The Trend of The Future

Billed as the digital nervous systems of the coming global

service economy, call centers are fast becoming an omnipresent part of an

average man’s daily life in the developed countries like USA, UK or Australia.

Call centers serve millions of consumers on wide ranging issues related to

customer support, general enquiries or sales ordering. With the growth of

innovation in communication technology, a consumer today has a host of media to

choose from when wanting to communicate with the supplier. With the customers’

expectations at an all time high, companies are striving to provide a consistent

experience to the customer, regardless of the contact channel. Be it mobile

phone service providers, government utilities, banks or a consumer durable

company, all are using call centers as an essential component for providing

quality customer interaction. Call centers, by bringing together diverse media

like e-mail, telephone, fax and the web, help achieve just that. Digital front

desks of global corporations, call centers are fast turning into new economy

battlegrounds in a fiercely competitive marketplace, where each company is

desperately trying to either grab new or retain existing customers.

All this has led to a great rush and activity in the market.

The last few months have seen a series of announcements by industry majors

expressing intentions of investment in the call center business. Among such high

profile investments is one from the Munjals of Hero Honda, who have announced

setting up of 1300-seat call center facility costing around Rs 100 crore. The

other is Tata Steel, who, in JV with Sitel of US, announced recently that they

are going to set-up a 10,000-seat call center. Other big announcements came from

Flex Industries and HDFC talking of similar amounts of investment. Apart from

these there are numbers of players who have either set-up or are in the process

of setting-up call centers.

Along with optimism, there is a lot of confusion abounding in

the marketplace. There are too many vendors and consultants who have mushroomed

overnight. Many of these vendors and consultants are making unrealistic claims

and promises to clients who themselves have no idea of the intricacies of this

business. The result of such unplanned activity is not likely to be very

pleasant. Many of these weak players are likely to either die or get taken over

by bigger and better players. Needless to say, such activity will lead to loss

of confidence in the concept. The IT enabled services opportunity is for real,

and India due to its advantages of cheaper English speaking manpower and

technical expertise, is in a strong position to emerge as a global power.

However, if there is negative sentiment prevailing in the market, future

investments are likely to ignore this high potential area.

All new entrants must remember that getting business for

sustaining call center operations will be an extremely difficult task. Any

outsourcing decision, by nature, is an extremely precarious one, as most of the

outsourcing solutions tend to be sticky. Once a company gets committed to

outsourcing and begins downsizing, it closes its option to go back to the

earlier status. Also, there is the added issue of entrusting the customer

database to an unknown entity with no or negligible past record to verify its

credibility. To make matters more difficult, India has the image of a country

with poor service culture. Many are concerned about the mindset of Indians on

providing customer service. The clients would want to be more than doubly sure

of the quality and credibility of the outsourcer.

Also, there is a limited understanding of call center

operations and the total breadth of services that may be rendered through call

centers. After talking to many entrepreneurs, it has been seen that they tend to

see call centers as a standard commodity, not realising the variety in types of

call centers that can be set up. Depending on the type of call center, the

initial outlay on set-up can vary from anything between Rs 3 crore to Rs 20

crore. The revenue earning potential can vary from $7 per agent hour, in high

speciality areas like legal advisory service—to $90 per agent hour. It also

has serious implications on recruitment and HR practices.

Given the above background of confusion and lack of coherent

strategic understanding of outsourcing business, there is an apparent need for a

guiding tool that helps position the business in broader perspective. The tool

must be comprehensive and thorough on academic rigor, yet simplistic enough to

be understood by people who have no or minimal experience of the call center

industry. The VinRam matrix is presented keeping in mind these guiding

principles.

VinRam Matrix

The VinRam matrix is a framework to help understand the

complete range of call centers that one may set-up. It classifies various types

of call centers on the basis of services that they render and the operational

process, through which the service is rendered. It stresses on the need to

create specialisation and introduces the element of strategic thinking in the

initial planning stage.

The VinRam matrix revolves around two axes. One, is reflected

by the operations axis based on the People-Process continuum, which represents

the operational focus of the call center. The other is the Sales-Service axis

that represents the kind of service rendered. In other words, whether the call

center is inbound or outbound.

The basic premise of VinRam is that call centers, on the

basis of relative importance of each, can be seen as either People Call Centre

or Process Call Centre. In a people call center, the relative importance of

agent knowledge and experience is much higher compared to a process call center

where an agent is merely expected to provide a simple service like passing on

information that is available in the database.

An example would make the point clearer. Visualise two call

centers, one operating as an information center for a telecom service provider

and another as a helpdesk for a networking company. The call center operating

for a telco would typically deal with calls related to customers’ information

requirements, like billing status, product information, etc. On the other hand,

a call center operating as an IT help desk, would deal with customer problems

that demand high knowledge level from agents.

Based on the above contrast, it can be seen that both the

call centers operate in different terrain and will require different kind of

strategies to succeed. To bring out a valid comparison we would compare the two

on the following common criterion:

• Nature of calls

• Caller expectations

• Agent skill requirements

• Critical success factors

• Investment focus

There is further classification on the basis of whether the

call center is focussing more on sales or on service, i.e. inbound or outbound.

Depending on the primary activity, infrastructure requirements would differ. For

example, an outbound call center would not require installing IVRS or ACD.

However, there would be no change in the nature of calls. Though, there would be

significant changes in the HR practices of the set-up, HR policies with respect

to recruitment, compensation and motivational practices will differ

significantly between the two. For example, a sales call center can have more

quantifiable criterion for assessing performance of people, hence, one may run

quota based incentive programs. Similarly, there could be other differences

between the sales and service environment.

As is evident from the above, process based call centers,

whether inbound or outbound, are characterised by routine, short and repetitive

nature of work. It would sound like running a call center where operations are

very ‘mechanical’.

Further classification of people call centers on sales or

service focus does not change the fundamental tenets of the operation. In an

outbound people call center you are doing tasks like selling financial loans,

assessing credit history or selling encyclopaedias. Whereas in inbound

operations, typical applications are like insurance claim processing, medical

advice, engineering support, etc.

In both the scenarios the fundamental tenet of

high dependence on people skills holds true.

Calls are of uncertain duration and pose unique problems.

Indian Call Centers — Process or People?

So which is the road for Indian entrepreneur to take–people

call centers or process call centers? Which kind of call center focus would give

a long-term advantage and make better strategic sense? Let’s see a couple of

recent trends in customer service. Jeff Bezos, founder of Amazon.com, said,

"Our customers are looking at zero sales support and that is the direction

we are going to take". In this he didn’t meant that Amazon would provide

no sales support. He was pointing to the direction of developing self-service

features on the web that eliminate or at least drastically reduce the need



for maintaining a sales support department. Amazon.com is a potential client for
a process call center.

Can one imagine such a statement coming from Cisco or Nortel?

We would assume it as very unlikely, almost impossible! No matter how much

technology develops, it would not be able to replace the application of the

human mind required to resolve problems of such a complex nature. Nortel is a

potential customer for a people call center.

The above comparison of two very different kinds of

scenarios, gives the answer to our question. The development of the web has

created some very innovative and effective ways to provide service to customers, as far as the service

requirement is confined to passing

on of standard and routine information. Metaphorically, the web may be compared

to a gigantic vending machine–vending information of a large variety. However,

it can only vend information and do no more. It cannot adapt the available

information to suit a particular need that is out of sync with the programmed

format.

In process call centers the work done by agents is quite

similar to that of the web, i.e. vending information. With further development

of technology, it will become increasingly easier for customers to access

required information from the web. Hence, new technology will replace the role

of process call center agents. It also offers other advantages of reduced cost of customer service and consistency of service level. It also ensures better

availability i.e. callers don’t have to wait in queue to reach an agent.

On the other hand, people based call center markets offer

attractive possibilities for migration to India, which has a large pool of

qualified professionals. India has been able to develop an image of a powerful

source for quality manpower. We need to encash this image in securing business

opportunities that require a high level of human skill. India must position itself in a high technology niche to be able to compete effectively in the

global market place. 

Process based call centers face a threat from technological

developments. Businesses entering the call centers industry, without a clear

strategy to position or migrate to the people side of the continuum, are in for

rough times ahead. Technology is a brisk runner; you don’t want to enter into

a race with it!

Vineet Kalucha and

Ramachandrarao Ippagunta

are with HCL Infosystems Ltd

• VinRam Matrix

• Process
  
  Vs People Based Call Center