A Forward Look

Reported by Peter DeHaan
January/February, 2003

Last January, our "Preparing for the Future" article garnered a great deal of positive feedback.  Various industry players had been asked to submit a brief synopsis of their take on what the future would hold.  Responses were insightful, varied, and dynamic.  The resulting assembly, however, was disjointed and failed to tie each excellent part into an equally compelling whole.  This year we've attempted to be more organized by guiding the process.  The result is no less valuable and hopefully easier reading.  Our contributors consists of:

• Kevin Bachelder, Director of IT, Ansaphone

• Chuck Boyce, Director of Operations, The Appletree Group

• Tom Curtin, President, Amtelco

• Steven Diels, President-Elect of ATSI

• Linda Osip, Executive Director, CAM-X Canadian Call Management Association

• Scott Miller, Director, Business Development, Phone & Wireless

• Wayne Scaggs, President, Alston Tascom

• Michael Stoll, President of Record/Play Tek, Inc.

Here's what they had to say:

Opportunities: Opportunities are factors outside our companies' control.  They provide us with a chance to grow and improve our businesses.

"In this industry, I see constant opportunity," said Diels.  "The market is dynamic as technologies change.  What is constant is that we provide human contact in a technological world." 

Curtin added that he sees "the blending of more call processing and messaging tasks into the mix of a call center's service offerings with the same or less labor.  Bigger and more forward-thinking companies [are] getting involved in outsourcing as the economy stabilizes and smaller companies start investing in new technologies." 

Scaggs concurs.  "The upcoming year will offer many opportunities in client outsourcing or call overflow for busy offices," he said.

 For some specific issues, Miller cited unified communications, which will merge "non-real time and real time communications" and produce high profit accounts.  Boyce added the Internet and wireless to the list of technology opportunities.  HIPAA (the Health Insurance Portability and Accountability Act) according to Stoll is an opportunity for those able to understand and implement its requirements.  And Scaggs envisions "more applications and projects for Interactive Voice Response (IVR) and other automated information and data retrieval and delivery."

Threats:  As the counterpart to opportunities, threats are external forces that can jeopardize business goals, models, lines, and revenue streams.

One frequently mentioned theme was telecommunications.  "Our industry has benefited from CLECs and competition," said Diels.  "I believe a threat exists to competition in the telecom market."  Boyce adds his concern about "the reliability of telecommunications service providers.  Even though the circuits of a failed provider won't go away, the transition from one carrier to another will be very costly to teleservices businesses."

Diels cited one item that is likely on every employer's mind.  Our biggest threat is "overbearing government regulation on employers."  It is noteworthy that Diels, who is from California – where state government is noted for its employee-friendly policies – is witnessing developments that could expand throughout the U.S.

"Apathy and failure to market the services available in our industry is the greatest threat," said Scaggs.  "There is a significant need to begin thinking and marketing outside of the box."

Miller sees that as "unified communications takes hold, it will take traditional live accounts as companies continue to find cheaper, better, faster, and more cost-effective means of doing business."

Outsourcing: Many cited outsourcing as an opportunity.  This includes clients outsourcing more work to call centers and call centers outsourcing non-core activities to other companies.  We specifically asked, however, about the prospects for one call center outsourcing to another call center.  All respondents agreed that this type of outsourcing is a trend that will occur with greater frequency.  While the possibility of outsourcing 100 percent of a call center's traffic is feasible, a more selective or strategic outsourcing is likely to see the bulk of the activity.

Boyce summed it up by saying: "I think we are more likely to see teaming rather than complete outsourcing.  Centers with similar equipment but different areas of expertise [will] team up on projects to capitalize on both partners' strengths to win new business." 

"There are definite applications that call for outsourcing of this nature in processing activity for large accounts or in a disaster recovery mode," said Scaggs.  "Once again, our industry needs to think [progressively] to become aware of the benefits available in outsourcing, such as specialty applications provided by some services, labor issues, and time zone call flow control."

Diels, who also sees international outsourcing possibilities, said "Vendors are pursuing networking technologies that will allow independent [teleservice companies] to work together by sharing databases and call loads."

Curtin added, "This has already happened and will continue to grow as the technology that is already available is taken advantage of, things like TCP/IP networking and Web-browser-enabled agent workstation screens."

 "There has been a trend in the past years with members sharing clients," Osip said.  "Strategic partnerships…allow our members to accept clients that they may have had to turn down in the past.  If a client requires 50 seats, our members can partner to meet the criteria for the campaign.  This business practice has also solved bilingual issues.  An English-only company can outsource French calls to other members who provide bilingual service."

"Since more and more call centers are using digital phone switches I believe we will see a significant increase in the use of off-site agents," said Bachelder.  "It no longer requires as much technical expertise to route calls to other locations and…I think you will see call centers start to use more at home workers and also set up partnerships with other call centers to share workforces in order to take advantage of underutilized staff time and time zone differentials."

Miller sees with the ever-expanding availability of IP (Internet protocol) access, that "the potential to have true distributed architecture within this industry is upon us.  You could have a multi-company…platform that serves all, with telco access in all desired areas, tied together seamlessly via IP.  As such a single entity could easily provide enhanced services to this and any industry.

Consolidation:  In the past few years, there has been a great deal of industry consolidation, especially among traditional telemessaging services.  We wondered if this tendency could be expected to continue.

"I believe that this is a trend that is just about over," Curtin said.  "What I really have noticed in the last five years is that the big players have finally realized that to be truly effective and profitable you have to keep your operators local to each market even while you consolidate your switching and database functions to centralized facilities."

"The number of [teleservice companies] may contract for some time," said Diels, "but as the need for human contact increases in our technological world, so does our market increase.  An expanding market should promote industry growth."

Osip added, "Although many of the mergers and acquisitions have already taken place, there are still small [telemessaging companies] across Canada" that could be targets of future consolidation.

Stoll, too, sees more consolidation on the horizon.  As the owners of smaller services grow older, some will pass on their business to the next generation, whereas others will opt to sell.

"I think is a given fact," added Scaggs.  "It is much more difficult today for a small service to survive in the current economic conditions.  The service requirements of most [clients] have increased greatly over the last few years.  This trend will continue as they expect more capability from their current provider.  Providing these new or different services often requires capital investment in new software and/or hardware.  Many services are struggling financially in today's market and cannot make the investments required to meet these new demands.  Mergers and acquisitions does allow for economies of scale."

Major Trends:  Curtin feels that the scripted messaging trend will continue to emerge.  "I really believe that…scripted messaging and IVR will take hold as the word gets out [about] how much labor is saved, both in training and with mistake-free call handling.  Add the IVR to scripted messaging and you can offer your clients automation with a default to operator if needed and then back to automation seamlessly (the data collected in IVR follows the call and is displayed to the operator).  The huge multi-million dollar call centers do not come close to offering this type of mix of services to their clients."

Diels sees a greater demand for high quality services.  Miller suggests that enhanced services will provide new ways of blending traditional services with automation and technologies.  Stoll sees more Internet enabled services emerging.

Major Developments:  "More businesses will become quality certified," said Diels.  "This is to satisfy the need to distinguish your quality service from the poor ones.  ATSI is poised to help [the industry] clearly identify your business as a quality one [and] is now offering certification programs that will help you achieve high quality performance."

The Internet is sure to continue to be a major development.  Osip sees this being manifested in companies offering "more Web-enabled services."  Stoll envisions more developments in VoIP (voice over Internet protocol) and email, which he labels "Internet tools."  Miller concurs with this thought and added "online IP communication with clients, chat, VoIP, messaging, and conferencing" to the list of major developments.

Curtin said, "I do believe that there is more that our customers can do for their clients."  This will result in achieving greater success for their clients, while generating more revenue for the call center.

The Economy: High on most business leaders' list of concerns is the economy.  Rather than look to analysts and experts, whose accuracy rate has been said to rival the weatherman, we'll consider the opinions of those who are in the trenches of our industry.

"We are beginning to see an improvement in the economy now," said Scaggs.  "Our users' client base is beginning to grow again as well as their call flow.  This is a good sign of economic improvement and growth from our perspective."  Curtin concurred that signs of recovery are already evident.  Miller predicted a turnaround in the first quarter of 2003.  Stoll suggested it might take place in the second quarter.  It is notable that no one cited the end of 2003 or 2004.

Taking a different tack, Diels said, "I am not a macro-economist.  But with respect to our industry, recessions can be very beneficial.  As companies look to cut costs, they may be more willing to explore outsourcing to our industry.  When companies are in a growth mode, it is harder to get an influential audience."

Key Technologies:  In addition to trends and major developments, there are also some key technologies that bear watching.  "There will be continued integration of Internet-based services," said Diels.  "I see progress in the area of backups and the sharing of databases and call load, thereby allowing greater networking."

Boyce predicted, "Vendors will continue to refine and improve their Web toolsets."  He added, however, "There is a lot of new technology that has been [sold] within the past year that has not been fully [marketed] by the centers that purchased it."

Miller's focus is on IP access.  "With more and more proliferation of broadband services," he said, "access to the Internet will only get better.  All services regardless of type will have to be made available via IP."

Scaggs said that the technologies to track are "improved IVR applications, enhanced text-to-speech applications, more automation throughout the answering functions, and speech recognition applications developed specifically for the messaging industry."

Stoll's future perspective was the most far-reaching.  He said that video integration into call centers is a technology to watch.

Pressing Business Issues:  The responses to this topic ran the gambit.  "Human resources," said Osip, "re-training call agents for Web-enabled services."  Miller cited a need to "focus on return on investment and service offerings that give the biggest margin."

There is a need to develop a sound marketing program and steadfastly implement it, stated Scaggs.  This is needed to effectively communicate to prospects the scope and range of services offered, as well as to look for new markets and applications,

"Two issues are pressing," Diels said.  "First, we need to be alert to the dynamics of our marketplace.  Secondly, we need to protect ourselves from frivolous litigation and poor regulatory statutes.  Predatory forces are out there that can separate you from the benefits of your hard work and risk-taking."

There is a need for teleservice companies to "focus on their core business and new business," said Curtin.  This means "picking a vertical [market] without trying to be everything to everyone."

Connections thanks the contributors to this article.  They can be contacted as follows:

• Kevin Bachelder, Ansaphone, kbachelder@ansaphone.com  

• Chuck Boyce, The Appletree Group, cboyce@appletreetech.com  

• Tom Curtin, Amtelco, tcurtin@amtelco.com 

• Steven Diels, ATSI, Steve@AAMCOM.com  

• Linda Osip, CAM-X, camx@nas.net

• Scott Miller, Phone & Wireless, scott.miller@pw-x.com

• Wayne Scaggs, Alston Tascom, wayne@alstontascom.com  

• Michael Stoll, Record/Play Tek, Inc, stoll@recordplaytek.com