BT has problems returning contact centre jobs & workforce management

It was only in July that British Telecom announced that it was returning at least 2,000 contact centre jobs back to the UK. I covered it in the post "British Telecom brings back contact centre jobs to the UK" and thought it was excellent news.

Now it seems there are problems as The Times reports that British workers are unwilling to cover the shifts that the Indian employees worked. The union is arguing that it is difficult for some employees with family commitments to change work patterns. I have a feeling this story is perhaps subject to an element of 'PR spin'. The Communications Workers Union is (I suspect) negotiating hard for its members, as it should, and BT is haggling over how much it flexibility it can get from it staff. In short, both sides are doing exactly what they should, and it will tend to look ugly until they get to an agreement.

To a certain extent these issues with shift work and agent availability are relatively familiar and have long been addressed by the call centre industry.

Whether through agent skills, or personal reasons, or employment legislation there are always restrictions on which calls which agents can take. This is why there is a lucrative industry of contact centre workforce management (WFM) software and why these products are needed in most large call centres. I've gone into the subject in some depth in the post "Workforce Management - is it only for high end call centres?" back in 2007, but it may be worth a re-visit. The point is, that with this software it is possible for BT to automate the management of some elements of their call centre changes without great cost.

British Telecom brings back contact centre jobs to the UK

Amidst all the gloom, it was good to see one positive news story. Yesterday, The Times reported that British Telecom was to bring at least 2,000 jobs back to the UK from India. In some ways it's a very significant move that, despite a recession and the cost problems at its Global Services arm, BT is not looking at running it's contact centre on the lowest possible cost base. In fact, BT is planning to close about half its Indian operation.

I was interested to see in the report that Ian Livingston (the BT CEO) denied that this was to do with customer service, despite a popular perception that BT hasn't got good customer service. The blog has looked at this previously (see the post from last year "CEOs of BT, the Royal Mail and Corel discuss telephone customer service"), and BT were quite open that they did not consider their customer service optimal.

I'm not sure this was a particular problem from their Indian operation, but it is certainly the case that Indian no longer represents the cheapest destination for offshoring and I've never thought India should compete for work on that basis. The problem is (as I've discussed in posts like "Indian Outsourcing, is it in decline?") is that many Indian organisations have competed on a cost basis and so have not necessarily delivered on quality or customer satisfaction. As a result, customer perception (regardless of the reality) is that many offshore contact centres are not going to meet their needs.

BT may have its own additional reasons for bringing the work back to the UK, such as wishing to minimise UK redundancies, but I think the CEO will appreciate any gains in customer satisfaction that this brings!

Axa to create 600 new UK contact centre jobs

A piece of good news reported on CCF, "AXA to create 600 jobs". I was particularly interested to see that these jobs are onshore in the UK.

The blog has looked at Axa contact centres before, at least the Swiftcover bit of the business) in the post "Are call centres so bad they hinder business?", so it's good to see that another part of Axa has more confidence in the power of customer service.

It's one of those things where the insight comes from the detail. The part of Axa creating these jobs is Axa Helathcare, and the part with the aversion to call centres is Swifcover who specialise in motor insurance. These are very different business, with different margins, expectations of service and complexity.

I've written on this a lot before, but Axa encapsulates this neatly. If the service required is simple, move it to the web. If it's complicated and a brand differentiator, then think about onshore and service quality as higher priorities than simple cost to serve metrics. It's noticeable that this contact centre will not just be onshore, but be in Kent (not the traditional lower cost contact centre areas of the North of England or Scotland). Presumably the ease of access to London and Paris, as well as access to high quality labour from a large catchment area influenced the thinking.

The view of automate or keep it high-quality isn't just my thinking, more authoritative writes than me have covered this, such as Sramana Mitra and her controversial article "The Coming Death Of Indian Outsourcing" in Forbes (covered on this blog at: "Indian Outsourcing, is it in decline? ").

I can see strong value in offshoring some back-office functions (see "Lloyds TSB offshores IT, not call centre"), but I do believe that if customer service is to be valuable, then it needs to be done with quality agents who understand the environment the end customer is in. This partly why I do see roles for countries like South Africa (see: "Offshore - why I would go for South Africa over India"), but I struggle to see a role for countries that try to bid for customer service business on a cost basis.

Still very good news in the current economic environment to see jobs being created.

Sallie Mae - Customer service or protectionism?

An interesting story on Finextra that Sallie Mae is looking to bring back onshore around 2,000 jobs.

It's a trend that so far in Europe has been primarily associated with customer service. I've covered some other business that have brought work back onshore in previous posts (see "Despite the credit crunch, still call centre growth at Barclays" or "HSBC creates 250 UK call centre jobs & offshore in decline"), and in the UK this trend for onshoring has also been the case for non-financial services companies like Orange.

The main reason up to know for taking previously offshored work back onshore has been problems with customer service. This hasn't necessarily been a language competence issue (though sometimes it has been) but has been primarily about how agents' accents, soft-skills and cultural awareness have not always tied into the image a brand has wanted to project. It's also been the case that a broken customer service processes don't get fixed just by moving country. There is also little point for a firm to spend a great deal on marketing if the media regularly cite them as an example of poor customer service.

Sallie Mae, though, seems to be the first example of what might be a new trend. Their CEO is quite explicit that this drive back onshore has nothing to do with customer service, and is quoted in the Finextra article as saying:

"The current economic environment has caused our communities to struggle with job losses. They need jobs, and we will put 2000 of them into US facilities as soon as we possibly can,"

Sallie Mae does need to be attractive to politicians in the market it serves, but that need is not just confined to US financial institutions at the moment. It will be interesting to see if this drive back onshore to win favour with national politicians becomes a trend. Often it is some of the European countries who are most associated with protectionism, but my view is that this will only work for the countries that do it if it also gives customers better service.

Indian Call Centre Fraud and the BBC News

The BBC was very excited about its story "Overseas credit card scam exposed " that it ran on the Thursday night news bulletin.

While they did make some good points, they played too much for my liking on the fear around offshoring. the BBC were correct to highlight that India has no equivalent of the UK Data Protection Act and that consumers dealing with an overseas call centre need to appreciate UK legislation may not apply to their data.

The problem is that the main thrust of the report was on what appears to be the theft of data (ironically enough) from the call centre of the security firm Symantec. Data theft is an extensive problem, but it's not one that just happens in India. Only last week, CCF (the UK contact centre news site) was reporting that a British Airways call centre employee had been jailed for two and a half years for data theft. Similarly CCF also reported at the start of March that a Barclays call centre worker had been jailed for obtaining money by deception.

This isn't just a recent phenomenon - this blog has written on thefts at RBS and Barclays by call centre staff (see posts "Call centre worker gaoled for data theft" and "Security, Call Centres and Fraud "). In short theft by employees is a problem in call centres, as it is in many other businesses, but it's not just an Indian problem.

Abbey National - did an IVR survey lead to a customer getting locked out their account?

This blog sometimes flirts with the idea of news, rather than just comment, and I couldn't resist this story. I saw it today in the Scotsman (though it's also more detail here in the Daily Mail).

In brief a Mr. George Bates, a 23 year old Abbey National customer, phoned his bank to arrange an overdraft. He claims to have found that the operator was rude, unhelpful and with a heavy Asian accent that was difficult to understand, so at the end of the call he used the automated post-call survey to register his displeasure. A lot of banks use IVRs (Interactive Voice Response Systems) for this as it suits the "push 1 for...., push 2 for...." type of menu that an IVR provides. Anyway, Mr. Bates pushed ones and twos for low scores and finished his call.

When he called back the next day his problems began. He couldn't access the phone bank with his password, the ATM swallowed his card and when he got into his branch he found his identity had been changed from the 23 year old Bristol carpenter he is, to that of a 33 year old Ugandan divorcee. His direct debits had also been cancelled and he was incurring bank charges for missed payments. Abbey have now apologised and offered £200 compensation, but Mr. Bates is still unhappy.

There are some lessons from this story worth pondering.

The first is what price does a bank place on its reputation? I've blogged on this before (see: "Are call centres so bad they hinder business?" or "Barclays, silent calling & we've been here before... "), but contact centres can damage an organisation's reputation very quickly. It seems a mystery that such an important part of a customer's experience of an organisation should be managed as a cost centre and yet other functions that drive reputation and brand (e.g. marketing or PR) should be seen as investments or necessary expense.

The second is that while it's admirable that agents should be given continuous feedback on their performance, they really should not be able to take revenge on customers who score them poorly. There's a whole set of issues here, from the granularity of the feedback given to agents to the level of access to customer data that agents have. Supervision, audit trails and analytics might also be points to think of here in terms of how organisations control agent behaviour.

The third and final point is that the public do not much like offshore contact centres. This is an image that the offshore industry has acquired and has not managed to shake off. I'm sure that had a British call centre worker done this the story would have been much less newsworthy, but as it's an Indian call centre (and Abbey have five UK call centres and only two Indian ones) this fits a lot of popular myths about the offshoring industry.

There may be a view that "all publicity is good publicity" (and you certainly couldn't buy the press coverage this story is getting), but I suspect that Abbey will want to change the way it runs its contact centres as they will not want their reputation damaged in a credit crunch that has hurt the reputation of UK banking so much.

HSBC creates 250 UK call centre jobs & offshore in decline

After a week off sick there's been a lot to blog on.

I was interested in the Finextra story "HSBC creates 250 call centre jobs". The interesting thing for me is that these are onshore jobs. HSBC has always had onshore operations but has also been one of the firms that has pushed call centre jobs to India. The onshore operations have tended to focus on high quality customer service (see past posts like: "The contact centre agent experience - First Direct") whereas it's always been my suspicion that cost is the primary motivation for the Indian operation.

I'm not against either cost saving or offshore, I just have strong reservations that India for lowest possible cost is a sensible customer service strategy. If offshore is an appropriate option, I've tended to look at South Africa ("Offshore - why I would go for South Africa over India"). I know there are issues with South Africa as well (SA Telecom and crime being two of the big ones), but the cost savings and availability of English are strong factors in that locations favour.

HSBC is also just part of a larger trend back onshore. Earlier this month Orange announced that it was moving 500 call centre jobs back to the UK from India, but at the same time was shedding 450 onshore administrative jobs. This is very similar to what Lloyds TSB did last month, when it decided to offshore its IT rather than its customer facing operations (I covered the story here on the blog or here on Finextra).

In short, I think the trend for customer service to go offshore has almost come to an end but administration, back-office and IT might all go offshore to a much greater extent.

Indian Outsourcing, is it in decline?

Following up Monday's post, can I recommend a good article challenging commonly held assumptions. It's by Sramana Mitra and is called the, "The Coming Death Of Indian Outsourcing" and is available either on Forbes or on her blog.

Very similarly to my post on Monday she looks at whether it is sustainable to compete on cost in the longer term. She makes the good point that if India continues to experience wage inflation for skilled labour at current rates, it won't be able to compete on cost and it is debatable if it can compete on value. She writes generally about the Indian IT industry, but I think her points apply equally to the Indian call centre industry. Her point on innovation (or the absence of it in many offshoring propositions) is particularly valid.

My view is that some of the larger Indian companies (Wipro, Tata, etc...) probably will adapt and remain competitive, as will the the wholly owned Indian subsidiaries of multi-nationals like IBM and Accenture. These firms, though, offer a much greater value proposition than just cost reduction.

In contact centres, I suspect there will be a similar trend. Indian wage inflation will push work back to Europe (especially Eastern Europe) and to newer destination like South Africa (see my post from last year "Offshore - why I would go for South Africa over India" and "Offshoring and mainland Europe").

Onshore, Offshore & Internet Resilliency

It's been a busy week for me. Mostly I've been working in the North of England and just haven't had time to blog. I've been with a range of customers, from some major banks and to some regional outsourcers and medium sized businesses. All very interesting to see and good to see that most of these onshore operations were doing well.

What made it even more interesting was that this week a ship's anchor severed one of the key undersea cables connecting Europe to the middle east and India. This lead to significant challenges for some offshore operators of contact centres. One of the interesting things that this highlighted is that while it is popularly assumed that the internet is resilient because of the way IP packets can be routed, parts of the internet are not that resilient (though the system as a whole is). It should also be understood (and usually isn't) that 'resilient' and 'latency free' are not quite the same thing. Data may cope well enough with high latency (applications, e-mail, etc... are just a bit slow), but voice and video do not not cope so well. If you have an hour and half to spare Vint Cerf, one of the designers of ARPANET and the internet has a good video on Youtube where he explains some of this in more detail in his lecture at Google's Zurich site.

This is blog has always held the view that while offshore is not intrinsically bad if done sensibly, there are usually better ways of tackling call centre challenges (see posts like: "Offshoring and mainland Europe"). I've also argued strongly for nearshoring or at least not to approach offshoring on a purely cost basis.

I hadn't actually considered weakness in internet cabling as a major reason for avoiding remote offshore, but clearly it's something to be factored in. The impact may not have been huge this time but blogs within the financial services community, such as Chris Skinner's, show that customers at even major UK banks were affected despite public statements to the contrary.

Clearly nearshore and onshore call centres have a strong card to play going forward as few organisations would consider a repeat of this week's service disruption a risk worth running.

Speech market share - the role of non-European langauges

Some very good comments on the "Speech Market Share" posting I did in October, especially from Martin on Telisma and why they might have achieved such a large growth in European marketshare.

I was particularly interested to see that Telisma support Hindi and are working on another 18 Indian languages (including Indo-Arayan and Dravidian). This could be very interesting for a couple of reasons.

Firstly it's the established capability developed for the domestic market that I see as crucial for successful offshore operations. This is partly why in previous posts ("Offshore - why I would go for South Africa over India"), I've tended to rate South Africa ahead of India as a location for off-shore contact centres. If India can build a domestic capability then it's ability to take on offshore work will also improve. Also, and perhaps further off, the skills developed by Indian software developers working on speech for the Indian market could be very helpful for South Africa with its eleven official languages develop speech for its domestic market.

The second, and perhaps more unexpected use of speech is to serve migrants in Europe. These groups can be significant demographic segments and well worth offering higher service for. For example HSBC launched a UK Islamic bank in 2003 and it is easy to envisage it offering multi-lingual support for its customers. Perhaps further ahead is Canada. When I worked there I was expecting English and French telephone banking, but was surprised that Scotiabank telephone banking was available in not just English and French (as you would expect), but also Cantonese and Mandarin. It turned out that these languges gave them a competitive edge for winning business in the SMB market segment.

Given my experience of working with Canadian call centres, I am surprised that UK banks have not moved further with multiple language support. This may be a cost issue (given how cost concius the UK is) and perhaps the ability to offer automated support will change that.

Offshore - why I would go for South Africa over India

From previous posts you might have concluded that I'm against offshoring.

I'm not.

What I am very against is the offshoring school of thought that is 'your mess for less' or just aims to reduce all service levels to an absolute minimum. To me this misses the point that offshoring provides many opportunities to do far more than reduce cost.

My feeling (and it's only an impression) is that at least for the UK market, India sold itself very successfully on cost. That was a successful strategy to win business, but ignoring service quality (or being too low cost to deliver it) has been bad for keeping the business. A YouGov survey earlier this year found that over half of UK respondents' biggest gripe was dealing with overseas call centres. It wasn't just xenophobia or an objection to offshore, it was that only 4% of respondents reported getting good service.

UK companies have begun to realise that while contact centre operating cost can be cut dramatically by going to India, that cost saving is nothing compared to the news cost to your brand reputation and the cost of increased customer churn. It also can allow your competitors to gain market share at your expense (see Nat West bank's advertisements stressing their UK call centres) and the examples of companies like Powergen which last year closed its Indian operations and brought them back to the UK specifically because of customer service.

By contrast, South Africa (from what I have seen) has approached the market very differently. I was impressed with what I saw at the UK's Call Centre Expo a few weeks ago where the focus was on stressing South Africa's better service levels, native English, shared timezone to the UK and developed infrastructure. The infrastructure is an important point, particularly the IT infrastructure. Large South African firms like Old Mutual, Anglo-American and Telecom SA have all run sizeable IT operations and although skills are not in oversupply most technology skills are available. The local economy is also sufficiently advanced for there to be significant call centres serving the local market. Crucially this means that South Africa can look at providing more than just first line customer support and take on technical support, internal IT support and elements of back-office processes. Cost reduction is a key part of the value proposition to UK organisations (have a look at Cape Province's figures and references) but it is cost in relation to the higher value of the work that can be taken on. Similarly in Gauteng, IBM have grown substantially providing these type of service to European clients and Dimension Data also run substantial operations under the banner of their Merchants subsidiary.

Encouragingly, I don't think South Africa represents a large threat to UK call centre market and may well ending up complimenting it. I suspect we're likely to see processes split between countries with parts of work being handled onshore and parts going to South Africa.

Of course that requires companies to be able to manage data and voice traffic seemlessly across continents, and that's where Cisco has some very good technology. We have a number of customers using technology like our ICM product to deliver virtualised call centres across national borders and this seems to be a trend that is increasing. You can also get a good graphic of ICM in action here. There is a clear trend in multinational companies that if you are going to manage customer service properly, you should do it with all parts of your enterprise, regardless of where they are located and do it well. The capability exists to do it anywhere, but that decision should not be driven by cost alone.