Megacard Memo

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Executive Summary

We, Team NTT, believe that Megacard should combine all three Midwest call centers into a centralized one while increasing the call wait time by 30 seconds. We believe that these suggestions provide the company with the best combination of savings and retainment of call quality to its clients. Also, given that call volumes increase and vary a great deal in next year’s projections, evaluating the proposed ideas for atleast a year or two before making any changes to the rest of the company. Attached is our detailed analysis of our research and findings, which states how we came to these conclusions, along with our calculation tables at the end.

MEMORANDUM

To:Megacard Management

From:Team NTT

Date:February 26th, 2013

Subject:Call Center Centralization

We have looked over the productivity and efficiency of the three Midwest call centers as well as this years call volume and next year’s projected call volume. Our findings are only for the Midwest centers, however similar results would be seen in other areas as well, dependent mainly upon call volume.

In looking at the proposal of combining all three centers into a centralized one, we found that Megacard would save a total of 80 TCs per day, resulting in $3,000,000 a year in salaries alone. Also, the fixed expenses of the other two buildings, including rent, data processing and telephone would be saved as well, which was 23% of total costs. These savings alone would justify the startup and maintenance cost of the new centralized building. (Shown in attached Table 1)

With this switch, we believe that quality would also be improved. With one management team being able to supervise the entire region’s calls, this would improve the ability to predict the peak call times and call volume per day, allowing better staffing strategies to be put in place. For example, hiring part time employees to come in during peak call times, from 10:00 a.m. to 11:30 a.m. and from 1:00 p.m to 3:30 p.m, and all day on Monday and Fridays would better equip your staff to handle the call volume and provide the necessary quality to your clients. You could also re-route some calls during the peak call times to other centers in different areas that are not in peak call times who could handle more calls during downtime. Overall, we believe a centralized call center would save money as well as provide better staffing procedures to better ensure the proper quality needed to maintain Megacard’s reputation.

Another possible proposal is to reduce the call time that TCs provide clients, or increasing the amount of calls a TC can take in a ½ hour. Currently, there is 6 TC per ½ hour. As you reduce your call time, you are therefore reducing the amount of TCs you would need for the day. As of right now, the cost is $25,800 per day. Reducing the call time for 7.5 TCs per ½ hour would result in a savings of $4,650 per day. While 10 TCs per ½ hour would result in another $4,650 per day. Going from 6 per ½ hour to 10 per ½ hour would net a savings of $9,300 per day. Doing this would result in a dramatic savings per year, however we believe that call quality would suffer greatly. (Calculations shown in Table 2)

Given that call quality is your main focus, we believe any change in the amount of time TCs are on the phone with clients would result in a negative change in quality. Reducing call time leads to more possibility of errors, like rushing and entering wrong numbers or messing up a client's order. If clients feel like they are not a priority anymore, they will most likely take their business somewhere else, which would soon offset any profits you gain from making this change. Your reputation of quality is your biggest advantage among other companies and keeping this should be your biggest priority, which is why we do not recommend any change in call time.

The last proposal up for consideration is increasing the time clients wait before being connected to a...
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