October 23, 2000

http://www.informationweek.com/809/callcenters.htm

Call Centers: Here, There, And Everywhere

Many companies shift from centralized centers to multiple outsourced global locations

By Norbert Turek

hen Logitech Europe SA hired Robert Laudensack to bolster its call-center strategy, he routinely spent 100% of his time troubleshooting. With multiple vendors and carriers involved in the customer-service center, there were plenty of problems to solve. After struggling with circuit outages and equipment breakdowns, he decided to outsource part of the global call center to a single provider. The result? "The outsourcing led to me being virtually jobless," he says. "Customer service [systems management] is about 5% of my time now."

Logitech Europe, whose parent company is the world's largest manufacturer of mouse-pointing devices, kept Laudensack and rewarded him with a broadened role: European project manager for sales and marketing information systems. But his situation illustrates the value that can ensue when companies outsource even some of their call-center operations. Not only is troubleshooting virtually eliminated, but so are employee retention issues and a good chunk of the cost of running call centers in-house. Also, call-center operations are streamlined, and multilingual support is easier to offer. The downside, however, is that companies lose control over some relationships with their customers.

Nonetheless, many companies are shifting from a single, company-based call center to multiple outsourced centers in several countries covering numerous languages. Although the thought of distributed international call centers seemed like an untenable headache even five years ago, it's now a growing trend for a few reasons: U.S. call centers are expanding their technology and presence internationally; many countries have deregulated their national phone networks; and customer-relationship management software used in call centers has improved.

Outsourcing call-center operations produces several key benefits. Among them: employee retention, streamlined operations, and multilingual service.

"There are two attitudes on customer support: Either get rid of it fast, or manage it well," says Laudensack, who decided to manage the company's customer service by outsourcing it. Outsourcing customer service doesn't have to translate into poor customer service. Call-center operators typically are trained on the products of the companies they represent.

In the United States, about 280,000, or 11%, of more than 2.5 million call-center agent positions are in outsourced facilities run by companies such as Convergys, Sitel, Sykes Enterprises, TeleTech, and West Telecommunications, says Brian Huff, a technology analyst at Datamonitor, an analysis firm. "We've got the processes in place to run efficient call centers, and we have people scouting locations all over the world to match a company's needs with the right people and economy," says William McKinney, director of product marketing at call-center operator TeleTech Holdings Inc.

For a company whose core competency is anything but call-center operations, handling hundreds or thousands of calls a day and managing the resultant information is a huge challenge. Companies must buy and maintain phones, computers, and routers. They must also keep their service representatives happy, despite the fact that many of the calls they're fielding are from unhappy customers.

Outsourcing to a third-party call center enables companies to turn over the employment headaches to someone else. Managing a force of call-center representatives remains a challenge, particularly when these companies need skilled, scarce engineers to answer complex technical product questions.

Trimble Navigation Systems Ltd., the world's largest global positioning device manufacturer, has tackled that problem with a two-pronged approach. Trimble, in Sunnyvale, Calif., has outsourced all incoming calls to Metro Messaging Services in Kansas City, Mo. It relies on its internal customer-service staff to field only emergency technical calls.

The outsourcer E-mails all non-emergency inquiries to Trimble, reducing first-line support calls to its staff, says Candi Faupell, global support project leader at Trimble. It then transfers only emergency calls to the staff. By reducing the number of calls that Trimble's technicians must field, they have become more efficient. Plus, multilingual call-center operators can translate the trouble tickets and pass them on to a technician who doesn't speak the language of the caller.

Although Trimble doesn't have to manage a huge call center, it does work to make sure that customer-service engineers are satisfied. That's why those engineers are rotated through various departments in the company on a regular basis. This gives the engineers a chance to see how everything works, which broadens their expertise, and lets them share their customer-service experience with other divisions. In some cases, the en-gineers have even ended up joining other departments, but that's fine with Faupell. "Virtually none of our technical support engineers leaves the company," she says.

Another important benefit of call centers is their ability to streamline operations. Rather than having multiple call centers independently and inconsistently run by various divisions, companies can rely on a single entity to manage call-center activity in a consistent way with a common network supporting it.

This was an important concern for Logitech Europe, which handles 10,000 to 12,000 calls per month in nine languages. From about 1983 until 1993, Logitech Europe's customers called local field offices for support, but customer service varied depending on the local manager's attitude. In addition, every time a field office moved, the phone number changed and manuals needed to be reprinted.

In 1993, the company decided to centralize call-center activity at its headquarters facility in Romanel-sur-Marche, Switzerland. Callers throughout Europe dialed local numbers, which were then routed over leased lines to the Swiss call center.

This took care of changing numbers and inconsistent support, but Laudensack says the lines were often filled to capacity and customers would receive busy signals. The carriers also suffered regular outages, which caused the lines to go down. Additionally, service from the national telephone monopolies was expensive.

Two years later, Laudensack and call-center manager Ben Gorter moved the English-language calling operations to an outsourcer in London with the intention of migrating service for all languages to that location eventually. But multiple languages proved to be too big a challenge, so Logitech moved operations again in 1998 with Sykes managing call-center operations in Amsterdam, the Netherlands, and Willhelmshaven, Germany. However, Logitech has maintained its Swiss office for call escalation.

The key to making the moves seamless to Logitech's customers was its selection of Global One (instead of Unisource and BT) as its pangeographic network voice-virtual private-network provider. "Once we had a carrier, we just said 'take care of the leased lines, public telephone system, and call routing,'" Laudensack says.

Global One also had network operation centers in all European countries, something that wasn't so common until deregulation of European voice carriers during recent years. "The most intriguing things happening in call management are the integration of all the various types of communications coming into call-operations centers," says Giga Information Group analyst Elizabeth Herrell.

Here's where the streamlined operations come into play: Global One's services include on-screen call intelligence. Operators can see the caller's country of origin, language, and time on hold, allowing operators to pick up calls in the correct language. It also lets Logitech move overflow calls to other centers, such as Switzerland or the new German-language facility in Willhelmshaven, without losing the caller's data.

Laudensack adds that another benefit is emergency coverage. "If our French-speaking operator is out, there's usually someone there that can take the information and calm the caller down until we can get it fixed," he says.

Clearly, though, total outsourcing can create some problems for businesses that want to offer a high-quality experience for their customers while at the same time gathering important data about them.

For instance, most companies don't like to surrender more customer information to third parties than they have to, so only necessary data is made available from the company's database. That limits what an outsourced operator can do. In addition, as much as companies like the idea of a crisp, professional call response, if there's no business presence on site, it's easy to lose touch with what's happening between customers and the surrogate employees.

Furthermore, customers calling into call centers are a prime avenue for up-selling products. About 70% of up-selling and reselling is initiated through call-center contacts, McKinney says. Companies can't always rely on outsourced call-center operators to take the initiative to boost sales.

Nonetheless, many global companies are growing fond of global call centers. A key reason why they have the option of streamlined, global call centers is because U.S. call-center operators have taken their call-center process expertise worldwide, where they compete with a number of other vendors, including Telefonica in Europe. "The United States is a few years ahead of Europe, and maybe five ahead of Asia," says Jean Kelly, director of the customer interaction solutions consulting group at WorldCom. U.S. providers have been able to take the lead in call-center products first because of the large consumer pool and deregulated telecommunications, she says.

But as the U.S. providers spread out, they're finding the need to adjust to cultural differences. For example, poor language skills aren't well-tolerated. Customers won't call a service center twice if the language skills aren't up to par.

Also, European callers expect operators to answer about 80% of their questions without reference, Laudensack says. European operators are trained on products for several weeks before they answer a call. In the United States, on the other hand, callers don't have such high expectations. Consequently, call-center operators don't know as much about products off the top of their heads and rely on their computer knowledge bases to provide the answers callers want. That takes a bit longer and often makes it difficult for the representatives to answer follow-up questions.

U.S. operators have discovered the time is ripe for expansion because of reduced regulations of national phone monopolies throughout Europe. During the past few years, competition has emerged, resulting in higher-quality service, more features, and lower prices. That's made it practical and affordable to develop feature-rich call centers throughout Europe.

"Depending on who you talk to, deregulation is either starting or ending now," says Laudensack, who points to recent partnership collapses and consolidations in Europe. Most of the new carriers don't have facilities across Europe, so the option is monitoring multiple relationships with multiple bills, or trying to pick a single transnational carrier.

Another driver in the expanding global call-center business is improved software. Call centers offer home-grown and third-party customer-relationship management software. The tools include in-tegrating E-mail and browser-based data from the client company's database, and co-browsing, which is a guided Web service in which the operator sees what the customer sees on the screen at the same time.

New software has enabled Trimble to move most of its support engineers out of the high-salaried area of Silicon Valley and into its offices in Christchurch, New Zealand, and Hook, England. In the process, Trimble has been able to convert to round-the-clock worldwide coverage and save at least 15% over its old system, which paid for the new software in six months, says Chris Quirk, Trimble's director of global support. These help centers have existed for several years, but they were set up to only handle regional calls during normal local business hours. When Trimble upgraded its data systems to cope with year 2000 remediation, it installed Remedy Customer Support software running over a virtual private network that allows the centers to work as a single, international round-the-clock support group.

All of Trimble's incoming calls are routed to the center in Kansas City. An operator there asks a list of questions and then either routes the call to an available engineer at one of the offices, or creates an E-mail in Microsoft Outlook that goes to the Remedy software on Trimble's business computer. Remedy creates a trouble ticket and puts the ticket into the help system, where any on-call engineer can pull the ticket for service.

Although Trimble and Logitech have outsourced pieces of their customer service, preferring to maintain control of some customer touch points as well as problem escalation, a new trend in outsourcing is emerging: fully-managed vertical service. One example is Percepta, a joint venture of TeleTech and Ford Motor Co.

Percepta will use Ford's customer-knowledge system, which was developed by Andersen Consulting, and TeleTech's worldwide network of call centers, says Don Sparkman, a VP at Percepta. It remains to be seen whether Ford's presence as a partner will begin to attract other car manufacturers to a vertical, international calling center. But Percepta was put to the test recently.

It took on the Firestone/Explorer recall crisis by opening a 350-person call center in Denver--in 24 hours. Sparkman wouldn't get specific, but he says a few large deals are in the works, adding, "We think other car manufacturers will see that an integrated, industry-specific, and rapidly scalable call center is the way to go."