In the 1990s, as part of a Doctorate study I sought an environment that had a high technology and human interface. I suggested call centers and my professors recommended that I find a more “strategic business unit” to focus on. I disagreed, and completed a Ph.D. titled Computer Technology as a Substitute for Leadership in Call Centres.

My vision for the contact-center industry 10 years ago was that by 2010, contact centers would be an organization’s most strategically important business unit. By 2010, these centers will no longer resemble the low-status contact centers where the least-valuable employees worked.

In this article, I will make five predictions about how the contact-center industry will operate in 2010. I will focus on the contact-center industries in Australia and India to provide evidence of these assertions.

Prediction 1: To be Strategic and Valued Business Units
Currently in India of all contacts made by customers, 80 percent of contacts are handled by a contact-center voice channel and another 8 percent are handled by a contact-center Web channel. Thus, nearly 90 percent of all interactions are the responsibility of the contact center, whereas only 5 percent are handled by the branch network and 6 percent of interactions are handled by the sales force.

The forecast for 2010 in India is that this percentage of interactions handled by contact centers will track close to 95 percent of all contacts made to an organization, and globally this percentage should average 75 percent. This high level of customer interface as well as the shift to contact centers being profit centers (Prediction #2) means that by 2010 there will be no more important business unit in an organization than the contact center.

Global Services PREDICTIONS

Offshore centers will move closer to the time zone of customer countries, resulting in more customers being serviced out of LatAm (for North America), and East Europe and North Africa (for Europe)

There will be an increase in automation brought on by speech technologies, but it will not significantly replace agents.

Prediction 2: To be Profit Centers
C-level executives now realize that the most cost-effective method of selling to customers is through the contact center. Currently, in Australia 59 percent of in-bound contact centers report opportunities to up-sell and cross-sell to customers, and in these centers about half of all calls are regarded as opportunities to sell. In Australia, this currently equates to about $16 billion of revenue generated by the contact-center industry per annum.

Although today two-thirds of all contact centers globally are measured as cost centers, one third already operate as profit centers, and by 2010 this is expected to increase to 50 percent being profit centers.
Over the next three years the industry will need to focus on: Increasing agents’ sales skills; establishing a sales culture; and implementing technology that supports the sales process.

Prediction 3: To Use the Web, Self-service Channels
The next great influence on the contact-center industry will be the age of the Gen. Y consumer. Gen. Y are the 16 to 30 years olds who are history’s most powerful consumers, are materially focused, see value connectivity through technology, are permanently connected to mobile devices, like to spend money and don’t like to expend energy in interacting with organizations. callcentres.net’s research shows that Gen. Y is happy with the automation (especially Web or speech) of routine- and medium-complexity transactions, they want 24x7 mobile access, and will prefer to interact with technology if they are required to wait on hold.

Presently in India, 45 percent of all contact-center interactions are handled by agents; 39 percent are handled by IVR (Interactive Voice Response) and agents; 5 percent are handled by email; 3 percent by IVR only; and about 2 percent by Web chat or text. We expect to see a much stronger growth in the Web, speech and SMS channels over the next three years.

Prediction 4: To Use SIP and Home-based Agents

The current pressure to continually differentiate service, reduce costs and manage HR challenges will drive contact centers toward being virtual. Already a number of advanced IP-enabled contact centers have dissolved the four walls of the standard contact center, and have virtual agents, either through:

• Session Initiated Protocol and presence, where subject-matter experts in the organization can log on and register that they are “present” to take calls, or
• By routing overflow calls to other parts of the organization; or
• By having home-based agents.

By 2008, 20 percent of Australian contact centers will allow home-based work, and by 2010 we expect about 30 percent of contact centers globally to be working with some virtual capacity. IP enablement will be essential.

Prediction 5: To Cater to Offshored Work
The current pressures on contact centers discussed above mean that many organizations must consider offshoring contact-center work. The primary driver for offshoring is still cost savings. An experienced agent in Australia is paid about $35,000 per annum, whereas an experienced agent in India or the Philippines is paid about $4,000 per annum, so the savings are substantial given 69 percent of an Australian contact-center budget is HR costs.

Currently, the level of outsourcing and offshoring of customer-interfacing work is much less prevalent than other BPO work (IT, HR, financial accounts management and financial applications). In Australia, only 6 percent of organizations outsource their customer-interfacing work, and another 8 percent is predicted to be outsourced by the end of 2007. Despite this, based on the significant pressures of increasing wages, low unemployment, increasing operational costs, by 2010 one third of all firms will outsource some of their service work.

To reach this goal by 2010, countries offering outsourced services will need to concentrate on: Quality of the telecom infrastructure; ease of doing business; accent and language skills; political stability; and access to advanced technologies. Given the rapid advancement of South Asian countries, by 2010 these nations should be well placed to effectively support a greater level of offshored service work.

The ideal contact center of 2010 will be a profit center, with primary revenue-generation responsibility, with growing revenues coming from Gen. Y consumers who are interacting using technology. Centers will be IP enabled and service/sales agents may operate remotely in a flexible work arrangement, creating a more desirable job. These characteristics should apply to both captives and outsourced contact centers.    

callcentres.net is an analyst organization for the outsourcing and contact center industries in Australia and Asia-Pacific.