The Price of Spending Less: Building a CCaaS Business Case, Part 2

Last week, we discussed how CCaaS can help CX leaders answer the perennial mandate to do more with less — and where to get started with building a successful business case when the time comes to prove your worth. 

We know we need to be ready to do our homework and present multiple options. We know that quantifying the expected ROI is everything, that our CEO and CFO will be looking straight at the bottom-line numbers, and that if those numbers look enticing, we’d better be ready to back them up. But we also know that things are often easier said than done.

So as promised, we’ll be continuing this week with a more detailed look into how to conduct a thorough cost-benefit analysis and, ultimately, build a compelling CCaaS business case.

Promotion for Customer Experience in the Cloud live stream with Valur Svansson

Amassing an argument for change

When you make a business case, you’re making an argument. Every sound argument needs a thesis. So be sure to have a crystal-clear conception of what it is you’re trying to prove, and make sure that every slide, every stat and every bullet point you prepare is laser-focused on doing exactly that.

The case for CCaaS tends to boil down to something like this: The only way we can make our budget is to lower our cost per contact, and the only way we can do that is through CCaaS. 

  • We need to do more for less — The business expects contact centers to contribute to percent profit growth. That requires reducing expenses while increasing the volume of customer interactions. 
  • Labor is the biggest cost — As we discussed in last week’s live stream, the #1 expense in contact centers is still labor, typically making up 70 to 80 percent of the budget. Maximizing efficiency and minimizing labor costs is paramount. 
  • CCaaS will improve cost per contact — Right out of the box, CCaaS moves the needle where it matters most: serving more customers with fewer agents. From AI-powered chat, self-service tools and optimized routing, to video capabilities and more seamless channel integration, it allows for shorter and fewer interactions, improved first call resolution (FCR), and a more efficient channel mix and customer experience.

Of course, the good folks over in the finance department probably aren’t going to take these points for granted. You need to have the facts and figures to corroborate them every step of the way. You’ll need to put together a detailed view of your existing operational demands, costs and outcomes. You’ll need to understand how your existing technology plugs into all those processes, and where CCaaS solutions will make the most formidable impact.

Starting with the big picture

With so much to dig into, it’s often hard to know where to start. Keep it simple. Once you nail down your contact center’s cost per contact, everything else tends to fall into place. 

Understand cost per contact

Your cost per contact is a basic ratio of your total costs versus total interaction volume. To begin with, ask for two or three months of call volume data. Most of the time, you should be able to find everything you need in the performance reports that you send to your VP or COO. Then pull your cost figures — what you’re paying, fully loaded, to your agents, team leaders and managers, as well as facilities and existing tech costs. 

Divide your total costs by total number of interactions, and voila! That’s your cost per contact.

Graph showing approximate cost per contact across multiple channels
Source: Contact Babel

Understand CX realities

Calculating cost per contact is highly objective and quantitative, but there are other big picture considerations that are more subjective and qualitative. What are the customers experiencing as they go through the process of reaching out, dealing with your agents and systems, and then after the interaction is over? What’s the channel mix? What are the customer’s channel preferences? Where are the gaps and pain points?

As you flesh out your understanding, you should then break it all down depending on the interaction type. Track details such as call reasons, root causes and FCR rates, and categorize them by call type and channel. Which types of interactions would be good to automate? Which to simplify? Which to eliminate entirely?

By digging deep and documenting what’s really going on, you’ll be primed to identify meaningful opportunities where technology can boost efficiency and add value.

Conducting a CCaaS cost-benefit analysis

Once you have a comprehensive view of your contact center’s call volumes, operational costs and CX demands, you’re ready to zero in on how technology fits into the picture. The process should look something like this:

  1. Inventory your existing contact center technology capabilities and identify gaps
  2. Assess and prioritize potential opportunities 
  3. Identify desired business outcomes for new solutions

Audit technology and analyze gaps

Map out both your existing contact center software capabilities and those of potential CCaaS tools against your current business processes and customer interaction flows. For example:

Chart showing a technology and process gap analysis for a contact center

In this example, “input” refers to the initial reaching out phase of the interaction, “process” to the phase where the customer is actually engaged with an agent or self-service element, and “output” to the post-interaction and measurement phase. Mature capabilities are in green, developing or partial capabilities in yellow and completely lacking capabilities in red. 

Assess opportunities

Based on your earlier accounting of interaction volume and quality by channel and issue type, identify which areas are likely to have the most significant impact on minimizing cost per contact. For instance, if your channel mix leans heavily toward voice calls, you might prioritize features like conversational AI and self-service. If your FCR is poor, you might invest in automated agent coaching and interchannel integration.

Define and quantify desired business outcomes

Once you’ve identified and prioritized the feature gaps most relevant to your business, you should document how (and how much) you expect solutions to move the needle. For example:

Chart showing how much certain technology solutions will impact business outcomes

Be sure to take into account all the various ways you’ll be able to shift your channel mix, reduce contact duration, maximize FCR and so on. Analyze how those changes will reduce the total volume of interactions your agents will need to handle, and then, with those revised volume numbers, you can calculate how much you’ll be able to lower your cost per contact.

Putting it all together

Now that you’ve assessed, prioritized and quantified the expected business benefits of your shiny new CCaaS solution, compare them with your existing cost per contact figures to derive a solid estimate of expected ROI.

Spreadsheet calculating the benefits of a contact center solution

In the above example, we see that CCaaS subscription fees would increase the monthly technology cost per agent — relative to the costs associated with maintaining the customer’s existing on-premise contact center solution — from €45 per month to €55 for the recommended CCaaS initiative or €90 for the premium solution. However, this increase is more than offset by the benefits of being able to handle more interactions with fewer agents, thanks to improved contact deflection, duration and elimination. 

As a result, the CCaaS options would ultimately provide a 10 to 37 percent reduction in cost per contact. And remember, when it comes to CCaaS business cases, cost per contact is where the buck stops.

The 3 key takeaways

We’ve laid out how to build a compelling business case and provided a few examples of how to back it all up — by auditing technology and process gaps, assessing opportunities and quantifying how CCaaS can lower your cost per contact.

Here’s a refresher on where to head from here in making your pitch:

  1. Know your ROI
  2. Invest in the research
  3. Present multiple options

Of course, this truly is just the tip of the iceberg. Every business is different, and for complex systems like enterprise-scale contact centers, even small differences can result in wildly disparate outcomes. If you’re looking to understand how to build a strong CCaaS business case that’s suited to your organization’s current contact volumes, cost structures and unique requirements, we’d love to hear from you.

For more insights on this topic, watch the full LinkedIn live stream episode, “How to Build a CCaaS Business Case, Part 2: How Much Does it Cost to Spend Less?”

And for discussion of similar topics, tune in for the “Customer Experience in the Cloud” live stream series with Valur Svansson, every Wednesday at 9:30 a.m. CT on the Lifesize LinkedIn page. To watch past episodes on-demand, visit our YouTube channel.