Welcome to Understanding Link Analysis. The purpose of my site is to discuss the methods behind leveraging visual analytics to discover answers and patterns buried within data sets.

Visual analytics provides a proactive response to threats and risks by holistically examining information. As opposed to traditional data mining, by visualizing information, patterns of activity that run contrary to normal activity surface within very few occurances.

We can dive into thousands of insurance fraud claims to discover clusters of interrelated parties involved in a staged accident ring.

We can examine months of burglary reports to find a pattern leading back to a suspect.

With the new generation of visualization software our team is developing, we can dive into massive data sets and visually find new trends, patterns and threats that would take hours or days using conventional data mining.

The eye processes information much more rapidly when information is presented as images, this has been true since children started learning to read. As our instinct develops over time so does our ability to process complex concepts through visual identification. This is the power of visual analysis that I focus on in my site.

All information and data used in articles on this site is randomly generated with no relation to actual individuals or companies.

Where fraud outsourcing goes wrong and why it's wrong for every other kind of outsourcing

Learning the Lesson:

After having launched over ten different outsourced fraud teams over my career it is still amazing to me that institutions and the BPO industry engaged in outsourcing of all types tries to stuff every process from customer service to advanced technical development into the same mold and expect to achieve excellence.  Trust me, this is pertinent to fraud and analytics, I am not going off on a rant and it's not off topic, just be patient.

I have sat in what must be 100 presentations by BPO's over the years and the pitch is always the same, the facilities are always the same and the results always end up being the same.  The formula for measuring success in outsourcing, things like productivity / productive hour x volume with a metric for what passes for quality is fabulous for figuring out how many people you need to answer a phone within 2 rings at anytime day or night but what are you actually producing?

Companies today go to all lengths to create an environment for the employees that envelops them in the corporate culture of the company to inspire creativity, productivity and loyalty.  There are gyms to promote health, benefits to cover family members, yoga classes, organic snack bars, movie night...you name, its out there and thats because it works.  Because of the focus on the employee, employees are more attached to the brand of the company, loyalty is increased, satisfaction increases and you retain the talent that took you time and money to develop and your employees love the company.....and not one of them is ever going to talk to your customers.

Meanwhile down the street on the other side of the world are a group of people who are the face of your company to customers, who are likely the only people that are going to come into contact with your customers and the last image your customers are going to have of you and with the exception of your outsourced program manager I am willing to bet you have no idea what their names are.

But that isn't the frightening part, the thing that really should be keeping you up at night is that not one of them know who you are, anything about your company, anything about your culture other then the cardboard logos thrown up on the wall and even if they did, don't worry because 50% of them are going to be gone in the next six months.  In almost every single presentation I have set in by BPO companies I always can't wait to get to the turnover slide in the deck where having 50% turnover is actually an accomplishment.  If 50% of employees belonging to any function in your company left every six months your company would be bankrupt in two years, but apparently it's ok for your most important customer facing department in your company.

What Should be Important:

One of my favorite CEO's Richard Branson said, "Clients do not come first, employees do, if you take care of your employees they will take care of your clients".  Most companies I have worked for, in some form, have a "take care of the customer" mantra as anyone with any sense of business survival would sign on to.  So if it is universally understood that taking care of your customer is important, lets turn outsourcing on it's head and use a lesson from fraud outsourcing.

Let me start by saying that outsourcing is important and not sinister.  It provides and excellent way to scale manpower and international coverage in a cost effective manner that would not be possible in-house and allow you to leverage the advanced knowledge and talent of your employees for higher level big think projects.  I have built numerous outsourced fraud teams for that reason and never just to save money or to off shore a process that no one cared about, I did it so that I could have a greater amount of fraud coverage and manpower that would not be possible inside the company and to leverage the abilities of my in-house team for projects they are capable of doing if only for time.

I learned allot of lessons along the way, several mistakes, many breakthroughs but it all started in one place...there is no possible way I can build an effective outsourced fraud team using the cookie cutter "best practices" of the outsource industry.  

There were two problems to overcome that actually solves all the rest of the problems in any program.  Fraud prevention and analysis takes a significant amount of time to learn and that knowledge and effectiveness builds over time so there is no way to have an effective fraud prevention team if they are going to turnover every year.  Second, in fraud it really doesn't matter if everyone is going fast if they aren't doing it right.

I understand that every outsourced process is not overly complex, but turnover exposes another problem which is if people are leaving they don't care about your company, your product or your culture and likely never did.  I guarantee that every company carefully monitors their internal turnover and if that percentage goes up even 1 point someone is asking why, in the meantime your outsources team is leaving in droves and no one is even aware of it.  If you are loosing 50% of your team they were probably already leaving the first day they started working for you and the reason they are on your program has absolutely nothing to do with the best intentions of your company.

In most fraud program I need six months before someone becomes effective in fraud and a year before fraud become intuitive.  Part of that has to do with technical knowledge, part has to do with an institutional knowledge about how the business works and the way that customers interact with the product that allows the seasoned analyst to intuitively know something is wrong, even if no fraud warnings are present.  After the first year, a fraud analyst on my program will proactively identify fraud in transactions where no indications are in place 450% higher then those with six months and under in experience. That is because they understand the system, the attributes, the tools and most importantly the company and its users.  The same tenured analyst will 60-70% fewer errors then untenured analysts.

If a fraud analyst becomes 450% more effective after a year because of their understanding of our company and process what would that mean for a customer service agent.  The average tenure of a customer service agent in a large fortune 500 company that I worked for was 4.5 months.  Image the force multiplier that a tenured customer service agent with over a year of experience in dealing with every customer issue from your company has!  

The second issue is very challenging to overcome because it is so imbedded in the BPO culture and that is that speed does not equal success.  Just because an agent can get someone on and off the phone in 2 minutes mean absolutely nothing if they didn't solve the problem and solve it right.  It really should be a no brainer but this is mysteriously etched into every outsourcing manpower equation of success and its nutty and one of the reason that thousands of people around the world want to throw their phone across the room every time they call a 1-800 help line.

In fraud its even more prominent because mistakes mean money, one of my fraud analysts making a mistake on a potential fraud transaction could cost my company thousands of dollars.  But is it more prominent because every pissed off customer that gets off the phone with your support center more pissed off costs you thousands multiplies by every single friend, family member and social media site they interact with.  I don't think there is one person who hasn't said "I am never buying anything from that company again" at one point in their life and I guarantee it was rooted in the customer service experience and is one of the reasons I will never buy another Samsung product as long as I live.

The most amount of time I spend in getting a fraud team up and running is un-training them that fast is good.  I spend the first three months figuring out a much better formula for success which is the optimum speed that has the highest accuracy and quality rate.  There isn't a single process where this is going to be the same, and in building 10 team that rate is always different but if you don't start with doing it right and then doing it fast you will fail.  If you set unrealistic productivity rates, while you may save money on manpower, you will loose gobs of it in processing errors, lost money and unhappy customers.

What is the Solution:

The good news is that the solution to retention and a focus on quality and growing institutional knowledge is not complex but it does involve turning outsourcing on it's head.  

The key to retention is the same at your outsourced team that it is with your own in house employees.    

“Great companies don't hire skilled people and motivate them, they hire already motivated people and inspire them.”  The reason your company spends so much time on creating a culture and environment at their headquarters is just as important with your outsourced team.  You want people who are inspired to make the company better and believe me money is not even in the top 10 things that inspire people, every single person on my fraud team could leave tomorrow and make more money across the street.

Start focusing on the culture of your center and the fist thing you need to do is throw out the word "outsourced" and just call them your team.  If you call them your outsourced team or refer to them as your call center that is exactly how they are going to feel.  They are your people, the represent your company and are doing your companies work, they should feel just as important as every person who works for you.  If they do not have a connection with your company you have already lost the battle and it goes way beyond handing logos around the office, it means involving them, interacting with them, listening to them and challenging them.

At our outsourced offices, one of the requirements for our contract is that they had to create an environment similar to our own office.  No rows of cubicles, no thousands of people on one floor working for a hundred different clients, no supervisors on pedestals watching over them.  I wanted a dedicated workspace that had the feel of our company office, I wanted every applicant to be interviewed by a staff member because thats the way we hire people in our company, I wanted an interactive office layout that encouraged interaction between agents and not cubicles that isolate them.  I didn't want any restrictive office polices that didn't exist in our own company, I wanted them to feel trusted, why, because if they feel trusted they will act trustworthy.

To create the environment you have to be involved in the environment.  Our fraud agents all have video conferencing on their computers and can talk to and see any staff member I have anytime they want.  They can chat with anyone in our company and ask a question.  Our staff is in the center every other month and we have our analyst come to our office regularly.  The team leads in our centers participate in our team meetings every week.  It is not enough to create the environment physically you have to walk it like you talk it, meaning you have to get in the center, know your people, know their names, know what is important to them and listen to them.

Next was to look at the metrics, traditional call centers are completely focused on time, productivity time, time on call, time on break, time on lunch.  It has always mystified me why customer service agents aren't judged on if the actually solved the customers problem.  I understand that customer service is not always going to have the answer that makes everyone happy but I would rather not get through to a customer service rep then get one on the phone who's sole purpose is to get me off the phone and I can count on one hand the number of times I actually thought the other person on the line actually cared one way or the other.  Users and customers don't expect a solution, they just want an honest attempt to help and maybe it works and maybe it doesn't but at least you get off the phone feeling like the company gave it their best to solve the issue.

Again in fraud it is easy to measure, if the analyst is unable to stop the fraudulent transaction then the company is out of money and a person out in the world has a fraudulent transaction on their credit card or bank statement that has my companies name on it.  Do I care that the fraud agent took 10 extra minutes to make that decision, of course not, I care that they made the right decision and did it in the amount of time that was effective because the extra $1.75 it cost me saved my companies brand reputation, a customers piece of mind and confidence in my company and perhaps a return customer.

Every process needs metrics, our teams have metrics and a measurement of success.  The team has stretch goals with rewards, it is needed.  However, quality is always an important part of that goal and there is no reward for going fast and wrong.  Interestingly I did a little experiment once when launching a program, usually you start the program off with communicating the metrics and goals and in the beginning that is a focus on quality with a gradual increase in productivity over time as analysts become more proficient.  My experiment was I launched a program and didn't tell anyone what the metrics were.  I just told the team to go as fast as they could and still be confident they were making the right decision.

In most teams, it takes about 30-45 days before teams make the initial goal or metric.  In the case of the team where I did the experiment where I didn't tell them what the goal was, that team exceeded the initial goal in 3 days.  It's impossible to sustain because at some point you have to give people a measurement of success but I have been trying ever sense to figure out a way to come up with metrics for our outsourced team that has nothing to do with numbers.

The Moral to the Story:

I suppose I should get to the moral of the story, out of the 10 outsourced fraud team I have launched over my career the average turnover rate was 2%.  At my latest company the fraud team has been in place for four years now and out of the 28 analysts I started with I still have 23 of the original team members we launched with.  78% of the analysts on my team have over 1 year of experience and 45% have over two years of experience.  The average productivity of the team has increased 40% and the accuracy rate of the team is 98%.

If this was a customer service team, I would have 78% of my customer service agents with institutional knowledge that equals that of an internal employee and have over two years of experience in dealing with my customers.  My customer service agents would know my companies culture, feel part of my company, care about my company and thus care about my customers.  They would focus on solving the customers problems first and handling as many issues during a shift as they could second which would equate to a 98% success rate in the customer feeling as if they agent assisted them to the best of their ability.  How cool would that be?