Industry survey: delays in rolling out new contact centre technologies cause project costs to double
Empirix-sponsored research finds that project overruns add 90 per cent in cost on average; bad project practice and lack of testing can quadruple additional project costs
Berkshire, UK – September 21: When contact centre technology projects are delayed, the impact on costs and on business overall is dramatic – and largely ignored by UK contact centres – according to a new survey conducted by the Customer Experience Foundation (CEF).
The survey was commissioned by Empirix, the leading provider of service quality assurance solutions for contact centres and new IP communications. It shows that project delays when rolling out new technologies were found to typically add over seven months of additional project time and an extra 90 per cent on top of the original budget. The survey also revealed that poor project practice can as much as quadruple additional costs, as compared with contact centres that apply best practices in their management of technology roll-outs.
Testing was singled out as a critical but widely underestimated element of good project practice. The study revealed an inverse relationship between companies’ investment in contact centre testing and budget overruns when updating or rolling out new technologies. This finding suggests that establishing thorough testing procedures can help avoid delays and costs associated with technology failures.
Tracking project costs was another stumbling block. Over three-quarters of respondents confessed to either not tracking project costs or only tracking ‘some’. And while most believed that roll-out delays had a negative impact on customer interactions, none of the companies tracked exactly how the day-to-day running of their contact centres had been affected.
The research was conducted among business, technical and project management staff at more than 100 private sector companies who had experience with contact centre technology projects worth over £500,000.
Survey respondents estimated that, on average, between a quarter and a third of technology projects – such as installing new Interactive Voice Response (IVR) or automatic call distribution (ACD) systems – get delayed.
“It is difficult to comprehend how these huge cost overruns and delays happen in at least 25% of these types of projects,” commented Professor Morris Pentel, founder and chairman of the CEF. “We believe this is the first time anyone has shown what a massive problem the industry has here. The study also makes it clear that the impact of delays is not only financial, but also affects the customer experience of the contact centre and the brand behind it.”
Trevor Richer, contact centre marketing manager, Empirix said, “It is clear that building testing into the project plan shows attention to detail and a type of organisational commitment that will minimise delays and budget overruns, and avoid the project descending into ‘fire-fighting’.”
Research highlights
» Project overruns add 90% in cost on average
Overruns in delayed projects to refresh and update contact centre technology, introduce new services or build new contact centres lead to an average increase of 7.1 months in time and 90% in project costs.
For a typical £1million project this means the average total spend will be £1.9million. Most of the additional cost was due to having to use project resources for a longer period of time, involving senior management to resolve problems and hiring outside experts to diagnose and solve problems.
» Good project practice pays off
The survey identified some of the classic mistakes companies make when rolling out new technologies. These include a lack of thorough testing, project reviews and senior executive sponsorship of the projects in question.
The impact of overruns was considerably less for companies that avoided these errors and applied best practice in their project management. These companies still incurred 30% extra costs (£300,000 for a £1million project) and 3.6 months in extra time.
For companies that fell into the above traps, delays and additional costs were four times as high as for their ‘best practice’ counterparts: that is, 14.3 months and £1,150,000 – more than double the original budget.
» Hidden causes of delay
Stakeholder issues, poor planning, a lack of focus from senior management, lack of resources and supplier issues were the highest ranked reasons for delays. While only a fifth of respondents (20.7%) originally mentioned lack of testing, in-depth interviews subsequently revealed that testing was a much bigger issue.
Factors such as late supplier deliveries, system conflicts and network issues were all linked to a lack in testing capabilities. Poor testing also affected project plans and resources, because delays meant that resources were reassigned and unavailable when needed.
» Test, test and test again to save time and money
There was a clear inverse relationship between companies’ investment in contact centre testing and budget overruns. Companies who spent more on testing spent less on delays. Those companies with annual testing budgets of less than £50,000 faced the biggest overspend: 115% in extra cost and 124% in additional time. The lowest impact was felt by companies whose testing budgets were between £1 million and £3 million (30% extra cost; 31% additional time).
» Business impact of delays
Most respondents agreed that technology project delays had affected their customer interactions to a large extent. Nearly one-third of respondents cited service failure rates of over 50%. At the same time, respondents were fully aware that delays could have a negative impact on sales opportunities, business reputation and customer experience, which were highlighted by nearly one-quarter of those surveyed. Nevertheless, none of the companies tracked these indirect business impacts stringently.
For more information about the survey please contact:
Trevor Richer, Empirix on +44 (0) 7961 712502 or tricher@empirix.comProf. Morris Pentel, Customer Experience Foundation on +44 (0) 7947 259818 or mp@customerexperiencefoundation.org.
For a copy of a whitepaper covering these survey results – called The Hidden Cost of Technology Failure in the Contact Centre – visit Empirix at Call Centre Expo, stand C11, or request one online now at: www.empirix.com/technologyfailure.
About the Customer Experience Foundation
CEF is the academic arm of Customer Experience Services Ltd and provides thought leadership and business science services to a number of partners including Silent Edge, Nemesysco and New Voice Media. The Foundation provides research programmes to establish information that supports the development of ROI business cases. It also offers tools that support the business case in the sales environment and provide intellectual capital to support the use of these tools.
The business and foundation is headed by Professor Morris Pentel BA (Hons) MBA DBA who is also the Head of the Institute of Contact Sciences and the Contact Foundation. For further information visit: www.customerexperiencefoundation.org.
About Empirix
Empirix is the leading provider of service quality assurance solutions for new IP communications. Since 1992, Empirix has led the market in innovation and expertise for IP communications management. Its widely acclaimed Hammer Test Engine™, with more than 30 patents, is the acknowledged global standard for validating the quality of IP networks, systems and applications. The world’s largest wireless and wireline operators, equipment manufacturers, and enterprise contact centres depend on Empirix’s solutions to maintain the quality of the user experience for business-critical voice, data, video and mobile services. With Empirix, customers can increase revenues, reduce customer churn and cut support costs. Empirix is privately held and headquartered in Bedford, MA. For further information, please visit www.empirix.com
