The Future | Toll Free & Long Distance Services

You’ll find information about the coming together of call centers and the Internet. It’s impossible to leave the subject of buying telecom transmission services without saying something about what the Internet revolution will do to call centers.

Though I’ve focused on three carriers here, there are dozens more that provide advanced networking services to large businesses that include call centers. We are poised on the edge of a new networking world, one in which a bewildering array of higher bandwidth networks will be available for piping into your center. Frame relay,

ATM, xDSL, ISDN, all sorts of IP permutations — they are strange, and the market economics haven’t been worked out yet. I don’t know yet what combinations of voice and data traffic will win out, and which carriers will offer what two or five years down the road.

What I do know is that, as the pipe grows thicker and stronger and more varied, the cost of each individual call gets lower and lower. As I said before, it’s going to be the value-added services that differentiate carriers. It’s going to be harder to tell who is a carrier, as data networking melds with telecom. And it’s certain that some form of digitized packet-based traffic will be part of even the most traditional network, driving costs down and opening up new international dialing vistas. The moral: don’t box yourself in, get the best deal you can and prepare to turn on a dime when someone offers you something cheaper or throws a killer application on top of their core service.

What They Offer | Toll Free & Long Distance Services

In previous editions of this handbook, I detailed precise product offerings from the three main carriers. I’m not going to do that this time out, and here’s why. Information like that changes so rapidly that there’s no guarantee that they won’t have changed a brand name, feature set or pricing schedule by the time this book gets into your hands.

Instead, what you’ll find here are broad brush outlines of what kinds of things you can do with their services. Please don’t beat me up if you try to buy these services from the carriers and they’ve changed some from the way they’re presented here. For more details about exactly what they do offer, I recommend visiting their websites. In general here, I’m going to refer to these services as toll free, because that’s what call centers are most interested in. This isn’t a bias against outbound-based centers, it’s just a fact that inbound call routing is more complicated, a more feature-rich set of tools, and because it’s more expensive, you have to work harder to get exactly the right deal.

AT&T. AT&T has the most to lose in any competition for long distance or toll free services. By ridding themselves of Lucent, they said to the world that what they wanted to be was a transmission company, once again a true carrier rather than a phone systems company. And they did that after seeing exactly how cutthroat and expensive a battle for market share can be. So they must really mean it.

One of the more interesting things they’ve come out with is called Transfer Connect with Data Forwarding. Data Forwarding uses ISDN technology along with computer telephony integration to let your agents forward each customer’s data along with their calls. It lets the agent or voice response system that initially receives the call forward the customer information to the receiving agent. This information can range from name, address and account number, or application-specific data like frequent flier information, insurance plan specifics or personal IDs. The data instantly pops up on the receiving rep’s desktop.

They also offer Enhanced Announcements — essentially the ability to use the network to pepper your holding callers with promotional information. This is just one small way to use the power of the carrier network to manage calls. AT&T has tools that route calls based on caller input (what they call Recognition Routing), and those that let you balance loads between centers for optimum staffing.

Quick Call Allocator lets you make changes as often as necessary: routing percentage changes can take effect within five minutes, and your customers won’t experience any service interruptions. This feature is especially useful for call centers that have traffic patterns or staffing levels that constantly change — despite frequent fluctuations, Quick Call Allocator lets you maintain a superior level of customer service.

There are packages that let you route by time of day, geographic origin of the call (down to the exchange), and countless custom preferences that you set and reset any time you like.

Next Agent Available Routing lets you reroute toll free calls to up to 99 alternate locations if the primary location is “busy.” If the primary location is busy, calls are instantly rerouted to the first available termination, decreasing customer “on-hold” waiting time. You can customize NAAR to match your call volume needs: you determine what is considered a “busy” location by defining the Maximum Calls Allowed (MCA). You can set this value in advance and override it at any time. When the MCA threshold is met, all toll free calls will be automatically rerouted to an available termination.

With Network Queuing, you can automatically queue calls without investing in any additional equipment. This feature allows your call center to optimize call distribution and improve call completion rates. Calls can be queued for multiple call centers or for locations with a single queue. Network Queuing can help boost sales by preventing customer hang-ups and increasing call completion rates. Of course, you can do this with premise technology built off the ACD, so you have to plan in advance where you want your call control to be handled.

Sprint. Sprint’s basic toll free offerings are designed for companies whose calls terminate at one location. They are pretty basic, but they’ll suit the vast majority of single-site small- and mid-sized call centers. You get things like DNIS and ANI call identification popped to the agent screen. (A simple thing that can shorten calls by 10 to 20 seconds, and when you add that up, call after call, multiplied by dozens or hundreds of agents, that’s a lot of money.)

You can distribute calls across a trunk group (very rudimentary), and designate a secondary location for calls to terminate in case of overflow. Sprint also offers a Carrier Diversity program that helps manage and coordinate service provided by multiple carriers through a single point-of-contact. You can allocate calls to carriers by percentages you set or based on location, time of day, day of week and day of year. (Very sporting of them.)

More advanced service includes what they call Network Call Distributor, a sort of virtual call center facilitator. NCD collects activity information from each ACD in your system every 20 to 60 seconds. It then uses that information to automatically route your toll free calls to the best location at that time. They have another, similar feature that’s for Call Allocation, distributing calls to your toll free number across locations. You specify a percentage of the calls for each location, matching your call volume to each location’s capabilities.

SiteRP is something that’s been around since the early ‘90s, and it was revolutionary when they first came out with it. It lets you route your toll free calls on a call-by-call basis. You define the parameters, customizing the routing system to your specific needs. With SiteRP, you can identify new callers or repeat customers and route each to an agent trained to handle their individual needs. It was revolutionary because it was one of the very first times the carriers allowed call centers to manipulate the network themselves, using their local premise equipment. It was, in fact, a strong competitive feature until the others came out with similar services. This was the first sign that adding intelligence to the carrier network was a way around the free fall in per-minute pricing that went on through the 1990s.

MCI. MCI’s Enhanced Call Routing (ECR) product line provides automated voice response, voice processing, and call routing. It’s their network-based call handling service, and it doesn’t differ a great deal from those offered by the other carriers.

Since coming together with WorldCom, they have been much more active in connecting their data and voice networks, and creating odd and interesting service offerings based on that, than they have on upgrading their standard voice-only toll free and long distance services.

With MCI’s offerings you can move in baby steps from a call center with technology that is exclusively on-site to a call center with virtually no technology on-site. In between you can have some of your functions based in the network, while others are based in equipment on-premises.

MCI also offers extensive outsourcing and service bureau capabilities. From total management of a large call center to on-call service for weekend or holiday traffic, they can handle a variety of application sizes. Available services include direct response, customer service, help desk, order entry and fulfillment.

Toll Free & Long Distance Services | Call Center

After the center’s physical parameters are set, and the agents are hired, the most important element (at least from an ongoing cost standpoint) is the pipeline into the center. The toll free and long distance services that you choose will be so expensive, and yet so rich with features and possibilities, that it’s imperative that you choose carefully, and that you revisit your decision again and again for as long as the center operates.

Toll free service was once amazingly simple. You had one company to buy from, and very little leverage in the kinds of pricing plans and service offerings you could get. By very little, I mean: none. Companies didn’t begin to build call centers until there was a cost-effective means of making nationwide toll free calls, roughly thirty-some-odd years ago.

Wide Area Telephone Service, originally an AT&T creation, was the first iteration of toll free. It discounted long distance service, put the cost onus on the called party, and so began our journey down the call center road.

With divestiture and long distance competition, there were naturally more choices and the price of call center telecom began slowly to descend. And then, in the early 1990s, just as the three main long distance companies competed fiercely in a very public battle for the home consumer long distance market, a not-so-public but just as vicious fight for the call center market heated up, too. It was helped along by resellers and aggregators, which are essentially secondary marketers of long distance service. Resellers would buy bulk minutes from phone companies at a tremendous discount, and resell them at a very small profit margin, making money on the spread. Aggregators would combine the telecom traffic generated by lots of small companies until they were able to go to a phone company and commit to buy big packages of minutes, hence qualifying for the same deep discounts the telcos gave to their largest customers.

All these things worked to drive the cost of a long distance or toll free minute down past 10 cents, in some cases to as low as five. Of course, things are never as simple as they seem.

You almost never buy telecom minutes just bare — they are just the beginning of the process. It’s all in the value-add. What’s a long distance package without some kind of service assurance policy, for example, or without network reliability guarantees?

Or better yet, would you pay more per minute if the carrier let you manipulate the network according to your own traffic needs? Routing calls here for one reason, there for another — that’s a pretty powerful ability and they all have it.

What about being able to hold calls in the network, instead of queuing them up in your ACD? Or park them in the carrier network, while the net queries the ACDs at several centers to determine which one has the right person to answer the call? You can do that too. The more complex the routing dynamic, the more likely it is that you’ll have to go to someone other than the carrier for the actual software that makes it work, but the carriers are now eager to help hook you up. (They were not always so eager; phone companies tend to be less than far-sighted, as technology companies go.)

The carriers have also experimented, with mixed results, with services that actually perform transaction processing, even fax processing, in the network. It’s like having an outsourcer handle your calls and your transactions, but there’s no actual outsourced center; it all happens automatically.

They want you to take advantage of a lot of these advanced services, whether or not they provide the mechanics, because quite frankly, call centers are a gigantic consumer of telecom minutes. The more time your callers spend hanging out in their networks, the better off they are.

Add to that one other critical reason. If you posit the notion that long distance and toll free are pretty much the same from carrier to carrier, that Sprint, MCI and AT&T are all equally reliable, clear, inexpensive and available, then what keeps you from hopping from one to another at the drop of a hat? They hook you by getting you to buy ancillary services. I can foresee a day when the value-added services are more important to the carriers than the presentation of transmission minutes, and they end up giving the minutes away to their best customers as a loss leader. Especially when we enter a world with packetized networks and all sorts of alternative transmission methods that reduce the actual cost of moving a call from here to there to effectively zero.

So what was once simple — buy on price — has become complicated. But wait, there’s complexity on another level. Until 1993, if there was a particular phone number that you wanted to have in the 800 toll free code, you had to buy service from the carrier that had custody of that number. You had no freedom to change carriers and bring your number with you — if you had significant brand equity built into your number (800-CAR-RENT, for example, or 800-MATTRESS), you were stuck.

Until 1993. That was the year that 800 Portability reorganized the way 800 numbers were given out, and changed the whole dynamic of how you acquire and route 800 numbers. Portability meant (and still means) that you have custody of your toll free number. You can keep it if you want to change carriers. This, of course, gives the carriers added incentive to serve you better, to offer more interesting features in their toll free networks to keep you as a customer, now that you’re not a hostage.

Remember also: they need your business. Call centers are monster consumers of toll free and long distance service. They will make deals with you. If they do not serve you well, you can and should leave. In fact, you should absolutely have arrangements with at least two out of the three main carriers for your core service. At a minimum, that protects you against service outages. But it also allows you to compare, month by month, the offerings and prices they charge.

At first there was a lot of concern (generated by AT&T, in part) that portability would cause degradation of service (especially longer call set up times) because each call to a toll free number has to be passed along a more complicated pathway to query a database and determine which carrier routes it before it can be connected. Happily, those problems never materialized. Portability became part of the competitive landscape, and I think was a strong factor in the rush to grab 800 numbers a few years back. That rush, in turn caused the 800 number series to run out and forced the opening of first 888, and then long before anyone thought possible, another series, 877. (Other reserved series are warming up in the bullpen.)

Portability made toll free an intelligent network application. Users with multi-site centers who wanted features like Least Cost Routing, or sophisticated queuing options benefited immensely. Many of these services are expensive, though. In some cases they can add as much as 50% to the cost of a call, putting the options out of reach of many small and medium sized call centers. High volume users have been the main beneficiaries of price-cutting and volume discounts, leaving smaller users with higher costs and no appreciable gain in service.

Through bundled consulting plans and alliances with hardware manufacturers, the three majors are trying to be more to you than just a series of trunks and switches. Offering everything from complete outsourcing of your center to simple “press one for” service, phone carriers are providing more options for call centers than ever before.

Will the call center of the future be paying for carrier services by the transaction instead of by the minute? This is just one of the possibilities raised by the brave new world of call center offerings from the three major long distance carriers.

Future Design | Call Centers

As call centers focus more intensely on retaining their best agents and reducing turnover, human issues will come more to the fore in designing (and redesigning) call centers.

Centers will include more “community” areas: conference rooms, training centers, even classrooms. And as call centers begin to respond to more than just traditional voice phone calls, expanding into areas like email and Web response, as well as possible video calling, the kinds of workspaces that will be required will undoubtedly change. The smart design team will take these things into account now, because a call center is a five to 20 year commitment.

The best way to ensure that a call center is ready to accommodate your needs in 2010 is to allow for substantially more layout flexibility than is typical today.

Components that should be considered include:

• Uniform, ceiling mounted indirect lighting systems that are layout-independent.

• Furniture literally on wheels or furniture systems that can be reconfigured overnight.

• Raised floors that allow ultimate cabling flexibility.

That way, the call center will be completely adaptable to any changing business circumstance, whether it’s driven by new technology, new ways of operating, or changing company cultures and ideas.

The Existing Center | Call Centers

Those ideas are fine, if you’re building a center from the ground up. But what if, as is more likely, you’re rehabbing a center that’s been around for a while, or outfitting an expansion of a center?

Luckily, there are still plenty of facilities factors under your control.

Lighting. Indirect lighting is the best if you can afford it, if not you should use florescent pink tubes and parabolic lenses. These lenses diffuse light straight down to eliminate glare. Full spectrum fluorescent tubes are available from some manufacturers that give a natural sunlight-like illumination.

Full-spectrum lighting is color balanced so there’s no yellow tint and less glare than with florescent lighting. The tubes fit into existing fluorescent fixtures.

Noise. Nothing is noisier than a roomful of people all talking at once. It’s hard on the employees, and it makes callers think they’re calling a roomful of people. There’s nothing so unprofessional as a call center that sounds like a.... call center.

If you want both the caller and the rep to feel more comfortable, try acoustic wall paneling, and if funds allow, white noise machines to diffuse noise. Using sound-absorbing foam or tiles on the ceiling, walls and other soft surfaces, and carpeting, keeps the sound from bouncing around. Plants are also good for the air and absorbing acoustics, but that’s a minor fix at best.

What some centers use are the same kind of foam tiling found in recording studios, though this can give a closed-in look to the place. In a cubicle environment (which most call centers are), talk to the manufacturers of the workstation units themselves about what kind of acoustical absorption properties they build into the wall coverings.

And of course, noise-canceling microphones in the headsets will help keep the apparent volume down, though that’s not strictly speaking a facilities question.

Seating. Your full-time agents spend at least seven hours a day at their cubicles sitting. The chairs you choose mean a lot. A chair affects posture, circulation and pressure on the spine.

I recommend chairs with height-adjustable armrests, split backs that hug your back (to relieve pressure on the spinal column), a moveable seat and an adjustable back angle.

I’m not saying you have to go out and buy everyone a $1,000 Herman Miller chair, but don’t put your agents in a $39 OfficeMax special, either. That’s putting you on the fast train to a high turnover rate.

Monitors. The top of the screen should be at eye height or slightly below and about 18 to 24 inches from the eyes (30 inches if you are concerned with electromagnetic radiation and your monitor is unshielded). The monitor should swivel to help reduce reflections. Once again, this is a small thing, with a really minimal added cost. But buy them the biggest monitor you can, especially if they’re going to be looking at a screen that pops a lot of critical customer information into a lot of tiny windows. The larger the monitor, the larger you can make the type in all those tiny windows. Seventeen inches ought to be the minimum.

Wall height.High walls between employees reduce noise, but they also cut agents off from one another and reduce collaboration. Sometimes the best way to deal with a call is to lean over the partition and ask another agent.

In the past, it was also important that agents be able to see a centrally hung readerboard. Now, with scrolling screen tickers full of ACD info, you’re not so dependent on that, so you can consider not only higher walls but a less formal cluster organization of the cubicles. One generally accepted height is 42 inches. That gives a certain amount of privacy without shutting the agents off from what’s around them.

Agent input. Agents ought to have some say in how call centers are designed. They’re not the only ones who benefit when you give them input — managers and supervisors get happier, more productive employees and fewer compensation claims.

Today, more and more call centers are collecting input from their employees before buying workstations, for the simple reason that they want to keep those employees as long as possible. Because call center agents must perform repetitive phone and keyboard tasks and spend all day (excluding breaks and lunch) at their desks, using ergonomic equipment is crucial. You’ll get happier, healthier and more productive employees. In the long run you’ll save a bundle in time and money since you’ll have lower turnover and better morale.

Considering there are more employees suing now than ever before for repetitive stress injuries (reported incidents of RSIs are higher than ever, accounting for 60% of all occupational illnesses) there’s no better time to offer courses in prevention and/or re-evaluate your center’s set-up.

The workstations. There are a lot of options in buying and coordinating the placement of the actual seats where agents will do their work. I’m not talking just about cubicles here; call center workspaces are carefully designed and constructed for the particular needs of this industry by a number of specialty companies.

This kind of thing is often overlooked, or put aside as managers think more about the critical (and expensive) technology and hardware they need. It’s easy to forget that labor is the single biggest ongoing expense in a call center. Intelligent workstation design is an easy way to reduce costs over the long term by keeping turnover low and employees happy. The type of workstations you choose can facilitate team building or discourage it.

There are three types of workstations: the cluster, a pinwheel like setup with four to six work areas sprouting from the core in the middle; the rectilinear, a traditional panel system with four wall panels at each station set up in rows; and the modular or free-standing workstation.

One vendor says that cluster workstations are beneficial to companies, like large catalog or insurance companies, which need to put many telephone- and computer-intensive workers in the same room. That’s because clusters let you fit more people into less space, but the people don’t feel cramped.

In fact, the cluster arrangement lets you save 10% to 25% of your floorspace and doesn’t give you that mousetrap/maze effect that rectilinear workstations sometimes create.

The gentler floor plan makes it easier for people to walk through the call center and between groups, fostering teamwork.

One downside to the circular workstation arrangement is that the partitions between stations are sometimes too high, making communication between agents on the telephone difficult. With the cluster it’s easier to talk between workstations, but hard for people to come in.

Rectilinear, or panel, workstations are a good choice for centers that need more space for each agent or that need more flexibility in panel and desk heights. The design of a center around these stations is more forgiving, and easier to change as conditions change. The work surface can be moved between notches in the side panel to accommodate wheelchair-bound agents or agents of different heights. Rectilinear workstations are popular choices for engineers, managers, people who need extra room for storage cabinets and anyone who has conferences with co-workers. You also find this the preferred style in technical support centers, where the reps have to refer to a lot of external materials — binders, reference manuals, and so forth. The type of workstation you choose should complement your company’s team-building style.

• When evaluating workstations:

• Look for a style that’s easy to install and reconfigure. Look for something that doesn’t have too many parts and pieces, but where you can add overhead shelves and in/out boxes.

• Make sure the equipment can be connected within a panel, rather than to a box that sits on top of a desk.

• Buy through a local dealer so you’ll have nearby on-going support. And a dealer can help with things like placement of workgroups for departments who need to communicate regularly.

• Look at it as a strategic investment. Chances are, you’ll have it for the next ten years, so you don’t just want to look at price. It should be pleasant and functional.

• Get panels with metal frames because they’re more durable than wooden ones. Also, get fabric panels that can be re-covered if damaged. And again, examine the acoustical properties of those panels.

What Affects Design? | Call Center

The ADA. The Americans With Disabilities Act (ADA) is a federal law that can affect call center design. Most important, the ADA is civil rights legislation, not a building code. You can’t get around it by moving from one location to another. It’s also very vague, forcing you to go out of your way to respond to whatever circumstances present themselves.

Some states have building codes that require ramps, accessible restrooms and other accommodations for the handicapped. The ADA does not require you to have any of these things — but it does make it illegal to reject a qualified applicant because your facilities are not accessible to him or her.

That means that you have to plan ahead. You have three choices. You can put these facilities in at the beginning, when it’s going to be the cheapest and least disruptive. You can put them in when you find you need them, that is, when you hire someone who needs them. Or, you can ignore them completely, and face the lawsuit.

Sometimes teleservices firms find out too late that their choice of workstation doesn’t accommodate a wheelchair or a random floor plan makes it difficult for a blind TSR to get around. Good call center design recognizes the relationship between people and the physical constraints of the workplace.

Safe work environment. Human safety should be your first priority. Make sure everything is fire resistant, that the exits are appropriately open and marked, and that all fire safety regulations are followed. And that call center personnel are aware of fire safety procedures.

This is so basic to facilities design I shouldn’t have to mention it. But I will anyway.

The call center’s application. For order entry applications, for example, one expert recommends at least 35 square feet for each person’s workspace. But for customer service, you might need more, up to 45 square feet. That’s because service and support reps often have to refer to manuals, documents, and other peripheral materials that should be stored within easy reach.

You’ll also want to account for the number of people in groups or teams, and the position of supervisors and team leaders. You’re going to need room for meetings, for example. And you’re going to need semi-private call center stations that can be isolated during training or coaching sessions.

Corporate cultures may dictate particular placement, and that too should be recognized when planning the layout.

The relationship to other departments. Remember, once the center is active, you’re going to be watching the length of calls as a key component of costs and productivity. If call center agents are running up and down halls to another part of the building regularly, you didn’t plan well. If they need to be in constant contact with the fulfillment department, for example, work that out ahead of time.

If you can’t physically bring the two departments any closer, then explore some kind of automated networking solution that will tie people and systems together — that may alleviate some of the distance trouble.

What support systems do you need? Will you need a cafeteria? Consider long term plans and the company-wide flow of traffic. How many conference rooms will you need? Where is the copy room, the time clock? Will you have central or local filing?

All these questions must be answered in advance. But it’s critical that these questions be answered by call center management as well as by the architects and the company’s upper management.

Facilities & Design | Call Centers

The furnished environment your agents have to work in for four to eight hours a day affects their attitude more than whether the technology they are using shaves a few seconds off call duration. Their comfort, or discomfort, within that environment has an undeniable effect on the way they deal with customers. And of course, on turnover, which affects long term hiring and training costs.

But there’s more to call center design than picking out pretty colors and sleek workstations. The right call center furnishings can help the work get done faster and better. Employees are happier, they are out sick less, they sell more and serve your customers better. Here are some of the important factors that go into a successful design.

One thing I’m not going to get into here will be networking and cabling. This is a thorny issue, and one that changes as frequently as any other technology outlined in this book. Suffice it to say, make sure of these three things:

1. You choose workstation units that allow easy access to cabling and phone wires.

2. Your architect and design team are fully aware of the kind of voice and data networking that you want to install, and that they are sensitive to the peculiar needs of expensive telecom and computer equipment. (In other words, don’t put the ACD in a room next to the HVAC system or the cafeteria).

3. Whatever your wiring plant, make sure it’s upgradable without having to rip apart floors, walls and ceilings to do it.

It’s also been argued by some architects and designers that the physical layout of the call center can have a direct effect on a company’s profitability.

One study done in 1990 of 70 million square feet of office space found that the cost to build and maintain office facilities is only 15% of the total, with the remaining 85% going to salaries. The argument would then go that, if you focus the design so as to have as beneficial an effect as possible on the workforce that comprises that 85% outlay, you can make the business case to spend more up front on layout and design with the expectation of back-end savings. Substantial research has been completed that demonstrates the effect design can have on increased productivity of building occupants.

Times have changed. In the past you could say the chairs, the lighting and the design of the workstation were the most important elements of call center design. Those things are still important, but issues of health and safety are increasingly on people’s minds these days. Yes — even in call centers.

One architectural firm I spoke to ballparked the cost of fitting out office space for call center use as ranging from $22 to $38 per square foot. Assuming the average cost of $30 per square foot is borrowed at 9.5% for 10 years, an increase in the staff productivity of 15% will pay the debt service for the entire construction cost necessary to improve the space for call center use, they say.

Locations That Want You | Destination Call Center

United States. Where there used to be definite areas within the US that were call center-friendly, these days there’s no real reason why one area is better than another. At this point in the booming economy, few areas are so depressed that they can supply a steady stream of workers at low cost. But for sheer volume, the south and southwest seem to attracting the most centers.

Cities like Las Vegas and Phoenix have surged in population, and in the number of new call centers taking up residence there (or in the surrounding suburbs). There are few good studies that show where call centers actually are; instead, they tend to show where centers could be, focusing on relative cost between regions. So I tend to rely on anecdotal evidence to tell me which areas are more “popular.” It’s important, then, to keep in mind that most companies that run call centers don’t call a lot of attention to their centers. The industry has an imprecise sense of where the centers are clustered.

There are clusters in the Midwest and upper tier of states, through Iowa and Nebraska, South Dakota and Kansas. The states in this region have historically worked hard to attract centers with incentives and on-the-ground assistance getting facilities open and running.

The move to the Sunbelt is a late 1990s phenomenon. It’s driven by lower costs for real estate and (I think) the same thing that keeps people moving into those regions — good quality of life issues, lower cost of living than in the cities on the coasts, lower taxes and the perception of more business-friendly authorities.

Within the US, though, there is a greater diffusion of centers than ever before. The factors that go into call center site selection now include one that was relegated to the bottom of the list ten years ago: corporate convenience. With telecom plentiful, labor expensive and real estate a non-issue, you can put your center near an important client, a critical supply warehouse, a distribution point, or the CEO’s summer house.

Canada. The Canadian call center business is not just an offshoot of the American industry. It’s a strong, growing industry in its own right, capable of serving both the domestic Canadian market and the cross-border North American market. Also, you can take advantage of a completely open border, a citizenry with a high education level and a multitude of language skills.

Ontario, the nation’s largest province, is host to many centers. One city, Welland, is home to Canadian Tire Acceptance, a dispatch center for roadside towing assistance that serves (mostly Canadian) customers through an 800 number accessible in either the US or Canada. Ontario boasts that its province-wide payroll taxes and benefits costs are, on average, 37% less than in the US. This disparity can work in the favor of an American company looking to reduce costs by opening a new center or relocating the functions of an existing center.

Farther west, Manitoba has, since 1993, been very active in trying to attract new call centers to their centrally located province. Manitoba’s position just north of the American upper Midwest is perfect for telemarketing to and from both coasts, which was a lot of the rationale for the industry to thrive in the American Midwest. If you need full time zone coverage, you can function just as effectively in Canada as you do in Omaha. Winnipeg was recently the site of a new 500-seat center built by Air Canada.

As an example of the kinds of incentives available, the airline launched the center in cooperation with the Call Centre Initiative of Manitoba and the City of Winnipeg. The provincial government assisted with start-up and training costs by providing a $3.5 million forgivable loan through the Manitoba Industrial Opportunities Program. In return, Air Canada committed to create 500 new jobs over three years.

In the east, New Brunswick and Nova Scotia have emerged as strong sites for call centers, based on what are reported to be an extreme cost differential between those provinces and the mainland US. NB Tel (the carrier in New Brunswick) cites a recent call center study, which showed that centers in that province can cost up to 50% less to operate in than other locations. They also claim that New Brunswick call centers pay the lowest workers’ compensation rates on the continent.

One of the most important factors in the development of this industry is the aggressive support of the New Brunswick Government. A direct stakeholder in the call center industry, the government encourages businesses to move to New Brunswick by offering high-level call center training courses. Call centers are reportedly the province’s fastest growing industry.

NB Tel partnered with Genesys Canada to offer a technology package that includes a network-wide call center solution called Enhanced Call Center Solutions (ECCS). This offers a multi-tenant call center provisioning platform that delivers a number of enhanced call center services such as screen pops, intelligent call routing and predictive dialing to centers of various sizes, technology platforms and geographic locations. Wherever you are in the world, you can access complete call center functionality using regular telephone lines.

Europe. How big is Europe’s call center market? Around $9 billion, according to a report from the Pelorus Group entitled. European Call Center Markets Great Britain, France, Germany and Holland together accounted for 80% of call center sales revenues within the 15-member European Union.

During the five-year period from 1999 through 2003, sales of call center systems among those Big Four will total more than 1.8 million seats, over $3.6 billion in base revenues, and over $9 billion in gross revenues.

This growth is happening unevenly, and that has a lot to do with the fact that some countries had a head start over others going into this period of expansion.

Their findings indicate that despite the creation of a single, continent-wide currency system, there has really not been a single continental market for call center products. Vendors still have to treat the various countries as what they are — separate entities each with its own tendencies and its own market idiosyncrasies.

Of the four markets, France remained the least developed for the longest time. In the 1997-1998 period, however, it began making up for lost time, and a far larger, more sophisticated market finally began to emerge.

Germany has made the greatest strides in the shortest time. Around mid-decade its limited and over-priced marketplace for call center products fell to an invasion of advanced solutions from abroad. Since then Germany has climbed into the lead for numbers of system sales. It continued to trail Britain in total seat installments and revenues, however, due largely to the more robust high-end segment of the British market.

Meanwhile, Holland’s call center market should continue to show surprising strength for a country its size, due in large measure to the sophistication of its users. It will be a market heavily driven by the under-40-seat range, the report says.

If Europe’s your goal (as it often is), the first question an American firm should ask itself is this: do I need a pan-European center, or do I want to target my center to a single country’s market?

A pan-European center requires you to staff up for calls in a multitude of languages. You’ll need switches and software that can handle skill-based routing, and probably a voice processing system to offer language-based prompts.

Another option is to identify the call’s originating country using the phone network itself. The advantage is that it’s more transparent to the caller if your rep answers right away in the language of the caller, without voice system intervention.

What are your options in Europe? You have several really good ones. The top-tier countries are already so similar in the quality of their telecom, that they are differentiating themselves on the basis of pricing, incentives, multi-lingualism and local regulations that help (or hinder) call center activity.

For a while, Europe was divided into two camps: those countries that had an active effort to attract call centers, and those that couldn’t see the benefits and did nothing. Ireland, the Netherlands, the UK and Belgium formed the core of the first group, France and Germany the second. Now both France and Germany have awakened to the facts of life, and are trying hard to attract call centers, particularly those that serve the lucrative pan-European market.

A couple of years ago, Belgium went to the trouble of building a dedicated facility for call centers, called variously Brucall, or the Call Center Hotel. It was designed as a semi-official outsourcing portal, a place for companies to come and park their centers at preconfigured workstations.

Other countries have had more success attracting outside business, notably Ireland and the Netherlands. In Ireland’s case, they built upon the country’s solid education system, the fact that everyone there speaks English, and the structurally high unemployment rate. Ireland has functioned as a point of entry into the European market for many high profile American companies, for call centers, but also for other kinds of back office functions like data processing.

And the Netherlands has carved out a niche serving companies from Europe and the US that want to serve the continental market from a single center, using agents skilled in multiple languages and a layer of multilingual technology on top of that.

For its part, the UK has prospered because it has a strong domestic call center industry of its own — by some counts, as many as 3,000 to 5,000 call centers focusing on British customers (although it is impossible to know for sure).

The Americas. One of the great open-ended questions of the day regarding call centers is how deeply the North American industry model will penetrate into other emerging markets, particularly Latin America.

For example, El Salvador is grappling with that question right now, as it tries to attract outside call centers as a way of lifting its economy.

The possibilities are tantalizing. On the plus side, the Latin American countries offer a Spanish-speaking workforce to answer calls from the US or Latin America. But there are high technological, human and business hurdles that stand between them and this clean, efficient industry. It seems to boil down to jobs: call centers provide plenty of them, and they’re not bad jobs, as jobs go.

Despite the tax incentives a locality has to dole out, attracting centers boosts a tax base through more skilled workers, and the ricochet of their spending through a local economy.

Outside the US, it’s led countries like El Salvador to an interesting crossroads: does it make more sense to develop a domestic call center industry, or should they try to become outsourcers to a larger market, like the US? Or a mix of the two?

The country has several mid-sized call centers already, mainly in banking and for the national airline’s reservation system. (A million Salvadorans in the US generate a lot of phone calls for flight reservations.)

El Salvador has been making the case for some time that it is a desirable location for an American outsourcing company to open (or take over) a center that would answer calls from either the US itself, or from the wider Latin American region.

The idea behind that is the same as building a shopping mall — you want to have a big name as the anchor tenant, so others will feel comfortable moving in. The El Salvadorians have been negotiating with a couple of the big names in outsourcing, but so far nothing has been signed.

Mexico has had the most success so far, with both a domestic industry and a cross-border business answering calls for the US Spanish-language community.

Other areas like Puerto Rico, Jamaica, possibly Brazil and Argentina have shown signs of joining the international call center industry.

Asia and the Pacific Rim. Call center companies (both those on the user and vendor sides of the fence) often disregard the Asian call center market as either too complex or too undeveloped to merit wide attention. That seems like an increasingly wrong-headed view, as both the Asian and the Australian call center industries have burst into flower in the past few years. These are industries that are not necessarily carbon copies of the strong American industry — they have adapted North American call center tools and techniques to the unique qualities of their particular markets, just as the non-English-speaking European industries did in the 1990s.

Now comes word from a Frost & Sullivan report (entitled Pan Asian Call Center Hardware and Software Markets) that the Pan-Asian market is growing at a rapid clip, driven by intensifying competition following the deregulation, privatization and liberalization of the Pan Asian call center hardware and software markets.

“Corporations are realizing the importance of customer service as a competitive tool in this new market environment,” according to Frost. “The driving need is to provide superior customer service by deploying high-end applications and call center solutions,” they go on.

According to the research, this market produced revenues of $272 million in 1999. By 2006, those revenues are predicted to reach $946.9 million.

“Proactive operators have realized the benefits of implementing call center solutions and have invested aggressively in the same,” say the analysts. “Educating potential customers and changing their perception regarding call centers as cost centers is a key challenge.”

One of the things they found (that mirrors very closely what’s going on in the North American market) is that it’s hard for the very specialized vendors to stay competitive. They are being forced to look at strategic partnerships that enable larger vendors to offer “end-to-end” or turnkey customer care tools. This is much like the CRM/email/Web-integration scramble going on now among the former CTI companies in the US.

To a certain extent this only matters to the companies that want to sell more stuff to hungry call centers. But it’s an important barometer of the degree to which the Asian market, so long considered an “emerging” call center market, has become an actual one.

Not surprisingly, Australia is the most popular destination for US-style call centers in this area. There are strong ties to American vendors of equipment, and numerous outsourcers have set up shop Down Under, taking calls for both the Australian domestic consumer market (often tied to US or European companies) and as a jumping off point for other, smaller markets.

Other areas of note are Singapore, which has a highly regarded telecom infrastructure and the Philippines (noted for its inexpensive labor and favorable pro-business climate). Japan, despite its highly developed economy and world-class telecom, has not been used by American or European companies as a call center gateway (perhaps because of the high cost of doing business there).

India. Broken out here separately because of the tremendous changes that have been going on there over the past few years. For several reasons, this area is worthy of special mention.

Since 1999 the market for call center services in India has been exploding — reports of new companies making software and offering services to both the international and domestic markets came fast and furious.

To get a better picture of what’s happening in that huge and technologically sophisticated country, I asked Ritesh Srivsatava, international marketing manager of PARSEC Technologies to answer some questions by email. PARSEC is a company that offers both products and services, with more than 4000 CTI ports installed in India.

KD: Generally, what is the state of the domestically focused call center industry in India? Are Indian consumers used to using the telephone (and other electronic interaction methods) for customer service and sales support?

RS: Yes, and increasing very fast. Mobile phone growth is also taking off, with SMS services already offered, and WAP being offered shortly. Indian cellular service providers like AirTel, Essar cellphone, Fascel and Hutchison Max are already testing WAP services in the country.

KD: How large is the Indian call center industry? Do you have any sense of the number of call centers or the number of people who work in call centers?

RS: CTI-enabled call centers (true call centers) - 25. Non-CTI, 300-500. According to the National Association of Software and Service Companies, GE Capital International is employing over 1,000 people in its call center in Gurgaon near New Delhi.

KD: Is it fair to say that the call center industry is externally focused, that is, it exists right now to serve markets outside India?

RS: Domestic companies are becoming more consumer focused now. For example, Whirlpool, the global white goods manufacturer, is setting up 5 call centers, Kotak Mahindra — which is India’s largest financial services company — is also setting up 5 call centers.

Educational Institutes, like KarROX and North Star are setting up call center institutes that will provide agent training. Third-party call centers, like Cybiz Call are mushrooming all across the country to provide various services to the customers of small and medium companies who cannot afford to set up their own call centers. Cybiz Call is establishing a network of 35 franchisees across India. ISPs, like Dialnet are setting up centers. Hence, a range of segments is highly recognizing the need of call centers to service their customers.

The offshore business is big but the Indian domestic business is also growing rapidly due to increased competition and hence focus on customer care.

KD: How deeply linked to other back office functions (like data processing) is the Indian call center industry — from outside, it looks as though many of the companies offering call center services began by offering services other than call handling. Is this the case?

RS: Not much. Medical transcription centers essentially have a lot of the infrastructure needed for call centers so there is a synergy there. In financial companies like GE Caps, there is back-end processing also. But that is an exception, not the norm. Back office operations are typically difficult to outsource because of data security issues.

KD: What are the advantages that an Indian call center can bring to a prospective customer outside the region? How do you make the case that an Indian company can do the job for an American or European (or other regional) company, despite the geographic remove? Is it based on labor, or technology, or some other factor(s)?

RS: Some of the factors include the booming IT industry, the largest English-speaking population after the USA, a vast pool of skilled labor (English speaking, and numerically literate), and a low cost of workforce. With overhead, a call center agent costs between $50-100K per annum in the US; in India that would be $10k, plus add $20k for telecom costs and higher infrastructure costs — this means a prospective saving of $20-70k per agent per annum. This saving can be split among the call center and the customer. These are some of the advantages India offers to attract foreign traffic.

Another big potential area is tech support. India graduates about 100,000 engineers each year. These can be used in call centers for troubleshooting/tech support, as the salaries are dramatically lower than in Europe or the US.

In fact, one company in India proposes to hire 300 Ph.D.’s to provide very high-end consulting over the phone/videoconferencing. Given these advantages, India could build a $17 billion industry by 2008 according to the NASSCOM McKinsey Report.

KD: Your estimate of the number of call centers seems small in comparison to both the size of the nation as a whole, and other English-speaking markets, like Australia, UK and Canada that have small populations. Is India playing catch-up, and if so, what will it take for the Indian industry to become a major player in the world market?

RS: India lags behind because of poor infrastructure. Telephone density is about 3 per 1000 persons in India. Better telecom infrastructure is a key requirement. Poor reliability, limited bandwidth, high price, and limitations in service make us fall short of current global standards. Apart from that, customer service was a low priority area for Indian companies due to a protected market, red tape and lack of competition. Now things are changing, customers are more demanding.

To follow up on these lags, the Government of India has taken a big step towards a National Telecom Policy. There is a strong commitment to create a strong independent regulator, set up hi-tech habitat centers, build a high speed national backbone, provide competitive international services and remove restrictions.

KD: Increasingly, it appears that the US/Canadian/UK/ANZ call center markets are becoming more integrated through networks of outsourcers, technology suppliers and shared information resources. Does the Indian domestic industry stand strongly alone, or is it trying to become part of this worldwide English-speaking industry?

RS: India is looking to be part of that network. There are already networks being planned by several Indian companies, which span technology, services, training etc.

In fact, PARSEC is very soon setting up a single stop solution and 24 x 7 services for teleservices outsourcing for dot-coms and conventional businesses. PARSEC’s delivery network would be based on an Internet-Native architecture capable of handling conventional and Internet telephony, email and Web. PARSEC has a dedicated agent pool who are domain-trained and are servicing blue chip customers. To ensure guaranteed service levels PARSEC would adopt the best-in-breed delivery processes through the right HR and Quality processes.

KD: As a corollary to that, which is larger — the domestic English-speaking call center industry, or the domestic industry in other languages? Does the distinction even matter?

RS: Currently the English speaking market is bigger, but the distinction does not really matter as English is the language used by business in India.

KD: Does the worldwide move to Web-based contact centers give the Indian market a chance to grab a bigger share of the international customer contacts and build a reputation among multi-national companies?

RS: Yes, online companies are looking to outsource customer contact operations to countries like India. India is gaining a high degree of acceptance to set up international call centers.

GE Capital International services is servicing its international clientele from Gurgaon, India, employing over 1000 people and is soon setting up another one in Hyderabad.

Also, companies like Spectramind are servicing the email queries of dot-com companies from the US in Delhi. Their dot-com clients receive half a million queries every month. Half of them go unanswered. Spectramind is creating a human interface to it. This capability is a great opportunity for India.

PARSEC is also helping two other third party call center companies set up international call centers. PARSEC will provide business, infrastructure, technology and manpower to them to service international customers from India. One is Phonesys, which is setting up a 100 seat call center that will handle outbound calls for telemarketing and credit chasing for its client’s customers. The other one is Call Center India Ltd., a third-party call center that is setting up 16 agents and will migrate to 96 agents within three months of its inception. They will handle outbound calls for marketing websites.

KD: How about technology providers? Does the Indian call center services market look to domestic hardware and software companies for their infrastructure, or do they look to the standard US/UK companies for things like switches and software.

RS: Currently US companies dominate. But Indian companies are catching up, especially in software.

In fact, PARSEC Technologies is a pioneering leader with expertise in providing Server Based Call Center solutions. It is India’s leading and fastest growing provider of the technology in the Computer Telephony industry and has the largest market share in the voice mail systems market in India

That interview, conducted early in 2000, just scratches the surface. I’ve become convinced that India will become as important to the customer contact industry between 2005 and 2015 as Ireland, Canada and the Netherlands were in the 1990s. Some examples of why I think that:

• FirstRing, an interactive call center and ecommerce customer care provider, implemented the first phase of Interactive Intelligence’s communications software solution. The solution automatically routes calls between FirstRing’s headquarters in Sterling, Virginia and its customer support center in Bangalore, India. FirstRing selected Interactive Intelligence because it offers a cost-effective, single-vendor contact center solution that simplifies deployment and support.

  FirstRing expects the new solution to result in up to a 50% reduction in costs for its ecommerce customers via optimal capacity utilization, access to up-to-date customer information, redundancy and security features, and management information tools. FirstRing focuses on servicing Fortune 100 and 500 companies, and currently supports five customers in the US. The company will use the new solution to service calls originating in the US with its professional and semi-professional Indian call center representatives.

• The tool lets calls be automatically routed to the FirstRing site with the most appropriate resources. The solution also provides screen pops to FirstRing agents, giving them vital customer information simultaneous with the call. Predictive dialing features are expected to increase agent productivity, along with built-in features like Interactive Voice Response (IVR) and Fax-on-Demand service.

• Also, one of the major US outsourcers, SITEL Corporation, formed a 50/50 joint venture with Tata International, a part of Tata Group (India’s largest group of companies), to be called SITEL India.

• The new company will provide Web-enabled contact center services from India. The venture will provide technical support and customer care for English-speaking customers throughout the United States, United Kingdom and other English-speaking countries.

• Initially, SITEL India will provide customer care and technical support services using email and Internet-based chat solutions. The venture will add telephone-based channels of communication by the first quarter of 2001. The services of the joint venture will be offered to clients of both SITEL and Tata.

• Together, SITEL and Tata plan to make the investment required to deliver world-class services from India, using state of the art technology and operating practices,” said SITEL ceo Phil Clough in a statement. “Through SITEL India our clients can accelerate their ability to access this wonderful labor market and reduce the risks associated with operating in an offshore environment. India has over 300 million English-speaking inhabitants, a booming IT industry, and a vast pool of skilled labor to draw upon. Operating in India also helps us provide these valuable eCRM technical support services on a 24-hour per day basis. It is a win for everyone.”

• NHancement Technologies, a provider of unified communications and unified information technologies, has implemented a worldwide intercontinental call center operation (the company’s second), with Falah Information Technologies Ltd., an Internet call center business located in Bangalore, India.

• Falah is currently building a 40,000 square foot center to international standards that will service customers worldwide with technical help desk support. It is located in the heart of Bangalore, commonly noted as the “Silicon Valley” of India.

• The NHancement application simplifies the call center transfers between a point of presence (POP) in the United States and that of the call center in India. The center will support 250 agents upon deployment. The solution is being implemented in conjunction with Interactive Intelligence Inc., a developer of automated multichannel customer interaction software.

• The value of the contract is $1.7 million to Nhancement and includes the installation of 250 agent terminals, ongoing training for supervisors and call center agents, and ongoing outsourcing for business development. With NHancement’s software, Falah will realize a rapid return on investment through a cost efficient and time saving application, and will have the ability to route the call to an agent with the appropriate technical expertise to service the customer. A screen pop containing customer history for easy reference arrives along with the call.

• Here’s more evidence. Contact Center University (which is not really a university, but a training unit of Aspect Communications) is licensing some of its course material and curriculum to a company that’s going to train as many as 18,000 call center reps, supervisors and managers. Much of that total will be in India.

• Information Exchange India Ltd., the company doing the licensing, is a provider of eKnowledge services to corporations and institutions worldwide. They’ve signed on to be a Contact Center University (CCU) alliance partner, and will offer CCU’s course curriculum through training academies in Troy, Michigan, and major Indian cities.

• IEIL has licensed the following courses from the standard CCU curriculum for instructor-led training delivery: Contact Center 101; Customer Service 101; The Business of Contact Centers; Understanding Contact Center Technology; Recruiting, Hiring and Training; Inbound Forecasting and Scheduling; and Performance Measurement and Management.

  The CCU curriculum includes intensive coaching in staffing, performance management, equipment optimization, communication and customer service skills, problem-solving techniques, stress management and people management and motivation.

India is developing one of the most robust technical infrastructures for call center operations in the world. In my conversations with Indian technologists and call center managers, I am hearing a sense of confidence. In general, they are founding their new call center industry on advanced technology (moving swiftly to create Web/voice combo centers, for example). The nation also has the advantage of a highly educated, English-speaking, tech-savvy workforce at a lower wage rate than in Europe or the US. This is poised to explode into the industry’s consciousness.

In short, when you’re undergoing a site selection process, open your eyes to all the new possibilities that are out there, domestic and foreign. You should look off the beaten path. There are bargains to be found and attractive locations that can serve very well as the long-term home of a call center. The important thing is to be flexible, and work with the community economic development officials. You don’t need to be in a big city, or in the Midwest, or even in the US. It’s all up to you.

International Marketing | Destination Call Center

Customers in Canada and Europe are just as likely to call you for service as their American counterparts. In fact, some sectors of American industry — travel reservations and high tech, for example — have been setting up call centers outside the US for some time.

Hardware and software companies like Intel and Microsoft have globe-girdling linked centers that answer calls related to the same product lines they sell domestically. Hotel chains and airlines are in the same predicament — they deal with customers who could be located anywhere, and who want to travel into and out of the US.

For companies like those, borders mean little when a customer calls. Other issues come to the fore:

• Answering the call in the right language.

• Taking orders in the right currency — and not losing time or money exchanging that currency back into dollars.

• Appearing transparent to the caller — “non-national,” or as little like an American company as possible.

If you’re getting the impression that most international call centers are inbound, you’re right. For a variety of reasons, telephone selling is not as popular outside the US as it is here. In Europe, that has a lot to do with privacy regulations and restrictions on the way companies can sell over the phone. Lack of customer lists and databases also plays a role.

Other factors include the price of long distance service and incredible number of languages and cultures crammed into one very small continent. All the changes that must be made to accommodate those languages and cultures means that telemarketing does not have the same economy of scale in Europe that it has in the US.

Many companies take their first step overseas with a customer support center. They find that to grow overseas, they need to provide assistance to existing customers already gathered by overseas subsidiaries. These tend to be larger companies.

As you send salespeople around the globe to dig up new customers, you’re going to need international call centers to support both sales and service. But it’s even harder to make an overseas site selection than it is in North America. Questions of language, culture — and of course complicated economics — all come into play.

Look for the same things you would in the US: labor pool, telecom infrastructure, regulations and taxes, education. But look harder, and deeper. Comparing the incentive packages from different countries (with different currencies, tax rates, languages and levels of technology) can be frustrating.

Selection Criteria | Destination Call Center

Labor. One surprising quality of this strong economy is low unemployment — hovering around 4% for long enough now to create real competition for quality workers, particularly in the service sector at the low end of the pay scale.

While that’s good for workers, it’s affecting the call center industry. Anecdotal reports indicate that it’s harder to find workers in large quantity at the traditional low pay and benefit rates that have fueled the dramatic expansion of the industry in the last few years. Staffing large centers is harder, and turnover has always been a problem. It appears that the national labor squeeze is exacerbating the problem that used to appear on a local or regional level, where too many call centers in one area would saturate the labor pool. Where in the past the industry would move on to another area, now instead salaries are creeping up.

“Call centers have traditionally drawn from the marginally employed,” says call center expert Madeline Bodin. “People like housewives, students with flexible schedules, people who have to work part time, or recent graduates. With unemployment so low, people have other choices.” She says that given the choice between a job in a call center and something else, there has to be a reason for potential employees at that level to choose the center. Often, there isn’t one.

Kevin Leonard of Strategic Outsourcing Corp. specializes in hiring in bulk — hundreds of agents at a time for large, high-end call centers in the southwest. “What most call center people do is call temp agencies,” he says. “The signal is sent to all the temp agencies and they find everyone they can’t place anywhere else.” When you staff by the hundreds in a single concentrated area, especially under time pressure, the call center management ends up under the gun, with no real opportunity to check the skills of the pool as a whole.

What this means for call center site selection is that the old rules don’t necessarily apply. Going to a location because of the of labor doesn’t make sense. Economic conditions will change over time, changing the cost of labor. What you need to look for is the quality and Continuity of a region’s labor force. Quality, meaning people are well educated, with computer and communication skills, and a solid work ethic. Continuity, of course, meaning that the labor pool is deep enough to supply a constant stream of workers, even at your highest projected rate of turnover.

While many believe that an area’s unemployment rate is the most important indicator of workers available, the best indicator is how likely that market is to grow. Unemployment gives you a quantity of workers from which to choose, but is not a guarantee of quality.

If the labor market is growing, a company can set high standards for recruiting. Growth allows that company to let go employees who don’t meet its standards. High growth also lessens the inflationary pressures on wages and benefits in that market. In the US, this kind of growth is usually indicated by a high number of people moving to the area. A large percentage of young people — and even a high birth rate — are other signs to watch for. Salt Lake City, for example, is a recently popular call center location, in part because of its nation-topping birth rate.

A growing labor pool is more important for call centers than for most other industries. Because of the stress and the high turnover rate, call centers tend to burn out a labor pool faster. After a while your help wanted ads may go unanswered by a populace battle-scarred by call center work.

A steady supply of new workers can make finding employees easier when your best employee retention efforts fail. Also, call center employees are different from most. They are usually part-time workers that don’t share a demographic profile with the usual nine-to-fivers.

Analyze an area for students, senior citizens, housewives, people in a career transition and people new to the area. It is from these labor pockets that call centers usually draw their workers.

Educational Institutions. As noted above, students are historically a ready source of call center reps. Placing a center in an area that has one or more colleges or even a single large university can give you an ongoing flow of admittedly transient workers. They won’t stay around long, but they are often available on short notice, and they can work odd shifts.

Increasingly, vocational education is a powerful draw for call centers. Community colleges are beginning to offer certification programs in the kinds of skills that are necessary for call center work.

When rating an area, look at what the educational infrastructure is like. Does the community support it? Is it channeling people into high tech jobs, and preparing them for entry level high tech work (which is what call centers are, really) with the appropriate mix of people skills and technical skills? Are graduates staying in the community, or are they leaving for something else? And is there another dominant industry in the community that’s soaking up the newly graduated workforce? An industry that’s cyclical might create boom and bust cycles of high unemployment that will affect your cost structure — not necessarily always badly, but it’s something you have to think about going into an area.

Using student labor is a very personal corporate decision. Students offer a ready source of low-cost labor, have higher academic credentials and are generally articulate. But to students school comes first, employment is second. Their schedules are more important than their jobs.

Companies that can compensate for this, and students’ high turnover rate, find a ready source of student labor very attractive. Other companies avoid student workers.

Whether you are looking for students or graduates, junior colleges, trade schools, business schools and even high schools are often-overlooked resources. Some schools even fashion their curriculum to meet the needs of business, with “call center certification” a growing trend in some areas.

Real estate. Outside the major cities, this is one of the things, oddly, you have to worry about least. Space for call centers is plentiful, and customizable to your heart’s content.

What you should look for is outside the scope of this book because it’s going to depend entirely on the kind of call center you are creating, and the way that center relates to the rest of your company. For example, company culture will determine the likelihood that the center will add seats over time, perhaps doubling or tripling in size. Or alternatively, perhaps the company has a bias to opening multiple centers and keeping them small. There are advantages to either method, but again, it depends on internal factors more than external.

People used to stay away from cities like New York and Los Angeles because the cost of office space was so prohibitively high (as are the taxes). In recent years, though, cities (and their near suburbs) are more popular for some industries despite the high real estate costs. Some financial services businesses, for example, want their call centers closer to their trading desks and corporate headquarters, particularly when the call center is used to respond to Internet inquiries as well as voice calls.

And cities are beginning to awaken to the notion that call centers are job creation engines (except for New York — the city that never met a tax or burdensome regulation it didn’t like). “Enterprise zones” are areas that are tax-abated or otherwise incentivized to allow businesses to open at lower cost, provided they hire a certain number of people.

While this is a good thing, and is starting to show results, people looking at urban locations for their centers have to balance these zoned advantages against higher urban telecom costs, poor services and infrastructure, and possibly deficient educational systems.

Another way to think about your real estate selection is from a facilities point of view: is it somewhere that people will want to work? You’re trying, after all, to hire and retain hundreds of people, keeping turnover low. Therefore, safety and security are issues. And along with this go amenities that cost relatively little, but attract workers who will stay and keep them from burning out: accessible day care, parking, even windows.

Telecom. Take it as a given that you need more than you think you do. Imagine the fanciest, most complicated and bandwidth-hungry application you can possibly conceive of using, then double or triple it. If you find that a particular location doesn’t make this possible, walk away. Someplace else will make it happen. The last thing you want to have happen is that you commit to a locale that keeps you from using something you’ll come to need in three or four years. That was the case with ISDN a few years ago. People who wanted to run multi-site call centers were stymied — they could either get a dedicated T1, or use one of the smaller, cheaper ISDN call routing systems that were coming out around 1994 and 1995. But with ISDN coverage woefully incomplete in the US at that time, there were a lot of unhappy call center managers (and vendors, who couldn’t make sales to centers that weren’t covered by ISDN).

Within the US, sophisticated telecommunications is the norm. While it is important for your call center site to have sophisticated telecommunications, you can find this level of sophistication even in the hinterlands.

You might have a particular relationship with an RBOC or a long distance carrier. There may be particular services that you need that you can only get within a prescribed geographic area. For example, centers with extremely high call volumes may find the fact that Kansas City, Missouri is a major switching center for both Sprint (which is headquartered there) and AT&T a big plus.

And don’t forget the Internet. In the near future, the telcos will be carrying much of their voice traffic as data packets across newly crafted IP networks. But until then, you’re still going to need the best, strongest Internet backbone you can find. Many more applications than just email are going to depend on this. Maybe you’ll get it from a carrier like AT&T or MCI Worldcom, or maybe from one of the new alternate carriers like Qwest — in any case, this is something that needs attending to before you commit to the location.

Government (and other) incentives. There’s nothing like getting something subsidized to make a location more attractive. There are lots of ways that governments try to sweeten the pot:

• Real estate tax breaks. They may give you a percentage off the cost of running your center for a few years into your operation, particularly if you’re considering a specialized office park that’s had government input, or going into an economically depressed area.

• Job creation credits. These are incentives based on the number of people you hire and keep on the payroll for a designated period of time. (This is in the authority’s interest because they make up the loss in the personal and sales taxes that the hired workers end up paying.)

• Along with that come training subsidies. To get you to locate in an area with lots of underemployed workers, they may offer to pick up the cost of training. This is a good incentive — ask for it if it’s not immediately on the table.

• Coordinated sweeteners. That is, a state (or country) can couple one or more tax advantages with favorable rates provided by the local telco, and/or something delivered at the local level by the town or county authorities.

The area of government incentives is one of the most creative (in legalistic and accounting terms) — there’s no reason not to ask for what you want and see if it can be delivered, because call centers are so advantageous to a community that there’s often no reason not to make them happy. But remember that leverage is a function of size; the more people you might hire, the redder the carpet that’s rolled out for you.

A company that’s bringing jobs and high-tech facilities into a city is worth incentives. If two or more locations are competing on an even playing field with regard to telecom, labor and amenities, then incentives are a critical lure — and something a call center planner should insist on.

Destination Call Center

Before you buy a switch, hire staff, install a single piece of software, train any agents — before you take a single call — you’re going to have to find a place to put your center. Site selection is one of the biggest decisions you’ll make. It affects every decision that comes after — from the kinds of wiring you install to the services you offer your customers — for years to come. Where do you locate your call center to provide the maximum advantage to your organization and your customers?

Finding a site for your call center is more difficult than finding a site for many other types of business. And it is more difficult to find the ideal site for your call center now than it was just a few years ago.

The choice of locations has never been broader — you can put an effective center just about anywhere these days. But having more choices means you have to do your homework better than ever to find the right site for your center. It used to be a simple matter. You’d put your center in an established call center-friendly city, like Omaha, hoping to get the best telecom connections, and an educated, accent-free workforce.

But that’s not the most cost-effective solution anymore. While there are a huge number of centers scattered throughout the American (and Canadian) Midwest, other factors let you enlarge the area of consideration. Many companies no longer see the Midwest as an attractive area for new centers (though existing ones continue to thrive) because of the tight labor market.

In essence, the traditional barriers have been eliminated, which makes the decision of where to locate if anything, harder. You can get good telecommunications services just about anywhere in the continental US and Canada. Similar conditions exist in other regions of the developed world. And (at least in the US), the cost of telecom has dropped dramatically through the past decade.

A call center is not physically demanding as to the kind of space that you put it in, either. I’ve seen centers in office buildings, strip malls and industrial parks; squeezed into back rooms and former warehouses; converted supermarkets and trading floors — there’s no end to the ways to house a call center.

Given that, you can place a call center anywhere you like. It means that you can choose the physical surroundings based on your specific company’s needs. If you need to be near an order processing center, for example, or the CEO’s summer cottage, you’ll not find that too much of a problem.

What is good news for call center managers is there are plenty of locations, both in the United States and abroad, that are eager to have your call center join their business community.

Call centers are so malleable, physically, that you can just as logically conclude that New York City is an appropriate venue for your center as Ponca City, Oklahoma. In real life cases, both of those cities had something critical for the company that ran a center. In New York’s case, it was a company that already had an office presence in town; converting an extra room into a small, informal call center made sense, even at New York real estate prices. New York City has some of the highest costs for office space and labor in the country, plus a telecom environment that’s not always what I could call a welcome mat for high-tech businesses. But that’s where one company set up a center dedicated to outbound calling on small accounts. They already had the telecom in place, and the networking infrastructure. At $100,000 to revamp the existing space and furbish it for call center work, it made more sense to add-on than it did either to locate somewhere cheaper, or even to outsource.

In the case of Oklahoma, you have a very different environment. Space is cheaper, and there is room to spread out. Several years ago a major outsourcer built a jumbo center, investing more than $5 million to build a 42,000 square foot center in Ponca City, a small town of 29,000 people.

They were not just looking to add an informal center to an existing business function. Instead, when placing a major facility, they were thinking costs, and thinking long-term. So state incentives played a major role in their decision. Oklahoma has a highly developed government program designed to attract call centers, because they quite correctly see call centers as a killer job creation engine for their communities. And in the case of the big centers, you can transform a small community overnight, build a tax base, create a reason for local people to stay in the community instead of migrating to bigger cities, and so on. Call centers do for these communities what factories did a few generations ago.

Dig a little deeper, and you find that Ponca City has an excellent school system, including vocational schools, that can provide a steady stream of support reps with some technical skills. The University of Oklahoma is not too far away, either. Outsourcers like small towns — they provide stability and permanence. But they choose carefully, because if you make the wrong decision, you’re stuck with a multimillion dollar investment.

How Call Centers Evolve, or, How to Start Putting Your Center Into Perspective

A few years back, when the Internet was just a shiny new toy, I created a model of call center development that tried to show how the center evolves in its relationship with the organization it’s a part of. It was a good model, describing with a fair degree of accuracy the struggles that a call center has to go through to deliver better service at a consistently high level of efficiency and lower cost.

The reason you create a model is to explore the general principles that guide a process, in this case, the process of service delivery. Since I created the Six-Stage Model, much has changed in the outside world that affects how call centers operate, and how they change over time. The very idea of CRM, which tries to grapple with the consequences of the later stages, but not always successfully.

The difference between my Six-Stage Model and other descriptions of how call centers work is that my explanation has less to do with what technologies are used, and more with the way the center interacts with the rest of the company. Here’s how it worked:

Stage 1: Startup. Also known as the informal or departmental call center mode. Organizationally, you find this in either small, growing companies that have not yet created a structure for service delivery, or in larger ones that allow diffuse, fractured approaches to spring up ad hoc.

This is one of the most haphazard steps. It’s the point at which a company is operating with little or no strategic view of the value of customers, or the consequences of good or bad service delivery. In this environment you might find a marketing department answering calls, or a voice mailbox set up to handle customer inquiries. What you won’t find is any kind of measurement, or coordination, or support from the higher levels of the company. You also won’t find any specific service-related technology investment. Instead, you find people on the fringe of the organization trying to make do with existing tools like PBXs.

The people doing the call handling are not, at this stage, professional reps. They are low level, perhaps entry level people filling in where gaps are found. Unfortunately, in this case service delivery can be seen as one large gap.

Stage 2: Triage. Because, at some point someone notices that something has to be done. You have to respond in some way to the customer base — even the upper managers know this. But often their first response is an inadequate one. It is reactive, and often guided by a single horrible metric like hold time, or products being returned in droves.

The response usually takes the form of traditional call center tools: ACD features added to a PBX, even a stand alone ACD, and an organizing of the service-delivery hierarchy. Someone is tasked with addressing the problem; that someone is given a budget and a mandate and little else. This is the first step toward creating the call center as it is known today, an infrastructure built to receive and handle customer inquiries.

Often, the problems that drove the process in the first place can be alleviated (note that I didn’t say solved) through the application of tools that are very mature and easily controlled.

Stage 3: The Organized Center. The people in charge become more professional, gaining a better grasp of the array of tools at their disposal, and the pros and cons of each one. The agents themselves also become professionalized; it’s at this stage that training, monitoring, incentives and career pathing become factors in agent management.

The call center management is still focused on cost control, usually at the behest of corporate policy planners. Here’s where you start to see some of the more interesting technology make its appearance, as managers try to squeeze operations to make them more productive in response to the fundamental call center paradox: the need to simultaneously cut costs and improve service. You see attention paid to all the cheap, reliable tech that’s become very standard, like front-end IVR processing and the first glimmer of the possibilities of bringing the telecom infrastructure together with the database. (I did call this CTI or computer telephony - now it makes more sense to lump it all together into CRM.)

And, of course, you see a lot more attention paid to reporting and analysis at this stage. But that analysis is mainly at the level of the call and the agent — not the customer.

Stage 4 is one of Continuous Improvement. That’s the point at which the tension between the external needs of the company and the internal needs of the center are at their most apparent. From outside comes the imperative to cut costs, as before, but also comes the need for more real, useful information about what’s happening with customers. This is where you begin to see the CRM mentality creeping in — not always emerging from within the center. Just as often it comes from the need outside departments have for organized, coordinated information relating call center activity to what the rest of the company is doing in marketing, product development, shipping, financial analysis, and so forth.

It’s also the stage at which call centers become really rigorous internally about things like monitoring and training programs, about workforce management software, and sometimes begin experimenting with things like skills-based routing and simulation.

In Stage 5, the forces at work in Stage 4 have matured a bit, and as a result, outsiders at the organization have come to see the call center more as a Strategic Asset than as a money pit, or a drag on the rest of the company. At this point, people are starting to cast about for a set of metrics they can use to define the relationship between the company and the customer. Often the best they can do is to frame that relationship in terms of call center stats — number of calls, how well satisfied those customers are, and the nexus between customer value and customer cost.

In Stage 6 (as I defined it a few years ago), the importance of the physical call center dropped away as the continuing focal point became that of the company-customer relationship. Prefiguring CRM a little, in this stage, which I called Mass Customization of Service, the call center and its company became a tightly integrated whole. I posited a situation in which each rep would have at his or her disposal all the information needed to handle the customer at the point of interaction — no more or less information than was needed, at the precise moment of contact. And the caller and rep would be as precisely matched as possible, with the agent empowered to do whatever was necessary to meet the customer’s needs, within the context of knowing what business rules to apply, and what the value of the customer is.

I also said that Stage 6 was a) not here yet in any meaningful way, b) a theoretical end point at which the boundaries between call center and company are indistinguishable, and c) a largely unattainable goal based on the technology and business contingencies of the day.

While in large measure this model still fairly describes the well-beaten path most companies take over their lifetime, it’s become clear that this model works best looking backward at centers that already exist today. For companies starting out on this road in 2001 and beyond, there are more factors that come into play.

There are three “side stages” that seem to have evolved just in the last few years — alternative tracks that include some aspects of what I’ve just described.

First, the dot-com online retailing boom and bust cycle that everyone just went through revealed some things about online customer service. Mainly, that it isn’t any good. Small companies that came out of the Internet industry sometimes thought that Internet-based tools for service delivery were adequate for their customers — that customers would be satisfied asking for help by perusing a webpage and sending an email. Many invested in front-end email processing tools, and even a back-end customer management system, only to neglect the telephone infrastructure. And people being people, they do still like to pick up the phone and call when something goes wrong (especially when it goes wrong with Christmas presents ordered online.)

So that first side stage involves what I call “Backpedaling to the Phones.” It’s a stage that could occur in any industry, really, that set itself up to handle customer interactions through non-telephony modes, and belatedly realizes that the customers couldn’t care a whit about a high-tech Internet service strategy but demand satisfaction by phone. In these cases, though, the company doesn’t backpedal all the way to Startup or Triage anymore. They go full bore into Stage Three. That’s because unlike ten years ago, or even five, it’s reasonably fast to throw together a technically robust call-handling infrastructure using what are now mature, proven, well-integrated tools.

The second side stage is more of a decision point that a lot of call centers find themselves reaching very early in their life cycle nowadays: Multichannel Choices. What do you do about emails? Or Web interaction? Before you even get to the question of HOW, all call centers face the question of whether to integrate these alternate modes of customer interaction into the telephony center at all. Which road you go down influences which set of technologies you’re going to buy, and what face you’re going to present to the customer, and how your internal management will be structured, and how much you’ll spend to integrate the different channels, and even how you train agents. It’s immensely important, and it’s something that’s sidestepped all the time, because it’s so profoundly complicated, and affects so many different aspects of business planning, that it’s often just decided by accident or default or both, often from outside the center. I’m not talking about the technology decision here — I’m talking just about the raw gut choice of whether emails are handled in the call center, or should a separate center be created to handle them? Should telephone reps lead Internet chats, or should it be left to a separate group?

Because it is so hellishly complicated, a lot of companies head straight for the relative safety of the third side stage: Outsource the Whole Mess. This is a fairly clear proposition, especially when it’s clear that there’s no industrywide operational consensus for how best to run a center under multichannel conditions. And when it’s clear that what you’re looking at buying is a set of very expensive and very transitional technologies that are going to look quite different five years hence. More than at any time since I’ve been covering call centers, outsourcing all or part of these multichannel components and the CRM overhead is a popular way to cut uncertainty’s Gordian knot.

Obviously this model isn’t going to look right to everyone; not all centers are created equal, and not all company agendas are the same. I’m just trying to paint (with a very broad brush) some of the common choices made by people grappling with similar problems. As things get more complicated, though, and as the modes used to connect with customers multiply, the “call center” will be harder and harder to describe in a universal way.