14. Location Decisions Scale of 1 to 10 Stable, Ethics, Freedom of Press, Business regulations, legal etc. Must be reliable, efficient, cost effective, have local Telco. capacity Broad spread multi lingual Affordable location that labour and management can reach (as required) Slides 14 – 24 ref: C4; Ross Richardson Access to labour pools Educated, articulate, multi skilled
17. Estimated Loaded Costs (All) / Hour $US Savings over Lesser US Cost Figures provided by Local Operators, Economic Development Organizations, Chamber of Commerce. West Indies, Central America and South America provided by Precision Response Corporation. Central and South America Not factored in is Head Office travel and management time as well as end customer visits for Outsourcing Applications Savings over Max US Cost 20% 40% 60% 80% 33% 99% 66%
19. Fixed Costs versus Variable (What is appropriate scale?) Canada Scale = 35 Agents Max = 1,000 per location India Scale = 500-700 Agents Max = 5,000 per location Ambertech Group Philippines Scale = 350+ Agents Max = 3,000 per location South Africa Scale = 300+ Agents Max = 2,000 Per location
My name is Naeem Mirza. I have specialized in IP Telephony Strategies and also Contact Centres. I have been in Call Centres for 11 years Sold and serviced them Small Centres, Networked Centres, Large centres as well as for national companies Worked for Interconnects, network providers and a manufacturers. I have implemented the business side from Call Center Managers, Directors and Executives and introduced new technologies. My experience has been in Canada and the US but my colleague Ross Richardson have just completed a world Call Center tour visiting India, Philippines Australia and the West Indies. This leads me to our discussion today. Contact Centres are mobile today and are locating globally for price or service advantage.
Outsourcing is popular and for good reason. It mitigates risks. If you do want to own a centre then JV’s are also an option.
These are the critical parts of Locating decisions. Each one must be measured and accounted for. Then costs can be assessed and most importantly customer expectations can be assessed to see if the cost model is beneficial relative to meeting customer service levels. All of these are important factors and serve as a base line within the following slides. Access to labour pools and expertise is paramount. The first question to look at is where are the agents and where are available labour pools.
In spite of all the hype and popular trends Contact Centres are located primarily in the USA. With cost pressures Canada is the next largest location which also enjoys the second largest growth. Canada will continue to enjoy the high growth for the foreseeable future and so will the other countries. The important point is that contact center functions will migrate to the optimal cost performance location. The reason the USA and Canada keep growing is that even though the cost base may be higher than other countries the low fixed costs and ability to apply the best customer service for certain segments may be unparalleled in the world. The geographic areas that can best handle certain call types will win those calls. I will share one segmentation model with you shortly. Can agents be retained or is turnover an issue. This is a critical factor as is where the agents are leaving to go. Are they leaving the industry or is poaching a problem which may also indicate either a shortfall in labour availability or training costs and hurdles that are a challenge.
A few factors that make a call center challenging to manage and run are, staff turnover. As a manager it is difficult to find, hire, train and retrain good staff. An ample supply of agents as well as supervisors and managers is required. Some areas are challenged with middle management availability or with additional training to get staff to optimal language or product knowledge levels. This is a small or significant challenge that is a key part of the portfolio management of multiple global locations. Labour costs and overall costs are critical. Let’s consider loaded cost estimates that have been shared with me.
In some cases the lower wage rates assist with the high turnover and fixed costs as well as provide return on investments. These estimates have been shared and a range has been used based on the quality of information. This slide shows trends. There are exceptions to ever rule. The first note is that management costs to personally visit, manage and direct has not been included. If an outsourcing model is used the costs for end client visits also needs to be factored in. I would also like to share some anecdotal information with this. If Canada saves 20-30% (even with exchange rate changes) our risk is about 10% higher than the USA. West Indies 30-45% has 25% increase; South Africa almost 40% with 100% increase, Philippines 40+% with 350% and India at 50% with 500% increase in risk. These factors were shared with me by Teleservices operators comparing operations in each country. What information is there available that can support this? I looked at IMD’s reports.
The current trends show that Contact Centres are located in the USA, and Canada. Popular trends show the movement of centres to exploit a larger cost savings to countries such as India, Philippines, and South Africa. It becomes apparent that there are savings to be enjoyed but a higher level of risk management may be required. Savings can only be attained if scale is large enough to support the Centre. What is scale for Call Centres around the world. It is different depending on the country.
The higher the fixed costs the larger the center must be to achieve a break even scale. In Canada and the US it is very low. Large centres are more difficult in the USA with saturation levels for some cities and the unattractiveness of some large cities as a key factor. In Canada large centres are more difficult with a population that is not as concentrated. Canada becomes a good location for smaller, 00’s of agents, locations that are specialized taking advantage of higher education and skills or as an excellent overflow taking advantage of our large multicultural population. India has high fixed costs and therefore larger scale requirements. Some areas maybe challenged by this but others are still available. Large centres have special requirements and higher costs. Indian culture and ease of doing business are different than American and usually make for a longer time horizon to see savings. Triaging calls as well as taking advantage of technology expertise are widely known. Philippines has a higher fixed cost and therefore greater scale and investment requirements. Their outstanding customer service attitudes and approaches as well as familiarity with American are key assets. South Africa combines contact with the UK with a ease of doing business and cost base that provides an excellent portfolio addition. World class banking and customer service provides a lower cost with good return alternative.
First let’s look at India and down the list. I won’t be spending much time on South Africa. They are the “dark horse”. When they get their telecom pricing and competitive policies in place they will be a very large competitor.
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