CALL CENTER TECHNOLOGY

5/15/2020
SIMULATION: APPROACHES,
THREATS, AND POTENTIALS IN
EGYPT Question No# 13

Ahmed Seif Elnasr Fouad

ESLSCA BUSINESS SCHOOL
Under the supervision of Dr. Ashraf Elsafty
ABSTRACT

The use of stochastic simulations to manage call center processes, accurately organize call
center personnel and predict expected results is not a recent trend, stretching back to the early
twentieth century work of Erlang. Recently, however, several factors have conspired to increase
demand for simulation analysis of call centers.

• Rising call traffic sophistication, combined with the almost omnipresent use of skill-based
routing.

• Quick organizational transition due to increased merger and acquisition activity, market
uncertainty, contracting opportunities and various customer platforms to serve (inbound phone,
outbound phone, email, screen, chat).

• Simpler, quicker cloud computing, paired with advanced call center modeling software which
are now available for commercial use. We will include a summary of the call center simulation
models in this guide, outlining common inputs and data sources, modeling problems and main
model outputs. We'll also be providing a fascinating "real-world" example of successful use of
call center simulation in this process.

1 INTRODUCTION: “WHY CALL CENTERS?”

The trend from manufacturing to service within our economy is well documented. The explosion
of the call center industry was a notable facet of this transition towards services. Mehrotra
(1997) describes call centers as "Any organization whose primary activity is talking to customers
or prospects over the telephone." In this article, we will refer to the people who speak to
consumers on the phone as "workers." Although it is impossible to reliably assess the scale of
the market, a plethora of figures from different outlets reflect the reality that this is an immense
and increasing global industry. Especially stunning: Mandelbaum (2001) references a report that
operates in this field at an estimated 3 percent of the United States population. Most recent: an
increase in outsourced call centers arising in India, the Philippines, the Caribbean, and Latin
America, servicing U.S. and Western Europe 's overseas clients as well as increasing domestic
business needs. Call centers are important from a statistical viewpoint for a number of reasons:
Call centers usually handle more than one type of call, with each distinct call type referred to as
a "queue" (as discussed below, this usage is not compatible with our standard queue definition).
In the span of time incoming calls within each queue come at random. Agents make outbound
calls to clients in other locations, either proactively (typically for telemarketing or processing
activities) or as a follow-up to prior inbound calls. -- call is of a random length, as is the job (data
analysis, reporting, study, etc.) that agents are expected to do once the call is complete.
Inbound calls can be redirected to members, organizations, and/or places via Automated Call
Delivery ("ACD") and Electronic Telephony Interface ("CTI") de-vices, with developments in this
routing technology enabling increasingly more complex logic over time. Individual agents should
be eligible to deal with one form of call, various types of calls, or both types of calls, with various
routing logic priorities and preferences. And call centers can be viewed as stochastic systems
with multiple queues and various types of customers. There are major problems involved with
running these processes successfully which we address below. To sum up, call centers are of
concern due both to the sheer scale of the industry, both in the United States and overseas, and
to the organizational and technical difficulty involved with these operations; This makes it
impossible for policy makers to understand the complexities of the environment without
successful modeling. The rest of this tutorial is organized accordingly. In Section 2, we are
inspiring simulation's need and interest in the sense of efficient management of call centers. In
Title 3, We explore how call centers use simulation software, with an emphasis on main
production measurements used for device success assessment. Section 4 offers a modeling
context for call center simulation, which addresses the key inputs associated with simulation
models, presenting the principles into simulation model formulation. We address strategic
decisions relevant to this model in Section 5, and explain some of the findings of our research.
Finally, we propose probable future directions for simulating call centers in Section 6. Note: We
will use the word "call center" in this article, and concentrate our conversation on centers that
only handle phone calls (either inbound, outbound, or both). Some other common term in this
industry is "service center," which refers to centers that manage not only phone calls but other
types of customer communications like email, fax, document and/or chat sessions. For
consistency of access we have opted to concentrate on call centers here. However, extending
the concepts discussed here from telephone-only call centers to multiple channels customer
support is a simple expansion which we too have thoroughly engaged in.

2 CONTACT-CENTER MANAGEMENT CHALLENGES AND THE NEED FOR MODELS

Those in charge of the operation of call centers face a very challenging range of problems. At a
high level, as seen in Figure 1 below, they must strike a balance between three important
conflicting interests.

Figure 1: The call center management balancing act

Such executives and managers must (implicitly or explicitly) answer a variety of crucial
questions, for which decision support models are useful, on a regular basis while maintaining
prices, service efficiency and employee satisfaction at the same time:

How many officers do we have and what different expertise on staff? How should we schedule
shifts, breaks, lunches, workouts, meetings and other activities for these agents?

How many calls are we planning of this type at which time?

How soon should we have to respond to some form of incoming call?

How should we train our agents across borders? How should we make the best use of those
resources by routing our calls?

How well will our system perform, given a forecast, a routing design and an agent schedule?

What is our collective capacity? What effect does an increase in call volumes have on our overall
performance?

Why should we do our Center right now? What has changed from our last forecast and our
timetables were published? If the changes are big, what can I do to mitigate the effect on the
remainder of the day or week?

There are a number of statistical approaches (see Gross man et al. 2001 and Mandelbaum 2001
for further explanation of this) and related tools to support call center staff as they seek to
answer these types of issues, most commonly task modeling models focused on time series and
agent scheduling ideal choice. However, modeling has evolved over the last few years to play a
major role in the architecture and management field of call centers.

3 HOW CALL CENTERS USE SIMULATION

Inside the telecommunication industry there are three key approaches to use simulation: 1.
Standard Simulation Analysis: A simulation model is developed to simulate a complex process
with inputs from a number of data sources as described in Section 4 below. 2. Embedded
program-routing ACD / CTI: Several of the leading ACD and CTI implementations provide a
routing simulation to provide routing architecture engineers insight into the effects of different
decisions. 3. Embedded program-agent scheduling: A dynamic routing problem already (For a
more detailed explanation, see Andrews and Parsons 1989), optimal scheduling of call centers
becomes much more complicated as all calls and agents are inhomogeneous.

Multiple commercial forecasting software applications make use of simulation as part of their
overall optimization system, including the one produced by the authors' group. In both of these
cases the main performance measurements usually contain the following parameters, any or all:

• Queue Statistics: The two dominant queue statistics for inbound queues and call centers are
Average Response Speed ('ASA') and Percentage of Calls Answered with a queue period of less
than that given value ('PCA' or, more generally, 'Service Level'). Notice that this figure is
important for each queue at the interval level (typically 15 minutes, 30 minutes, or one hour) as
well as at the aggregate daily and weekly levels; in fact, management is interested in the
average output across a set of queues that rely on a specific pool of agent capital.

• Abandonment Statistics: For most inbound service centers, especially those focused on
customer service and/or sales, a lot of attention is paid to the overall number of customers who
leave (i.e. hang up and leave the queue before serving). It is known to be an important customer
satisfaction indicator (see Feinberg et al. 2000 for a recent published study on this). Most
centers would look for more stringent metric of customers falling below the target level of
service threshold, based on the justification that a certain waiting period in queue (as described
by the Service Level threshold, varying from 5 seconds to many minutes across firms and
businesses) is inevitable.

Volume Statistics: The actual statistic of concern for outbound queues and call centers is Right
Party Connects ("RPCs"). That is, what percentage of such calls hit the target person (as opposed
to no response, answering machine, or any other human being) with all of the preliminary calls
that were made. Outbound contact center administrators usually have both an actual and a
percentage stake in RPC.

The Calls Treated metric is of concern for inbound queues, and is conveniently obtained by
subtracting Dropped Calls from the total number of received calls (known as "Offered Calls").

4 CALL CENTER SIMULATION MODELLING

4.1 Framework

Defining and organizing model inputs is the biggest challenge of call center simulation modeling.
Figure 2 below illustrates our model definition and key inputs of call center simulation
framework.

Figure 2: Call Center simulation modeling framework

As shown in Figure 2, models for call center simulation feature a wide variety of inputs from
various data sources, and as in all simulation projects, the amount of information to be used in
the model must be determined. Those primary feedback areas are addressed in more detail in
the sections below. We will use our model illustration to explain these modeling principles in the
process.

2 Key Inputs: Queue Definitions, time frame and Routing Logic Calls, agents and the time frame
during which the call center is opened are the basic building blocks of a call center simulation
model. The basic logic of routing in turn connects the way the calls interact with the people
during that time period. Typical contact center simulation tools involve more than one queue (as
single queue models are usually analytically dealt with) and run over a span of one day, one
week, or multiple weeks. Our sample layout is for a call center for Collections. This activity is
characteristic of call centers and is part of a wider market background in which creditors'
accounts are routinely tracked.

Whenever a customer falls into recidivism, there are several things that happen: (a) the account
information is added to a list of prospects for an outbound call to collections; (b) they are
notified by mail of their credit status; and (c) additional limitations may be placed in the
account. There are two queues in the call center itself: An Inbound queue and an Outbound
queue. The timeframe we use for the analysis is a week. Figure 3 demonstrates the two agent
classes, and the simple routing rationale. Calls will arrive from the Inbound queue and would be
served by Group # 1 handler, the incoming-Only group. When no agent is present from that
party, the calls must wait in queue. If the incoming call has not yet been completed after any
predefined amount of time, this will also queue to a Category # 2 handler, the bridge-Trained
Outbound category.

Figure 3: Queues, agents groups, and routing logic for example model
In the meantime, agents from Group # 2 and Group # 3 will be logged into a Predictive Dialer,
which places outbound calls from a list to prospects. When the Predictive Dialer detects an
answer, the call is automatically assigned to one of the Outbound Specialists or to one of the
available bridge-Trained Outbound agents. The representative then engages in a conversation of
collections (whether they have reached the Correct Party) or leave a note (if they have found an
answering machine or other group on the same phone number). Such messages will produce
several calls to the Inbound Queue along with mailings to delinquent customers.

4.3 Key Inputs: Call Forecasts

Usually call predictions are powered by a mixture of historical evidence, model time series, and
expert judgement. Two primary categories of call forecasts exist: call volumes and estimated
handling time. Both are required for any simulation of the basic call center. Because of the
experience of telecommunications and call center industries using steady state M / M / n queue
calculations to calculate the number of agents required for each time period, it was common to
transform the call volume forecast for Poisson arrivals and AHT forecasts for Exponential
response times into μvalues. Much work has been carried out on call volume prediction model,
and the interested reader will be directed back to Mabert (1985) and Andrews and Cunningham
(1995) for useful discussions on this topic. For any time, interval in the simulation cycle,
forecasts shall be generated for each queue.

The most popular method to call center forecasting is to establish weighted averages of
historical data over the course of a week for particular time intervals. For example, for 8:15 a.m.
the initial call volume forecast -- 8:30 hours. Next Tuesday could be calculated as 8:15 am
average call volume. -- 8:30 hours. Period A few Tuesdays past. From here, improvements will
be (or can be! more commonly!) made based on new details (e.g. unique promotion practices
for a distribution center or evolving product problems for a technical service center) that can
cause volume to vary significantly from previous trends.

4.3.1 Average Handle Time Forecasts

Most call center models, as mentioned earlier, assume that call handling times are distributed
exponentially. Whenever practicable, we would consider using more reliable distributional in-
information about call handling times. For example, technical support call centers are commonly
found for which call handling times are bi-modal (easy cases with a shorter mean, harder cases
with a longer one). The primary explanation, however, that the service sector supports the
concept of exponential handling times is that the ACD and CTI instruments (the main component
for historical call volume data) only store average handling times at interval. With a dearth of
reliable second-moment knowledge available, we have thus embraced this assertion even more
frequently than we would like; in particular, we have modeled exponential handling times in the
numerical model provided in Section 5. Note: We refer to Average Time of Handling, or AHT, in
this paper. However, it is not unusual to consider two fields when extracting data from ACD
records that are then added up together to measure AHT: Total Talk Time ("ATT") and After Call
Job ("ACW").

4.4 Key Inputs: Agent Schedules

You can think of agent schedules as a sequence of activities that take place over a day. For
instance, an agent who gets to work for a nine-hour shift at 8:00 am may have a 15-minute
break at 9:45 a.m., lunch at 11:30 a.m., an online training course from 1:00 a.m. to 2:00 p.m.,
and a break at 3:15 p.m. before leaving the office at 5:00 p.m. From the simulation viewpoint,
each agent is used as a tool for other forms of work to be done. Notice that in the sense of the
call center, agents are generally active only during the time at which the agents are assigned to
answer phone calls efficiently. Moreover, modeling agents as finishing the mission they are
involved in is traditional, even though it stretches beyond the time they are to turn tasks. This is,
an agent would be represented inside our simulation as finishing the phone call he is working on
before going for a break or lunch. A typical step in the simulation of call centers is to transform a
series of individual agent schedules into a resource matrix, where the matrix dimensions are
specified by the number of agent classes and the number of Time Intervals. In our example, we
took advantage of the fact that our schedules are at a granularity level of 15 minutes, and thus
we converted these schedules into a number of on-phone agents for each group for every 15-
minute interval before conducting the test.

4.5 Key Inputs: Abandonment Model and Parameters

Abandonment remains one of the most intensely discussed issues in the administration and
study of call centers. There are two basic questions that need to be addressed to model
customer abandonment behavior effectively:

1. What is the tolerance of the customer to wait, and at what point will this customer hang up
and leave the queue thereby?

2. How likely is the customer to call back, and after how long?

Many researchers (e.g. Hoffman and Harris 1986, Andrews and Parsons 1993) looked at the task
of modeling these issues from both an empirical and theoretical viewpoint.

Such questions are hard to interpret from our experience not only because of the queue
dynamics' mathematical sophistication, but also because of a lack of measurable data on
consumer abandonment and retrial. Although several surveys were conducted, we found
significant variations in consumer behavior across various sectors and operations of different
companies. Additionally, details provided to callers about estimated waiting time and/or queue
location can have a marked effect on abandonment behavior.

Simulated clients arrive at the call center in our example model and are served by an agent if
there is one available. If not, they join the queue to which point a "life span" drawn from an
exponential distribution is also as-signed. If the life cycle of a customer ends when still waiting in
line, they must then leave the line. That is, we stand for the ability of customers to wait in queue
as an exponential random variable (as proposed by Garnett et al. 2002). We refer to "the
patience factor" as the mean of this distribution.

In view of this modeling choice, we still have to face the challenge of selecting the patience
factor that we estimate from historical data on the time in queue for callers. In the example
model we do not include caller retrials.

4.6 Key Inputs: Agent Skills

Our "Agent Skills" definition consists of three major input types for each agent or group of
agents:

1. What are the calls the agent can handle?

2. Provided a option of several waiting calls, which will be done by the agent ("call priority")

3. How quick will the agent be able to manage will call form and how often will the agent
successfully overcome the issue ("call skill") When combined with routing logic and request
forecasts, these attributes completely define the model to be simulated in the queuing.

We have three distinct groups of agents in our example, each with different competences:

• Team of agents # 1 (Inbound Only) perform only First-Come-First-Served incoming calls. These
agents have a calling ability of 1.0 for Inbound Calls, so their AHT is equal to the AHT for Inbound
Calls forecasted.

• Team of agents # 3 (Outbound Specialists) only manages outbound calls. Such agents have a
calling capacity of 1.0 for outbound calls, which means their AHT is equal to the outbound calls
AHT forecast.

• Group of agents # 2 (Cross-Trained Outbound) handles Inbound and Outbound calls. Such
agents have a calling capacity of 1.0 for outbound calls, which means their AHT is equal to the
outbound calls AHT forecast. Nevertheless, these agents will give preference to Inbound Callers
if there is any waiting in line and have 2.0 calling skills for Inbound calls, illustrating the inherent
inefficiency of cross-training (see Pinker and Shumsky 2000 for further explanation of this trend
both in and out of the contact center).

4.7 Other Modeling Considerations

4.7.1 Shrinkage

It is well known that a considerable amount of agent time will be wasted either in large blocks
(unanticipated shift cancellations, part day absences for personal reasons) or in limited blocks
(late visits to the call center, extra-long breaks, journeys to the bathroom). There is a major
difference between two different forms of time spent by an agent. In the one hand, agent time
which is understood to be wasted before a schedule is generated and released basically has little
other effect on the simulation model beyond the fact that this particular agent is not included in
the schedule.

In the other hand, planned time that is not employed, either due to unforeseen absences or due
to lack of strict attention to agent schedules, is time that can be taken into consideration in
simulation if this is an established trend (e.g. higher absenteeism in Mondays). It is regarded as
"shrink-age" in the telecommunication industry and is a major marketing concern as well as a
major modeling challenge.

Most service companies have large shrinkage rates – we've seen multiple locations overall of
more than 30 per cent. In our example model, we used a 10 per cent shrinkage point.

4.7.2 Additional Detail for Outbound Queues

The workflow associated with Outbound calls is quite different from the Inbound queue logic. At
heart, this modeling difference stems from the fact that inbound calls are characterized by a
random pattern of arrival; on the other hand, the outbound dialing pattern can be planned but
each call has a random outcome (right party connection, wrong party connection, no response).

Moreover, as stated in Section 3 above, the efficiency metrics associated with Outbound queues
are somewhat different (total RPCs obtained, rather than the figures of queues and
abandonment usually used to measure Inbound queues). To predict the number and pattern of
RPCs effectively, simulation models need knowledge about the probability that a given dial can
obtain an RPC, which usually varies by time of day, as well as the AHT associated with an RPC.

To model a deeper level, one might possibly consider reflecting the predictive dialer's thorough
logic (see Samuelson 1999 for more on predictive dialer logic). However, this level of specificity
was not appropriate for the types of business decisions that our example model presented, and
so we did not have comprehensive dialer reasoning within it.

5 EXAMPLES: ROUTING STRATEGIES FOR A COLLECTIONS CALL CENTER

5.1 Operational Problem and Business Decisions

We have described parts of the simulation model associated to this example throughout Section
4. The call center of interest is illustrated in Figure 3, and the formulation was motivated by
discussions about optimal system design with several blended inbound-outbound centers.

In our case, the call center is open from 7:00 am to 6:00 pm Monday-Fri-day. There will be 50
Inbound Agents (Group # 1) and 150 Outbound Agents in total (Group # 2 and Group # 3). As set
inputs for this simulation model, we consider agent schedules for each of the three agent
classes as well as call estimates (a minimum of around 20,000 weekly calls) for the Inbound
Calls. Therefore, we believe that there is an essentially infinite number of consumers who can
make Outbound calls. The operational problem facing this call center management is centered
around call routing and agent skills. The classical tension between specialization and cost
underlies this problem.
In terms of expertise, Inbound agents are far more efficient than Outbound agents in managing
Inbound calls, while Inbound calls interrupt the flow and efficacy of Outbound agents; for both
reasons, it would be much easier to provide specialist agents for Inbound and Outbound calls
respectively.

As far as costs are involved, there is a management goal of managing 80 percent of Inbound
calls within 60 seconds for each day period. This translates into a greater amount of needed
Inbound agents with committed agents than are currently available. Consequently, existing
staffing levels may result in longer than ideal turnaround periods, which in turn is associated
with higher dropout rates.

The corporate decisions to be discussed directly shall be as follows:

• Of the 150 professional outbound officers, how many will be allowed to treat Inbound Calls
and be included in the Cross-Trained Outbound group?

• If no Inbound Agents are available, how easily will the Cross-Trained Outbound party be given
an Inbound Call?

In a perfect universe, these problems should be resolved empirically "rightly," a mathematically

optimal solution that could be calculated through continuous simulation runs.

In reality, however, these decisions usually entail significant trade-offs which are hard to weigh
in relation to each other, and the role of simulation is to measure the effect of numerous
potential decisions.

For such simulations the main performance metrics are:

1. Levels of phone service (percentage of inbound calls handled within 60 seconds).

2. Levels of Abandonment (percentage of Inbound callers hanging up before service is received).

3. Right Party Connects (total number of outbound calls made to the correct people).

4. Number of overflows (from Inbound calls to group Cross-Trained Outbound).

5.2 Numerical Results

5.2.1 Determining the Number of Replications

We ran several simulation model replications and calculated predictions for success
measurements based on the average run duration for each of the individual scenarios that are
addressed be-low.

To determine the number of runs for each scenario, we focused as the statistic of interest on
average weekly service level for the Inbound queue. After each run, we would examine this
statistic 's overall standard deviation across all runs up to now. We continued running alternate
iterations until this general standard deviation was below 2.5 percent, which we set as our
confidence level arbitrarily.
5.2.2 Base Case

Our problem by simply is one without Cross-Trained Outbound agents. This base case is listed in
Table 1 below, as Scenario 1.

Table 1: Results for Base Case Analysis and Original Cross Practice Scenarios

It was obvious from this base case that the Inbound Agent Category alone cannot produce the
optimal Service Level (80 percent within 60 seconds), and that the Abandonment Rate is also far
higher than expected.

5.2.3 Varying Cross-Training Levels

We then started to vary the number of Outbound-Skilled Agents included in the Cross-Trained
Outbound category, thinking that Inbound calls would automatically overflow to Cross-Trained
Outbound Agents any time all Inbound Only Agents were occupied. The impact of this cross-
training on the Inbound caller population is dramatic, as even limited cross-training has a major
impact on the level of service and abandonment. Additionally, this cross-training has an equally
obvious negative impact on the outbound call statistics. Such trade-offs are noticeable in below
in Table 2.

Based on these preliminary calculations, a minimum of 30-40 Outbound Agents were selected to
concentrate on cross-training. From here, we turned our attention to parameter specifying how
long Inbound calls would wait before being available to Cross-Trained Outbound agents.

5.2.4 Varying the Wait Time Parameter for Overflowing Inbound Calls

Tables 2 and 3 demonstrate outcomes for different situations relevant to 30 and 40 Cross-
Trained Outbound officers.
5.2.5 Summary

The various scenarios we simulated allowed us to (a) hone in at the right cross-training levels to
achieve the Service Level targets with the existing staffing levels, and (b) explore trade-offs
between specific scenarios in terms of main model outputs.

Consider, for example, scenarios 3, 10, 14, and 15 both delivering SLs at or above the target of
80 per cent. Of course, the answer to which of these is the "best" choice will depend on the
relative value of RPCs, Service Levels and Abandoned Clients. It is important to note, though,
that Scenario 3 yields approximately the same SL and RPC values as Scenarios 10 and 15-but
with a slightly higher rate of abandonment. The tangible difference between Scenario 14 and 15,
in turn, allows managers to explicitly quantify the level of increased service level and lower
abandonment rates compared to the reduced number of RPCs.

Finally, it is worth noting that while we have seen preliminary statistics for seventeen examples
here, it is fairly straightforward for us to generate more comprehensive statistics and also to
analyze some variety of other situations by varying various criteria. This flexibility, in turn,
enables managers and analysts to develop a sense for system dynamics and also to proactively
answer common senior management questions such as “what would a 10% increase in call
volume next week due to us?” or “what is the value of adding an out source to help us during
our peak months?”
6 WHAT THE FUTURE HOLDS FOR CALL CENTER SIMULATION

Looking ahead, we see two major trends affecting call center simulation. First of all, operational
complexity will keep growing: more queues, more different officer schedules, more varying skill
combinations and routing rules. Looking ahead, we see two major trends affecting call center
simulation. Firstly, organizational sophistication will begin to grow: more lines, more agent
schedules, more varied combinations of skills and rules for routing. Although in the very
simplistic numerical example above it is easy to see how the sheer quantity of numbers that
simulation can generate will overpower us.

We also anticipate an intensified need to consider the risks involved in any given organizational
arrangement as executives continue to recognize that the call center is a core component of
their consumer service de-livery chain. In particular, we see important and substantial potential
for randomizing not only call arrival trends and handling times but also average call volumes,
and using risk analysis and computational modeling methods along with simulations to measure
network capability and execution risks.

Lastly, we hope for and anticipate changes in the consistency of the data for quantitative
research received. In particular, improved precision and information associated with time
distributions processing, time distributions waiting, and time discontinuance distributions would
result in better model inputs and more reliable performance.

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