used contracts are analyzed first: piecemeal and payper-call-resolved contracts. We show that although they can coordinate the staffing level, the resulting service quality is below system optimum. Then, depending on the observability and contractibility of the call center's effort, we propose two contracts that can coordinate both staffing and effort. These contracts suggest that managers pay close attention to service quality and its contractibility in seeking call center outsourcing.

Call Center Outsourcing Contracts Under Information Asymmetry

Management Science, 2008

In this paper, we examine contracts to coordinate the capacity decision of a vendor who has been hired by a client to provide call center support. We consider a variety of contracts, all based on our observations of contracts used by one large vendor. We examine the role of different contract features such as pay-per-time, pay-per-call, service-level agreements, and constraints on service rates and abandonment. We show how different combinations of these contract features enable client firms to better manage vendors when there is information asymmetry about worker productivity. In particular, we focus on how different contracts can coordinate by yielding the system-optimal capacity decision by the vendor and consider how profits are allocated between the client and the vendor.

A dynamic prioritization policy for the callback option in a call center

Flexible Services and Manufacturing Journal, 2021

In this paper, we study the M n ∕M n ∕c∕(K 1 + K 2) + M n system with two finite-size queues where underlying exponential random variables have state-dependent rates. When all servers are busy, upon arrival customers may join the online or the offline/ callback queue or simply balk. Customers waiting in the online queue are impatient and if their patience expires, they may choose to join the callback queue instead of abandoning the system for good. Customers in the callback queue are assumed to be patient. Customers are served following a threshold policy: when the number of customers in the callback queue surpasses a threshold level, the next customer to serve is picked from here. Otherwise, only after a predetermined number of agents are reserved for future arrivals, customers remaining in the callback queue can be served. We conduct an exact analysis of this system and obtain its steady-state performance measures. The times spent in both queues are expressed as Phase-type distributions. With numerical examples, we present how the policy responds when shorter callback times are promised or customer characteristics vary. Keywords The M n ∕M n ∕c∕(K 1 + K 2) + M n queue • Impatient customers • Callback option • Phase-type distribution • Call centers * Barış Balcıoglu

The Impact of Revenue-Maximizing Priority Pricing on Customer Delay Costs

Decision Sciences, 2009

Speed is an increasingly important determinant of which suppliers will be given customers' business and is defined as the time between when an order is placed by the customer and when the product is delivered, or as the amount of time customers must wait before they receive their desired service. In either case, the speed a customer experiences can be enhanced by giving priority to that particular customer. Such a prioritization scheme will necessarily reduce the speed experienced by lower-priority customers, but this can lead to a better outcome when different customers place different values on speed. We model a single resource (e.g., a manufacturer) that processes jobs from customers who have heterogeneous waiting costs. We analyze the price that maximizes priority revenue for the resource owner (i.e., supplier, manufacturer) under different assumptions regarding customer behavior. We discover that a revenue-maximizing supplier facing self-interested customers (i.e., those that independently minimize their own expected costs) charges a price that also minimizes the expected total delay costs across all customers and that this outcome does not result when customers coordinate to submit priority orders at a level that seeks to minimize their aggregate costs of priority fees and delays. Thus, the customers are better off collectively (as is the supplier) when the supplier and customers act independently in their own best interests. Finally, as the number of priority classes increases, both the priority revenues and the overall customer delay costs improve, but at a decreasing rate.

Performance indicators for call centers with impatient customers

IIE Transactions, 2013

An important feature of call center modeling is the presence of impatient customers. In this paper, we consider single-skill call centers including customer abandonments. We study a number of different service level definitions, including all those used in practice, and show how to explicitly compute their performance measures. Based on data from different call centers, new models are defined that extend the common Erlang A model. We show that the new models fit reality very well.

Improving Service by Informing Customers About Anticipated Delays

Management Science, 1999

This paper studies alternative ways to manage a multi-server system such as a telephone call center. Three alternatives can be described succinctly by: (i) blocking, (ii) reneging and (iii) balking. The first alternative -blocking -is to have no provision for waiting. The second alternative is to allow waiting, but neither inform customers about anticipated delays nor provide state information to allow arriving customers to predict delays. The second alternative tends to yield higher server utilizations. The first alternative tends to reduce to the second, without the first-come firstserved service discipline, when customers can easily retry, as with automatic redialers in telephone access. The third alternative is to both allow waiting and inform customers about anticipated delays. The third alternative tends to cause balking when all servers are busy (abandonment upon arrival) instead of reneging (abandonment after waiting). Birth-and-death process models are proposed to describe the performance with each alternative. Algorithms are developed to compute the conditional distributions of the time to receive service and the time to renege given each outcome.