Performance management in call centers:
lessons, pitfalls and achievements in
Fujitsu Services
Bernard Marr and Stephen Parry
Bernard Marr is research fellow
in the Centre for Business
Performance at Cran®eld School
of Management and visiting
professor at the University of
Basilicata, Italy. Bernard's
research and consulting work
focuses on organizational
performance management, with
an emphasis on the strategic
management of intangible value
drivers. He can be contacted at
bernard.marr@cran®eld.ac.uk
Until recently Stephen Parry was
Head of Strategy and Change at
Fujitsu Services. As the architect
and developer of the Sense and
Respond approach he was
instrumental in leading the
initiative across many Fujitsu
operations in Europe and Asia
Paci®c. Stephen is now the
managing director of his own
consulting ®rm specializing in
organizational transformation and
customer service strategies.
Stephen can be contacted at
sgparry@aol.com
Summary This paper provides an overview of Fujitsu's sense and response approach towards
performance management. It is demonstrated using a case example of call center performance
as part of Fujitsu Services. Call centers (or contact centers) are often used as case examples of
how not to measure and manage performance. An operational bias towards ef®ciency measures
often fails to provide the customer focus needed and even has dysfunctional consequences.
This case study demonstrates how Fujitsu moved away from the ef®ciency trap, and completely
redesigned their performance management system to focus on their customer needs and the
intangible drives of value creation. It will highlight the lessons learned, the pitfalls as well as the
achievements.
Keywords Performance measurement (quality), Call centres, Performance management,
Customer satisfaction
1. Introduction
Call centers are an integral part of most industries today. They play an essential role in
today's business world, and are often the primary source of contact for customers (Miciak and
Desmarais, 2001). The call center industry has experienced incredible growth on both sides
of the Atlantic, which, according to Datamonitor (2002), is set to continue. According to
Reuters, the Western European call center market as a whole is expected to grow by 12
percent annually. In European countries, such as the UK, more employees work in call centers
than in many well-known industries, and ®gures estimated that in 2001 2.2 percent of the UK
population were working in call centers. Miciak and Desmarais (2001, p. 351) state: ``Call
centers are changing the way companies communicate with customers and are a strategic
asset in delivering exceptional service quality. Companies that focus on customer loyalty are
increasingly using their centers to differentiate their product or service offering and drive
customer satisfaction.''
According to the Call Center Association (1999), a call center is a physical or virtual operation
within an organization in which a managed group of people spend most of their time doing
business by telephone, usually working in a computer-automated environment. However, it
seems that the nature of call centers is rapidly changing, with CRM being a hot topic in call
centers today entailing strong investments in technology for loyalty and growth. According to
Prahabkar et al. (1997) call centers allow a company to build, maintain, and mange customer
relationships by solving problems and resolving complaints quickly, having information, answering
DOI 10.1108/13683040410569415
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questions, and being available usually 24 hour a day, seven days a week, 52 weeks a year.
Mitchell (1998) argues that call centers can form the heart of successful customer relationship
management strategies.
There is increasing evidence that call centers are gradually migrating into customer contact
centers (Acey, 2002). Customer contact centers handle all relationships with the customer
and utilize multiple channels, integrating traditional channels of telephone and fax with newer
technologies such as e-mail, SMS, and WAP. According to Reuters (2002) a contact center is
an operational group within a business, which is concerned with the development of customer
relationships, using integrated technology solutions and business processes. Miciak and
Desmarais (2001) state that today's call centers are complex operations that require a
combination of technology, process, and human talent in order to succeed.
However, it seems that the human aspect is often ignored in today's call centers. It suggests
that performance management in call center environments missed the evolution seen in the
®eld of general business performance management since the beginning of the 20th century
right through until today. This evolution can be described as one from the machine age to the
information age (Crainer, 1998), or from scienti®c management to the management of today's
complex and global knowledge economy.
This evolution started with Taylor, who was later much criticized for his view that there was one
single best way to ful®ll a particular task. According to Taylor it is only a matter of matching
people to a task and then supervising, rewarding and punishing them in accordance with their
performance. In Taylor's view there was no such thing as skill and all work could be analyzed
step-by-step, as a series of unskilled operations that could then be combined into any kind of
job (Crainer, 1998). Performance management systems used at that time re¯ected this view
with a focus on operational ef®ciency. The stopwatch was the critical tool of that time. This
management approach was later criticized as inhumane, and it was not long before people like
the French management thinker Henri Fayol recognized that the esprit de corps is a vital factor
for the success of organizations, contrasting Taylor's view that any identi®cation with fellow
workers was a distraction rather than a motivation. The evolution of business performance
continued with the recognition that other aspects than ef®ciency and ®nancial output are
contributing to the overall performance of organizations. The ®nancial bias needed to be
balanced against performance criteria, such as stakeholder satisfaction including customers
and employees, quality, know-how and intellectual property. This resulted in the development
of various performance management and measurement tools including the balanced scorecard
(Kaplan and Norton, 1992) and the performance prism (Neely et al., 2002) to name just a few.
When we look at the way many call centers measure and manage their performance today it is
easy to forget that the world has moved on from Taylorism and scienti®c management of mass
production organizations. Sometimes referred to as the ``sweatshops of the Western world'' or
``new dark satanic mills,'' call center performance measures are dominated by stopwatches
and measures such as time to answer a call or call duration. Tayles et al. (2002) maintain that
call centers are very competent in capturing information about ef®ciency, but pay little attention
to the qualitative employee characteristics that create value for the organizations and its
customers. The authors continue to argue that call center agents would normally be assessed
in terms of ``number of calls taken,'' ``ability to answer the customer query,'' or ``number of
productive hours against the number of hours worked,'' in other words, in terms of their
productive value and ef®ciency. The problem with these measures of productivity and ef®ciency
is that they are of little worth when it comes to measure value added (Tayles et al., 2002). Burger
and his colleagues from Maastricht University (2000) state that, in order to manage well,
managers in call centers ``need to ensure that the measurements accurately portray what
management wants to be measured. The effective management of high quality voice-to-voice
service delivery could be adversely affected by the absence of a valid measurement instrument.''
2. Measuring performance in call and contact centers ± the ef®ciency trap
According to Neely et al. (2002) performance measurement can be de®ned ``as the process of
quantifying the ef®ciency and effectiveness of past action.'' Call centers are typically producing
many measures of performance, sometimes numbering in hundreds (Miciak and Desmarais,
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2001). Miciak and Desmarais maintain that the majority of measures are operational ef®ciency
measures and have to do with telephone technology (e.g. average talk time, abandon rates,
etc.) in use and adherence of employee standards of practice (e.g. occupancy rates, calls per
hour, etc.). Gilmore and Moreland (2000) identify the following measures of which all were
reported on wall displays in various call centers.
J Number of calls answered within past ten minutes.
J Calls waiting to be answered, that is ``in the queue.''
J Number of agents currently taking calls.
J Number of agents waiting to take calls (free agents).
J Number of ``not ready'' agents.
J Number of agents on outgoing calls or on a call to another agent.
It was identi®ed that agents paid close attention to the display and that they would only go for a
break if the displayed call situation would allow it.
There is little evidence in the literature about performance measures in call center environments.
However, Tom et al. (1997) indicate that call center manuals provide some guidance about
common measures of call center excellence. Anton (1997) claims that the following measures
help to track quality of call center service (summarized in Feinberg et al. (2000)):
J ASA (average speed of answer).
J Queue time (amount of time caller is in the line for answer).
J Percentage of callers who have satisfactory resolution on the ®rst call.
J Abandonment rate (the percentage of callers who hang up or disconnect prior to answer).
J Average talk time (total time caller was connected to telephone service representative).
J Adherence (are agents in their seats as scheduled?).
J Average work time after call (time needed to ®nish paper work, do research after the call itself
has been completed).
J Percentage of calls blocked (percentage of callers who receive a busy signal and could not
even get in to the queue).
J Time before abandoning (average time caller held on before giving up in queue).
J Inbound calls per TSR eight-hour shift.
J TSR turnover (the number of telephone service representatives who left in a period of time,
usually annually).
J Total calls.
J Service levels (calls answered in less than x seconds divided by number of total calls).
Feinberg et al. (2000) claim that the importance of these measures is con®rmed in other
leading publications on call center management (Cleveland and Mayben, 1997; Sparrow,
1991). From the experience Miciak and Desmarais (2001), organizations rarely measure
customer satisfaction with call center experience measures such as the ones stated above.
Feinberg and his colleagues (2000) empirically tested the 13 ``critical operational determinants''
of call center excellence by using data from 514 call centers. Their data shows that only two
of the 13 operational determinants, namely ``percentage of calls closed in ®rst contact'' and
``average abandonment,'' have any statistically signi®cant, albeit weak, in¯uence on caller
satisfaction. One explanation for this is that technology in call centers enables them to easily
track operational measures and that ``we make important what we can measure'' (Feinberg
et al., 2000). This assumption is supported by Silverman and Smith (1995) who maintain that
ease of measurement leads to automatic reporting which, in turn, can lead to the deceptive
belief that the reported measures are important and motivating.
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Our research and experience provide signi®cant evidence that the current focus on ef®ciency
measures in call centers can in fact be counter-productive to achieving customer satisfaction
(Marr and Neely, 2004; Parry and Marr, 2004). Many call centers seem to have fallen into the
trap of believing that operational measures such as call duration or average time to answer
are indicators of customer satisfaction. The fact is that they are not; they are only measures of
ef®ciency, which in turn is often seen as a determinant of ®nancial performance. Most call
centers seem to miss the important link between employee satisfaction, service quality,
customer satisfaction, and pro®tability.
3. The Fujitsu case study
Fujitsu Services is one of the leading IT service companies in Europe, Middle East and Africa.
It has an annual turnover of £2.4 billion (e3.9 billion), employs 15,400 people and operates
in over 30 countries. It designs, builds and operates IT systems and services for customers in
the ®nancial services, telecommunications, retail, utilities and government markets. Its core
strength is the delivery of IT infrastructure management and outsourcing across desktop,
networking and data center environments, together with a full range of related services, from
infrastructure consulting through integration and deployment.
In 1999 there was a growing realization at Fujitsu that the traditional approach to performance
management was failing customers. Operating in the IT outsourcing sector, Fujitsu found it almost
impossible to differentiate itself in a very aggressive marketplace. A functional focus resulted in a
lack of cohesion and fragmentation. Many client accounts were operating at contractual
obligation and no higher, while 15 percent were at critical levels of dissatisfaction and were
unlikely to be renewed. Furthermore, the turnover of front-line call center staff was 42 percent.
Fujitsu found that 40-90 percent of incoming service requests were entirely preventable. This
highlighted where Fujitsu were incurring unnecessary costs, and more importantly, where they
were not meeting the needs of customers. The message was stark for Fujitsu. It had to look at
what was creating value for customers, what was not, and then stop doing what was not
creating value. It became clear that if it could identify the causes of institutional waste and
remove them at the source, it could gradually decrease the time spent on value restoration
and increase the time spent on value creation for the customer.
This was an opportunity to not only re-design the organization but to change the way Fujitsu
worked with its customers and even change the service offerings. It was clear that customer
satisfaction was a given. Customer success, however, became the new goal.
3.1 From make and sell to sense and respond
Leadership at all levels
Leadership is fundamental to the success of any change program. A full leadership discussion
is beyond the scope of this paper. However, the leadership principles adopted within the sense
and respond approach are best characterized as ``transformational,'' and are based on intrinsic
motivation and the creation of possibilities for others to succeed in a way that provides choice,
not ultimatums.
A few have tried to implement sense and respond by selecting the techniques and tools they
feel comfortable with and ignored the leadership modules, this results in a failure to challenge
the accepted wisdom of current operations. This illustrates the need to develop leadership at
all levels, and break the traditional view that it is the responsibility of ``management'' alone to
challenge the thinking and working practices. Leaders at all levels address the dif®cult questions
of integrity, alignment to purpose and provide a view of reality with data.
Implementation phases
Fujitsu began to redesign its services with a new emphasis on people, the problem-solving
process and value creation. This involved the identi®cation of training needs, the deployment of
new skills, and the reorganization of roles and responsibilities. New key performance indicators
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and service level agreements were built around the business goals and business rules of clients,
not the processes and targets of Fujitsu service staff.
Commercial contracts between Fujitsu Services and its clients had to be restructured to realize
mutual bene®t from call reduction. Many clients are now charged for each potential user of the
service, not the number of calls placed. Below we will outline the different phases Fujitsu went
through to implement its new performance management system:
Phase 1 ± learning to sense
J View the organization from a customer perspective.
J Evaluate value chain measurement horizontally and vertically.
J Understand front-line roles and responsibilities.
Phase 2 ± learning to respond
J Re-educate management.
J Introduce a new theory of management.
J Replace make and sell mass production theories, with sense and respond theories which
incorporates systems thinking and lean production.
Phase 3 ± leading change
J Utilize transformation leadership theories.
J Employ cognitive behavior methodology.
J Operate within a leadership and coaching framework.
J Award staff and managers with accreditations.
Phase 4 ± mobilizing
Create an organization capable of designing itself against customer demand by implementing
an enterprise value-management framework:
J Provide detailed change programs to transform the corporate infrastructure.
J Implement a business process management system including a high-level measuring system
for monitoring end to end business processes such as HR, training, commercial, product
development, technology, etc.
J Adopt transformational approaches and principles.
J Design mobilization plans to transfer domestically and internationally.
J Provide in-country support for operations.
The hierarchy within Fujitsu was essentially turned upside down. The role of managers was
changed from one of authority to one of support. The central responsibility for them became the
provision of the necessary knowledge and tools to allow front-line staff to handle the needs of
the customer and assume responsibility for the end-to-end service, even if that service left the
con®nes of the helpdesk at Fujitsu and was transferred to other client suppliers.
Many managers at Fujitsu found the new sense and respond approach dif®cult to adapt to since
it upset the old power structure. Some have resisted the change altogether, either because
they felt unsure about the new management approach, or in some cases, because the client
contract could not be changed in order to gain mutual bene®t from call reductions.
Some 800 members of staff were initially trained in the sense and respond model. Recently,
Fujitsu has taken its UK-developed model and deployed sense and respond into operations
in South Africa, Australia, and Japan.
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3.2 Results at Fujitsu
Front-line staff ultimately own the measurement system, so they drive the rest of the
organization. Womack et al. (1990) agree with the importance of staff. They assert: ``If
employees are to prosper in this environment, companies must offer them a continuing variety
of challenges. That way, they will feel they are honing their skills and are valued for the many
kinds of expertise they have attained.''
Managers become part of the support network to front-line staff in order to release the energy
and potential of the whole organization. Front-line staff start to perform the kind of higher-level
tasks that were previously thought to be totally beyond the scope of the average helpdesk
employee.
Advisors have the freedom to choose how to solve a problem and meet customer needs. As a
result, issues that do reach advisors are more substantial. Therefore, advisors have a chance
to solve more challenging problems and gain greater satisfaction. They are rewarded for how
much knowledge they create, not the number of calls they handle.
Fujitsu Services are now able to offer many clients reduced annual costs because they are
con®dent about removing demand. This approach positively impacted customer and client
satisfaction, employee satisfaction and operating costs.
With sense and respond, Fujitsu Services have had the following results:
J Customer satisfaction increased by 20 percent.
J Employee satisfaction increased by 40 percent.
J Staff attrition decreased from 42 percent to 8 percent.
J Operating costs reduced by 20 percent.
J Contract renewal and service upgrades amounted to £200 million.
Roles within the call center are constantly changing in response to the proactive actions of the
people within it. This creates a dynamic culture; and feedback from advisors revealed that they
are highly motivated and proud to be part of an innovative and creative organization. Staff were
asked what difference the new way of working made to them. Some of their comments are as
follows:
For Fujitsu, the sense and respond performance management model is no longer a theory. It is
a way of life and a core competence. It has transformed the whole organization. Fujitsu have
redesigned their activities not on market intelligence but on customer-knowledge and end-toend performance data. Sense and respond has become a major differentiator and positions
Fujitsu as industry thought-leaders.
3.3 Results beyond the con®nes of the call center
Fujitsu recognized the potential of sense and respond and applied it in a wider context.
In addition to the call center environment, these principles have now been applied to mobile
engineering, human resource on-line services, payroll, supply chain, remote IT management,
mainframe support, and pre-contract analysis.
Clients that have embraced sense and respond are also reaping the bene®ts of working with
Fujitsu. At a major European airline company, helpdesk intelligence has managed to reduce
queues at ticket of®ces, check-ins and boarding gates. Calls into the helpdesk have fallen by
30 percent, system availability has increased and client IT operating costs have decreased.
In addition, at the Department of Trade and Industry, customer satisfaction ratings have risen
from 5.2 to 8.2, a 63 percent increase. Furthermore, the Learning and Skills Council (LSC), a
government-funded training body providing education and skills for anyone aged 16 and over,
reported an increase in customer satisfaction from ``acceptable'' to ``highly-satis®ed'' in the
space of just four months. Additionally the LSC account saw:
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J ®rst contact ®x increased by 64 percent;
J end-to-end service cycle time reduced by 60 percent;
J end-to-end costs decreased by 30 percent;
J client requesting that traditional service level agreements be replaced in favor of business
bene®t agreements; and
J value creation to value restoration ratio moved from 10:90 to 60:40.
Finally, in the case of a leading Fujitsu client that decided to share its IT infrastructure outsourcing between many suppliers initially awarding Fujitsu its helpdesk contract. Using sense
and respond, the helpdesk staff observed 30 percent of the incoming demand was a direct
result of third parties failing to meet customer needs. When action was taken on the data,
incoming calls were reduced by 24 percent in one month. Fujitsu later went on to win the
client's entire IT business.
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