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Capacity Planning – Its Importance and Getting It Right

Forecasting, Scheduling

Capacity PlanningCapacity planning isn’t getting the attention it deserves, nor is it valued, as it should be and a real disservice to those who do it. The general perception is that “any” capacity planning process is valid and accurate. But in my opinion, even understanding the skill level required to create an accurate capacity plan is underestimated. Capacity planning is, in fact, a very challenging discipline that requires a very thorough understanding of the process, the date and how each peace behaves from a modeling perspective.

The aim of my whitepaper, The ABCs of Capacity Planning, is to help you audit your capacity planning process with the ultimate goal of improving the accuracy in planning your capacity and meeting your service target levels. This will have positive repercussions on your costs as well as customer and agent satisfaction.

Like snowflakes, every organization differs in their planning processes. Capacity plans are no exception. They differ in the number of steps, in the complexity of spreadsheets, the formulas, the calculation, the variable definitions and assumptions. These differences result in different outcomes. Nonetheless, I believe The ABCs of Capacity Planning could be a big help to you in challenging your process and figuring out where the gaps are in how you capture, define and model your data.

I start by clearly defining Occupancy and showing how, besides the Erlang formula, it is driven by inefficient scheduling. With data from your ACD or CTI platform, you’ll model the relationship between Occupancy and the Service Level (SL) in a regression graph to determine your break-even point: the percent of Occupancy needed to meet your desired SL target.

I then discuss shrinkage, the difference between break shrinkage and attrition shrinkage and how this can affect total agent Handle Time (HT). This step will take up most of your time and effort. This is an opportunity to build a HT versus Occupancy regression model to see how higher occupancies drive up HT. Each piece (or agent state) is either part of shrinkage or HT and all pieces must be accounted for.

True, the inbound contact center has a lot of variability that you don’t have control over but you can control the math. Making minor adjustments may have a tremendous effect on the accuracy of your forecasted full-time equivalent (FTE) requirement.

I continue by discussing call volume and remind you not to exclude the Abandon rate after analyzing its relationship with Occupancy – in yet another regression model.

Finally, I provide a formula that tests the accuracy of your capacity-planning model, which is where the fun begins! You get to figure out where the errors are in your process and it won’t be in just one place. The biggest contributor to your variance will most likely be shrinkage.

It wont’ be easy but don’t get discouraged. If after reading The ABCs of Capacity Planning, you still have questions, please don’t hesitate to reach out to me.

/Blair McGavin (blair.mcgavin@teleopti.com)

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