Call Center Opportunities - Why You Want to Go Into the Business?

Multi-billion opportunity

According to Gartner, the worldwide market for customer service outsourcing is set to grow from $8.4 billion in 2004 to $12.2 billion in 2007, but the offshore component will remain small. Despite the hype surrounding offshore call centers, offshore customer service outsourcing represents less than 2 percent of the worldwide market in 2005, increasing to less than 5 percent in 2007.

Gartner reports that by 2007, about 80 percent of organizations outsourcing customer service and support contact centers with the aim of reducing cost will fail.

Despite these gloomy predictions, other analysts are predicting rapid growth of call centers in Asia Pacific. Frost & Sullivan foresees the number of call centers in 2006 to exceed 26,000, supporting 1.9 million-strong workforce. By 2011, it will mushroom to 40,000 manned by nearly 3 million agents.

Who wants to hire a call center?

Historically, a call center is a competition-driven internal response to provide better service or generate new sales opportunities. As businesses streamline operations and identify core opportunities, call center functions are outsourced to external providers for a number of reasons such as better utilization of internal resources, reduction of per unit call cost, increased focus on core competency.

There are two main types of call centers: consumer transactional-based systems, which lend itself to a lower cost location (and therefore readily outsourced); and the more complex interaction contact centers such as those that provide technical helpdesk services, which are generally kept in-house.

However, as improvements in technologies and processes take shape, businesses are turning to external call centers to provide everything from over-the-phone technical helpdesk support to helping execute lead generation and tracking campaigns.

The primary sources of business for call centers are the US, Europe and Australian markets. Companies from these countries outsource to Asia because of the perceived lower labor cost, improved computing/communication infrastructure, and the high level of English-language competency.

China, Korea and Japan represent sizeable opportunities for Asia's growing call center market. However, language will be the biggest hurdle in serving the domestic markets as traditional call centers leverage English-speaking staff.

Transformation trends

Executive level managers must understand that the call center operation is a strategic element of a business and that the amount of time a call center agent spends with customers is greater than customer interaction by any other member of the organization, including sales people. The call center is therefore a critical element to the strategic success of the company.

There is a technology shift toward self-help systems. This automated interaction, enabled by interactive voice response systems, is as important as a live interaction and requires just as much focus to ensure positive customer experience.

"For many enterprises, the customer experience is the basis of competitive differentiation and the call center is at the heart of that experience. Empowered by IP-based solutions, next generation customer service practices are expected to undergo significant changes in such areas as matching the level of service to the lifetime value of the customer," says Tom Cheong, managing director, ASEAN, Avaya.

Focus

Certainly, technology plays an important role in ensuring that campaigns are executed on time, on schedule and within budget. However, the customer should always be the focal point, whether the point of contract is through the phone, by email or via the web.

According to market research firm Gallup, lack of customer engagement influences customer attrition. Disengaged call center agents cost organizations millions of dollars in lost opportunities. Where customers rated their experience as much worse than expected, this equated to a loss of 15 percent of customers or $4.5 million in revenue.

Continuous training

Staff retention is a never ending issue within the call center industry. Having a well-rounded training strategy and program is tantamount to survival and success.

Ed Saldajeno, managing director of Alva Pacific Franchise, a thriving call center operator Philippines, reminds aspiring call center entrepreneurs of the importance of training. "Continuous agent skills training and development are critical to ensuring customer satisfaction."

Dynamic, flexible organization

It is often said that as an organization grows in size, it becomes less and less nimble in the way it executes strategies. In a business that thrives on understanding peculiarities of individual customers, flexibility is key to success.

Peter Chai, country Manager, Southeast Asia, BT, suggests that: "Successful call center businesses have a proven ability to seamlessly ramp technology and agents up or down. They have use flexible commercial models that include risk and reward sharing, as well as utility-based costing. As competition builds up, building vertical expertise on existing service offerings will ensure sustained business relationship with clients."

Location, location, location

The core elements of a call center are its people, and availability of appropriate communications service. A rural location may be cheap but if you don't have a stable broadband connection, how will you do your business?

"Having good telecommunications infrastructure is important in a call center business. A lot of places in Asia currently do not offer stable and robust IP network infrastructure to support reliable center business. It is therefore important to identify the right location when setting up a call center business," says Junie Pama, country manager for Five9 Philippines.

In the next issue we will cover the basics of setting up a call center based on discussions with existing call center operators in Asia. Look for this experience-rich feature in the March issue of Enterprise Innovation Quarterly Review.