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Does working on your call center’s budget terrify you? If so, it’s probably because you must struggle for every dollar, build a case to keep what you have, and worry about which people or departments you’ll need to cut. Though you can argue for your cause, you have little say into the numbers for your call center budget. This is because other divisions are making similar claims for their respective budgets. One side gains budget at the expense of another.
Every year you go through this, and the results are seldom what you hope for. Surely there must be a better way.
This occurs because administration views your call center as a cost center.
A cost center is an area that has money going out and nothing coming in. It’s an expense they seek to control. Each dollar they cut from a cost center’s budget is a dollar that trickles down to the bottom line.
However, you can alleviate much of this agony by repositioning your call center as a profit center. This means upper management recognizes that you generate revenue, and since they don’t want to jeopardize that revenue, they’ll be kind with your budget.
Charlotte Mansfield was the director of operations for the call center division at a large state-wide healthcare organization. Each year the budgeting process was a bigger ordeal than the year before. Each year they expected her to do more and gave her less money to do it. She wasn’t a miracle worker and wondered just how bad this year’s budget cuts would be. The stress was getting to her. And this was extra stress on top of the normal stress of running a top-notch, professional healthcare contact center.
She knew all too well that the suits in corporate saw her operation as a money pit. Though she had tried to get them to change their perspective and view her has a revenue generator, her arguments accomplished nothing. They considered her division’s line item on their master budget as a line to slash.
Was it time to think about a job change? What if this was the year that they cut her call center budget to untenable levels? Even with last year’s cuts and the negative impact it had on the call center’s operation, Charlotte’s resume still looked sharp. But that wouldn’t last forever. It might not even last through the year.
Charlotte had counterparts in other organizations, some of whom reported a different situation with their budgets. Their budgeting team viewed them as a profit center. That meant the call center brought revenue into their healthcare organization. And this revenue was more than enough to offset their operation expenses. These call centers provided a positive cash flow for their organizations, whereas Charlotte’s call center carried the stigma of being a cash drain with nothing tangible to show for her team’s efforts.
When these call center directors wanted to launch a new initiative, update software, or expand their service offerings, they only needed to demonstrate a positive return on investment (ROI). Each organization had a different ROI threshold that directors needed to hit, but most targets hovered around the 10 percent area. If they could show a ROI that met this number, they had little difficulty getting the money they needed at budget time. And if their ROI was two or three times the target threshold, management could often scare up funds in mid-fiscal year that wasn’t on the budget.
Oh, how Charlotte begrudged these people and their envious situation as a profit center when it came budget time. She wondered if one of them had an opening for an assistant director. It would mean a pay cut, but it would be worth it to remove the budget-induced stress that she faced every year.
She sent out feelers, but no one had any openings that came close to matching her skill level and experience. However, after her fourth inquiry, her long-time industry acquaintance, Pam, offered a different solution.
Pam’s suggestion was that instead of Charlotte spending the year trying to land a different job, she should invest that same amount of energy in repositioning her call center as a profit center. Though Charlotte had a conceptual knowledge of what she needed to do, she lacked the practical steps she needed to take. Would Pam help?
But when Charlotte asked for Pam’s assistance, her long-time contact laughed. This devastated Charlotte, whose mind immediately reverted to finding a different job, but Pam was quick to clarify. The reason she laughed was that she wasn’t exactly sure what to do either. True, a few years ago her call center had successfully repositioned itself as a profit center, but she had enlisted the help of a healthcare call center consultancy to make this happen.
Charlotte immediately knew this was the path she wanted to take. The first step was to get funds to hire a consultant added to her budget. The VP she reported to wasn’t keen on the idea, until Charlotte explained what she wanted the consultant to do.
The VP immediately saw the value of this investment and went to bat on Charlotte’s behalf. He fought vigorously to work funds for a call center consultant into the budget, although hidden in the staff development line item. As a trade-off, she had to give up a request to upgrade their system software, something she had lobbied to get for several years. But if this consultant could move her operation from a cost center to a profit center, she would soon be able to get the software upgrade too. She just needed patience.
With her budget approved, having Charlotte’s consultant fees safely secreted in her staff development section, she moved forward to find the right consultant. Although Pam had forwarded the name of her consultant, Charlotte felt she should perform due diligence before committing. She did phone interviews with three prospects, but as expected, Pam’s recommendation had the skill and experience Charlotte so desperately needed to reposition her struggling operation as a profit center.
The consultant had successfully done this at other healthcare call centers and had a proven methodology to apply to Charlotte’s situation. The process was simple enough, yet the implementation presented challenges. With the consultant’s help, Charlotte identified each type of work her call center staff performed. Then they brainstormed on how this work provided value to her organization. This was the easy part. The difficult part was finding the supporting data to determine the dollar value of each one of these activities. But with the consultant’s experience in going through this process, she coached Charlotte on locating the needed information. Then they packaged it in a way to build her case that her call center division was not a financial burden but a revenue generator.
Armed with this information, the consultant recommended to Charlotte how to best present this information to the accounting team that oversaw the budget. The process took several months to complete, but the outcome was worth the effort. Accounting reclassified Charlotte’s call center operation as a profit center and not a money sinkhole.
Charlotte started the process of moving her operation from a cost center to a profit center by adjusting her budget, so she could hire a healthcare call center consultant with experience in this area. With her budget approved, the following year Charlotte engaged the consultant. They worked together for most of that year to gather the needed information to build her case and strategically present it to management. This allowed Charlotte to confidently prove that her call center brought in more revenue than it cost to run.
Working on her call center budget for the next year was a breeze compared to her prior experiences. She was able to maintain the budget she had and build on it, so she could upgrade her software for greater efficiency, expand into a new service area to generate more revenue, and even hire some additional staff to improve her service level.
Charlotte has given up all thoughts of finding a different job. Now that management views her operation as a profit center, she couldn’t be happier.
Contact Call Center Sales Pro today at 800-901-7706 to learn more about their comprehensive, full-service consulting services. They can help you move from a cost center to a profit center. And if you’re already a profit center, let them guide you into greater profits.
