August 2008 Issue

When it comes to squeezing more costs out of hard-wired telephony systems, collection managers have few options. The technology has matured to a point that there is no room left for cost-cutting innovations.

Short of telephony carriers engaging in a price war, rare with competition keeping prices down for the most part, the fat has been trimmed out of operating costs for hardwired systems.

Granted, automated voice response units and predictive dialers can help agents work more efficiently, but they are expensive and have a return on investment of several years. Besides, most call centers installed these technologies years ago.

As a result, collection managers have little choice but to embrace new telephony technologies if they are intent on lowering the costs associated with their phone system.

Voice-over-Internet protocol (VoIP) technology fills the bill. VoIP-based phone systems were about half the price of a T1-based system two years ago and have dropped further since, according to VoIP experts. Just as enticing is that the technology can operate in a hybrid environment in which it connects to a hard-wired telephony system for calls placed outside the local network.

The advantage of VoIP over traditional T1 phone lines is that it enables the call center to integrate all inbound and outbound communications into its network of databases and computer servers via a local area network. That means inbound and outbound calls can be linked with customer relationship management (CRM), voice mail, e-mail, and customer account databases, thereby eliminating the barriers that create information silos.

Knocking down data silos makes it easier for managers to track campaign and agent performance data in real time, as well as feed more account information to agents in a timely manner that can help increase recoveries.

"VoIP brings a lot of phone network upgrades that tend to get overlooked such as increased flexibility in routing calls between multiple call centers and to agents that work remotely off-site, which can reduce staffing costs," says Drew Kraus, research vice president for Stamford, Conn.-based Gartner Inc.

Unlike consumer-based VoIP phone services such as Vonage, VoIP installed in the call center runs over a non-public network, thereby eliminating the security risks associated with transporting data over the public Internet.

Improving Response Rates

The payoff is that agents can receive account data simultaneously with a phone call, thus improving agent responsiveness when a contact is made and eradicating any pauses that give the debtor an opportunity to disconnect from the call. At the same time, all contacts can be automatically recorded and results of the contact made visible to collection manager, which raises the level of quality control.

"VoIP is a technology that not only provides instant audit trails, but that can boost agent productivity up to three times," says Jeff Dantzler, president of Comtronics Systems LLC, a Cle Elum, Wash.-based provider of PC-based collection software applications. "VoIP is a system controlled by software, not a hard-wired box."

Agents working off site can connect to the network through software and a handset that plugs into the USB port on their computer. "In the old PBX environment, T1 lines had to be run between each call center to connect them. It was a difficult and complex integration," says Dantzler. "VoIP removes those integration barriers."

The ability to route calls across multiple call center or agent locations during peak periods can improve agent productivity between 7% and 12%, according to Kraus. "That's a significant gain, considering staffing can represent between 60% and 75% of call center operating costs," adds Kraus.

Having a VoIP-based controlling mechanism for the call center can significantly reduce maintenance costs as well. In a hard-wired T1 environment, the phone carrier has to be contacted each time there is a technical issue or a new set of lines to be added.

Besides the cost of the service call, which can run as much as a $100 an hour according to industry experts, there is the time factor. Maintenance calls have to be scheduled in advance and sometimes technicians are not available for several days or longer. To collection managers, time is money.

With VoIP, maintenance can be handled by the call center's IT staff. "Most VoIP software is open sourced, which means the IT department can access the code and fix the problem," says Bruce D. Kaskey, founder and vice president of marketing for OrecX LLC, a Chicago-based provider of open source VoIP applications. "When IT can address the problem, call center managers don't have to wait for the phone carrier or hardware supplier to get back to them to schedule an appointment or reply to a service inquiry about to how to fix the problem or find out they have discovered a bug. That provides flexibility."

In essence, a VoIP-based phone system is a computer network that speaks the same coding language as the other applications in the call center, thus making integration and maintenance easier. Hard-wired phone systems are separate networks that require custom source code or middleware to enable integration with other applications, such as CRM. Middleware is software that grants interoperability between applications and hardware on the internal network. This includes Web servers, application servers and content management systems. The more middleware and custom coding used, the greater the risk that unforeseen problems may occur downstream in the network.

With VoIP, integration can be accomplished using XML (extensible markup language), a general purpose programming language that enables users to define elements for sharing structured data across different software platforms, which eliminates data silos and enables more information about the debtor to be fed to the agent in real-time.

"Unlike traditional telephony systems, which are a stand-alone switch, VoIP applications are just another part of the server that can communicate with any data source on the network," says Catherine Oliven, president of Chicago-based Cross Check Communications, a VoIP solution provider. "That makes them a lot easier to integrate with other applications."

The ease with which VoIP applications can be integrated into the call center's server makes it possible to feed agents more information about an incoming call, such as geolocating the origin of the call to see if it matches the debtor's current address.

Call centers can integrate Google Maps to geolocate a call and feed that information to the agent's switchboard on their computer. The system can capture inbound calls that have caller ID information blocked and cross reference it against a database of known debtors phone numbers to identify the caller and feed the account file to the agent in real-time. The system can even inform agents which outbound campaign generated the call, based on the phone number.

"The more information that can be put around a call, the more effectively managers and agents can make decision about how to handle the call," says Tristen Degenhardt, product line director, SwitchVox for Huntsville, Ala.-based Digium Inc., a provider of open source VoIP solutions. "More information makes it possible for agents to spend more time conducting business than searching for information."

The Digium switchboard provides routing features that help agents talking to a debtor route an incoming call to their extension to an agent that is free to handle it, regardless of their geolocation, by dragging the icon for the incoming call to the cue of the agent who is free.

Managers can use their switchboard to monitor agents with a mouse click and record and store agent conversions. VoIP systems also track the length of each call per agent, how many calls each agent handles and enable campaigns to be adjusted – as all data about the campaign is available to managers over their computer network. "VoIP allows for the creation of more intelligent phone networks," says Kraus.

Another advantage of VoIP is that it can be programmed to automatically record all calls. Users have the option of turning this feature on and off and using it on an agent-by-agent basis or for select campaigns. Having automatic call recording is a major benefit as more collection agencies and lenders are recording agent conversations with debtors to ensure compliance with the Fair Debt Credit Reporting Act and to monitor agent performance. Monitoring agent performance helps reduce the number of complaints received and provides a record of the call in question.

"Any collection manager, whether they work for an agency, a lender, utility, credit grantor, etc. needs to be recording calls for quality assurance," says Kaskey. "VoIP makes it easier and more cost effective to do it."

OrecX charges users $120 per agent per year to record calls. To compare, call recording services for traditional phone systems run $600 to $1,000 per month per agent. "That's a big difference in price and makes it more cost effective to add recording capabilities over a larger portion of the agent pool," adds Kaskey.

Along with lowering call recording costs, many VoIP systems are built on open source code. The advantage for users is a developer's community that pushes the envelope on application functionality. Enhancements made by developer communities are available as public domain software, which means that users can download the applications for free. The lone restriction is that any application downloaded through the developer community cannot be resold.

"Access to these kinds of enhancements are a big plus for small call centers with limited budgets that want to get the same kind of features and functionality used by larger competitors," says Digium's Degenhardt. "A lot of vendors will not market their products to small businesses because they can't afford them."

While access to developer communities can be beneficial, collection manager must be careful not to download applications created by one person. "If it's a mission critical application and that developer moves out of the community, that can be a real problem for ongoing support," says Kraus.

So too can developing source code in-house. "There is a certain level of expertise needed to take advantage of open source code," says Cross Check's Oliven.

Hence, supporting applications downloaded from developer communities depends on how much risk the end user is willing introduce to their business. "Some users prefer to go with name suppliers," says Gartner's Kraus.

Digium, which is a brand name vendor, supports open source development for Asterisk, a telephony engine and tool kit that has been downloaded millions of times.

Asterisk, which Digium builds into its controller boards, runs on a wide variety of operating systems including Linux, Mac OS X, OpenBSD, FreeBSD and Sun Solaris.
With predictions that sales of IP-based phone systems, which include VoIP, will over take those of hard-wired networks in the next few years, it is no longer a question of if call centers will be adopting VoIP applications, but when.

For collection managers eager to reduce operating costs, improve agent productivity, and eliminate technology silos that can hinder workflow, installing VoIP as a backbone call center technology makes more sense than ever.

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