Telephone companies as outsourcers

Telephone companies, also referred to as telcos or carriers in this book, are a major component of the teleservices industry. They provide the communications infrastructure—cable, satellite, networking facilities, and other equipment essential to every form of electronic communication—and carry voice, data, or video data, both digital and analog. Using their vast networks of communications resources, telcos often provide call center outsourcing facilities as one element of their communication services to customers. There is some advantage to using a telephone carrier to provide outsourcing. For one thing, they undoubtedly have available the most current communication, networking, and call-management technologies. The communications business is highly competitive, and no telco wants to be left behind in the race to offer the latest technology in its core business areas.

Telco service offerings

Often, the outsourcing services offered by telcos are quite comprehensive and may include

§  Order fulfillment

§  Call handling

§  Transaction processing

§  Consulting services to improve efficiency

§  Methods of using the center to support the company's strategic goals

§  Offloading some or all of the in-house call center volume

A full outsourcing service contract with a telco could also include handling every aspect of an in-house call center operation, from call distribution and management, queuing, routing and call processing to each and every customer contact, from the first IVR interaction to faxing back order confirmations. Contracting these functions to a telco-based call center offers a considerable benefit to companies looking for a complete outsourcing package that will be maintained at the highest technological level.

Outsourcing is a natural extension of the basic business of telcos. Much of the communication expertise is already present as part of the telco's core business. They know how to handle calls and call centers, and some of their centers are among the world's busiest. Long-distance carriers have long used their own centers as test beds for their own new technology, including some of the enhanced network services that make their entry into the outsourcing field possible.

Increased revenues for telcos

For the carriers, the economics of providing outsourcing services are extremely attractive. Carriers generate much of their revenue by selling telecom minutes to call centers as well as to others. The 800 number traffic, the bread and butter of call centers, is also a key component of their revenue. Anything they can do to generate usage of their networks will enhance their revenues. Both providing a call center with an off-premise solution for IVR or a multisite option that lets the company hold calls in the network while waiting for an agent to become available are services that generate time usage. Discounts that bring long-distance costs closer to zero cents per minute may be offered to telco call center customers who elect to contract for these value-added services. (see Figure 1)

Figure 1: The 800 network.

Over time, carriers will gradually enhance their call centers by including agents and will eventually provide the same services as any other outsourcer. Some carriers have already taken on the role of call center "consolidators"—combining all the technology pieces under one contract.

Benefits of telcos as outsourcers

To reiterate, the attraction of carrier outsourcing services to the user organization is that they provide the opportunity to get up and running quickly with a center that the organization will help them build. Users can pick from a large menu of service offerings and hardware and software vendors to supply the applications. The carrier takes contractual responsibility to certify that all of the components integrate completely and successfully, and there is a one-number call for multivendor technical support.

Carriers have taken on an increased level of functionality, of the kind normally provided by an outsourcing organization. The advantage carriers have, as noted, is that they can configure their offerings, can push other vendors into working relationships because they are large organizations, can set standards, and have much closer relationships to call centers than the traditional outsourcer.

Choices to benefit the outsourcing customer

The more choices that call center users have, the better. The next few years will probably see a tremendous boom in the types of services a call center can outsource to a carrier network. Carriers will offer all the automated front-end transactions, especially IVR, and routing will be well handled outside the call center.

As a result of carriers "getting serious" about the outsourcing business, outsourcing will become specialized. For example, if a call center application has more to do with routing and automated call handling, the carrier may well be a better choice than the outsourcing vendor. On the other hand, if the application is more agent-oriented and involves customer-sensitive services like selling or servicing existing customers, a traditional outsourcer may be better qualified to provide the service.

Value-added services from carriers

Network services are being provided by the network carrier in the telecom network outside of traditional premise-based call center equipment. This can be a significant source of revenue for carriers because they can reduce toll-free services to a very low level and more than make up the difference by selling other services as value-added features. Networked services can provide virtual or distributed call centering, dispersing CSRs among many centers and routing calls among them as if they were all located at one site. Also included under the network services umbrellas is IVR, which extracts the customer input from the network, then uses this input to determine how to handle the call.

Web integration services

Web integration services are another burgeoning area of activity for call centers that network carriers can help them with. The technologies involved and the expansion of customer contact points pose significant contact management problems for call centers. Managers now need to cope with the technical and human resources issues that have cropped up from the explosion of Web access channels to the center. Live text-chat, call-me buttons, and even simple e-mail messages can create additional handling requirements for CSRs and managers alike.

Using the network to provide some automated handling of evolving customer contact channels—particularly IVR—is something telcos have been doing for years. They have always had the technology and the equipment to do this. When Centrex ACD facilities and the increasing demand for multisite centers are added to the picture, telcos are in an enviable position to offer a range of outsourcing services. For a call center, outsourcing network-based services, paid for either monthly or by transaction, offers a way to be more flexible in the face of unpredictable volume and varied access pathways.

Predicted growth patterns for the first five or more years of the 21st century indicate that there will be a lot of voice over IP (VoIP), even at the desktop, and a shortage of available and qualified CSRs to work in call centers, which will lead to an increase in home-based, telecommuting CSRs in some sectors. Pressure will therefore come from both call center organizations and the outsourcing community to move to network-based services. The growth of e-commerce and the electronic forms of communication that are a part of this business environment will make it extremely difficult to predict how many transactions will be handled electronically, rather than by live CSRs. From the carriers' perspective, increased competition is forcing them to look at service offerings as a way to differentiate their organizations from others in the business.

Ultimately, all of these new methods of conducting business, along with their technologies, will represent an opportunity for call centers to play mix-and-match with their technology and outsourced services. Network-based services will offer a suitable and acceptable alternative to premise-based equipment for a lot of centers and result in new ways of managing the call center operation.

Outsourcing and network-based call center services

Network-based services are any agent-support systems that traditionally occur within the center: call routing, transaction processing, database lookup, screen pop, among others. Over the next few years, there will be some amalgamation of call center outsourcers, not to mention mergers that will undoubtedly occur in the telecommunication sector. There will be competition to offer Internet-based transactions and video-enabled call centers. With these new offerings to expand the range of options for customers to contact call centers, there will be a wide variety of new and improved services, and call centers will be the beneficiaries. One researcher has reported that network-based call center services have been the biggest growth segment in the call center market, estimating that these services will generate more than $4 billion in annual revenues for service providers by 2005. This report further states that 35% of call center agents worldwide will use some type of network-based call center service, with nearly half of those using network services as their primary call distribution method.