The Ovum View: The perfect call centre

Ovum analyst Alex Kwiatkowski looks at the challenge of building a centre of excellence...

For those of you blessed with reliable memories, you may recall that I recently extolled the virtues of the much vilified call centre. If the number of responses that I received is anything to go by, this is an area that people feel passionately about and I thank you for taking the time to share your views with me. Call centres may not be the sexiest things around but they can certainly get people aroused…even if it is just their levels of frustration.

I ended my article by suggesting that there are more creative, indeed sophisticated, ways in which to make an existing call centre provide increased value, delivering improved customer service without spending vast amounts of cash in the process. But before I can share some of my thoughts with you, I think it’s worth setting the scene as to where the UK call centre market is today.

Over the last three years, thousands of column inches have been devoted to subjects like multi-channel interaction, customer relationship management (CRM) and offshore outsourcing.

Multi-channel interaction – involving contact between an organisation and customer via different media, such as traditional telephony, email and web collaboration – was supposed to revolutionise customer service. In theory, customers could choose whichever form of communication suited them best at a particular given time. Conversely, companies could keep their agents busy throughout the working day by guaranteeing a steady flow of enquiries via different media, as opposed to the unpredictable peaks and troughs associated with handling telephone calls.

In order to support this burgeoning and highly lucrative market, technology vendors built a plethora of productised solutions, which combined inbound and outbound telephony, email management and web collaboration functionality in a single box. These new solutions could, for the most part, be integrated with legacy equipment, so if a call centre had already invested in an email management application, it wouldn’t have to chuck out the old in order to bring in the new.

Closely linked to this was the notion of CRM, a concept which would enable businesses to get a single, unified view of their, er, customers. In turn, this would allow enterprises to analyse certain habits, such as spending patterns and product preferences, and then use this knowledge to offer additional products and services, thereby maintaining and (hopefully) enhancing revenue streams.

I think many enterprises were seduced by CRM vendors, who promised a very attractive return on investment, with disruption caused by implementation kept to an absolute minimum. Indeed, if you listened to some of the industry messages associated with CRM products, you’d be forgiven for thinking that not only could the various solutions improve customer service, they could also cure cancer, end global poverty and repair the hole in the ozone layer. Yes, they were that hyped.

I don’t dispute that multi-channel interaction and CRM solutions certainly can have a positive effect on the delivery of effective customer service. But it needs to be recognised that substantial investment is required in order to implement such technologies. However, it doesn’t take a genius to realise that these developments have been taking place against a backdrop of challenging economic conditions, both in the UK and across the world in general. Capital expenditure budgets have been either frozen or slashed dramatically, resulting in a sharp decline in spending on new technology.

Therefore, it perhaps comes as no surprise to find that many of the UK’s call centres are not capable of offering true integrated multi-channel interaction. From what I’ve seen to date, it’s a major success for a call centre to have integrated just two channels (typically voice and email handling), let alone a full suite. The implementation of CRM solutions has also slowed, a situation which can be at least partially attributed to the reality failing to live up to the hype, as well as the aforementioned decline in spending.

Running in parallel has been an increased reliance in offshore outsourcing, using call centres in countries such as India, Malaysia and the Philippines, where labour costs are substantially lower than in the UK. Indeed, as I write this article it has just been announced that Lloyds TSB will be closing its call centre in the North East in preference to using an operation in India. Unsurprisingly, budget reduction and a need to survive in a highly competitive market were cited as some of the primary factors for the closure, and the announcement follows hot on the heels of a similar one from HSBC.

So amidst this rather gloomy background, are there any positives in a sea of negatives? Thankfully the answer is ‘Yes’. While spending on premise-based technology (usually on a licensed basis) has declined, the same functionality can now be obtained on a more flexible, pay-as-you go basis. Call centre operators are no longer faced with the onerous prospect of investing thousands of pounds in technology that just might not deliver the promised return on investment and lengthy implementation programmes become a thing of the past.

I think hosted call centre services have an absolutely vital role to play in the UK call centre industry. Join me for the final instalment of this series, when I’ll explain exactly why I think this is the case.

Alex can be contacted at aik@ovum.com .