Site Selection for your Contact Center
The boss has just asked you to head up the search for a new location for your contact center. You are flattered by the confidence that the boss has in you, you are confident that you can accomplish this task, just as soon as you figure out what to do. The business of site selection has changed considerably in the past decade.
Ten or fifteen years ago we worried about moving our call center off the subway line and today we worry about relocated the center internationally. In both scenarios the key to finding the best or ideal location was tied to finding or keeping staff. In a intra-city move you are concerned with where you can locate and retain most of your staff. In a search to find a location outside of the urban location you previously occupied the focus become where can we locate a center and have access to potential staff.
Of course the connection between labour and location is not and cannot be the only consideration, or if salary cost was king we all would have off-shored our call centers long ago. No, labour, labour availability are critical factors but not the only ones. Other factors that require attention. At Watts we developed a center location matrix that considered 134 factors on a weighted score basis that created a range of more than 500 basis points from the worst possible to the best possible scores. It is important that you develop your own matrix for evaluating and assessing potential locations. Some of the factors that you should consider would include not only staff or workforce issues ( what is the population, what is the employment/unemployment levels, workforce participation, college, university or military base presence all speak to potentially available labour which could be potential recruiting targets for the call center. Assessing the number, type, function and staffing levels of existing call & contact center can provide guidance related to the level of saturation that call/contact center represent in the local workforce. It is important that we locate in a market where we can identify potential sources of employees and identify that there are enough potential workers to support the center, but we also nee to look at how many of them are presently employed in call or contact centers. In my opinion the lower the saturation the better, though you can no longer find locations without contact centers you can find locations that have low saturation levels. We recommend to our clients that markets with more than 6% of their workforce presently supporting call/contact centers will represent on-going recruiting and retention issues, while under 3% can tend to be stable and much easier to operate within. Given that labor is the single greatest expenses in a call center and the cost to recruit a single agent exceed $3,000 finding a stable and easily maintained environment is highly desirable. Other factors for general site consideration would include:.
Population local
Population 45 minute draw area
Workforce Local
Workforce 45 minute draw area
Unemployment %
Unemployed
Under-Employment %
Under-Employed
Participation Level
College/University
Military Base
Other Call Centers
# Type of Centers
Total Call Center Seats
Call Center Saturation
Call Center Saturation
Proximity to airport
Available Real Estate
Estimated Operating Rent
Estimated Leasehold Improvements
Build to Suit' Options
Population Growth %
Average Income
Average house price
Level of Education (% of Pop)
Quality of Life
Public Transit
Infrastructure- Public
Infrastructure- Electricity
Infrastructure- Telecom
Severe Weather Occurances
Available Incentives
Incentives
Right to Work State
History of Union activity
Starting Call Center Wage
Median Wage Customer Service
Some of these suggested criteria are straight forward and others require some explanation. Infrastructure is critical to call center operations. We expect the call center to operate regardless of external factors. Of course we can provision for business continuity through back up power, redundant telephony connectivity etc, but the single largest factor influencing operational survivability will be the location and its pre-disposition to: floods, power outages, hurricanes, snow etc. Of course we must remember that some locations such as the Canadian Atlantic region may get a great deal snow each season they are used to this and have built buildings and infrastructure in expectation of these conditions. Businesses in the State of Virginia lose more work-days to snow than does Prince Edward Island.
Real estate in any considered location is alos critical. If you have found a great market with no available real estate that is suitable, then you options become delaying the project in hopes that something suitable becomes available (unlikely in a small market) or to delay the project and build to suit. This is often a longer and more capital intense option, though can proven to be have the lowest total cost of ownership/operation over a 5-10 year operating window.
The prevalent wages in the target market, associated level of education at that wage level, prevalence of union activity are all valid considerations and ones you must assess and incorporate in building a budget.
If you are considering a US location you will find some additional considerations: Right to work states, which ironically really reflects that the opposite of the right to strike. Right to work states tend to be significantly more favourable to business than non-right to work to work states. The second key factor can be one party versus two party states. This refers to the number of parties that need to be informed that a call is being monitored or recorded. Of course a two party consent state will require that the customers consent be secured whereas in a one party state this is not required.
Incentives opposite job creation still exist though the salad days of governments handing out millions without any real basis for accountability or reconciliation. Today the available incentives are closely tied (where present) to long term employment and are generally available as tax credits in the US and training grants within Canada. In both countries this is positioned as ‘recoverable’ meaning that the government can recover these dollars should the company fail to deliver the agreed employment levels.
Finding a new call or contact center (or any back office function can be very challenging) and that is why a number of firma and organizations have come into existence to serve this market. They generally fall into two camps: real estate driven companies, often spun off from commercial real estate firms that see call and contact center as desirable tenants, who seek new tenants for suitable vacant space. The second type are consulting firms who approach this from a form & function perspective. There are a number of excellent firms within each of these groups and your determination of which is better for you often comes down to the level of specialization and uniqueness your center possesses. The more specialized in terms of staff, space requirements and the smaller the size the less interesting it will be to a real estate based firm.
Before you do anything to find a new location, assess what has worked well and what has work less well in your current location and start to compile a wish list for your new location and the either start to contact potential jurisdictions you feel align well with your goals and objects or begin to interview and external firm that has the experience and capabilities to assist you in this endeavour. In my experience building, operating our own centers and assisting client to source more than 40 center locations I have employed all of the above approaches and no one is the best. Your choice will be , as mine have been based upon the specific goals, objectives, timelines and budgets of the project. So long as you do your homework you can succeed in creating a productive, efficient and cost-effective location for your new call center that will remain so for many years.
Saturday, September 22, 2007
Thursday, September 20, 2007
Contact Center Industry Stats
Industry Size
There are presently 60,850 contact centers (with 10 seats or more) in North America, representing 3.3 million agent positions[1]. Those centers with less than 100 seats represent more than 44% of all contact centers and 1.36 million agent positions.
Gartner has valued the Customer Interactions Services Industry (contact centers) at $28 billion dollars per annum within North America, with 30% or $8.4 billion) of this figure representing outsourced activity Outsourcing service agencies (both inbound and outbound) represent 5.1% of the total number of contact centers equating to approximately 2,900 centers. These centers have a disproportionate representation in agent positions (AP’s) with approximately 313,000 AP’s. The average Outsource agency footprint is 108 agents per center (versus the overall average of 54 agents per center across the industry), or 10.2% of all North American agent positions.
In Canada, the outsource vertical represents 8.9% of the approximately 4,000 Canadian contact centers. There are over 41,000 outsource agency AP’s in Canada, representing 14.2% of AP’s. This equates to an average outsource contact center footprint of 118 agent positions.
The shift from US domestic call center locations to offshore and near shore locations will continue for the foreseeable future with US outsource agency seats declining an estimated 8.5% from 2004 to 2008[2]. Contact Babel has forecast that the number of AP’s in the US will shrink by 2% between 2006 and 2010. While the number of Canadian AP’s will grow by 8.6%. The majority of the estimated 40,000 AP’s lost over this time will be a result of move to nearshore and offshore locations. The largest USA AP reductions are forecast to be in the outsource space with a 6.6% reduction. This is followed by Telecom and Finance declining 6.0% and 4.4% respectively. These two verticals alone represent Full Time Equivalent (FTE) employment loss of more than 75,000 jobs over this period. Strong growth in other verticals, Public Services in particular offsets the overall declines to a degree. Retail support, catalogues, shopping and logistics will remain the largest verticals each with more 480,000 AP’s.
The following table presents the McKinsey perspective on the outsourced suitability and risk. While this was published in 2004, it remains accurate today.
[Contact Author for full content]
Figure 1: McKinsey 2004
If we examine specifically the call and contact center industry the following hierarchy exists in relation to suitability of work to be outsourced and/or off-shored. As the chart below illustrates the key considerations revolve around the complexity of the transaction and the value of the underlying business relationship that the transaction is a part of.
[Contact Author for full content]
The lower the transaction complexity, and the lower the underlying relationship value, the greater the likelihood of the task being outsourced or offshored. The likelihood of success, from a clients perspective, of the outsourcing endeavour also increases the lower the complexity and relationship value.
The US contact center industry by region
Region
Agent Positions
Jobs
Contact Centers
Working Population
% Employed in Contact Centers
Average size (AP’s)
West
583,159
991,370
12,246
32,392,000
3.1%
48
North-East
810,399
1,377,678
13,344
26,359,000
5.2%
61
Midwest
791,838
1,346,125
14,230
32,724,000
4.1%
56
South
884,604
1,503,827
17,080
50,235,000
3.0%
52
TOTAL
3,070,000
5,219,000
56,900
141,710,000
3.7%
54
Contact center density, the percentage of the workforce employed in call and contact centers as a percentage of the total workforce, ranges from a high of 6.2% of the population employed in contact centers in New England to a low of 2.3% in East South Central (Kentucky, Tennessee, Mississippi and Alabama). Higher density equates to higher wages or turnover and higher operating costs for the center. This density also results in the majority of new center construction occurring in areas where the center density is under 3% (East South Central, South Atlantic and Pacific). Over time this trend will continue to drive up wages, turnover and operating costs and increase the density in those areas.
[1] North American Contact Centers Report- Contact Babel
[2] Contact Center Outsourcing in the United States - Datamonitor
There are presently 60,850 contact centers (with 10 seats or more) in North America, representing 3.3 million agent positions[1]. Those centers with less than 100 seats represent more than 44% of all contact centers and 1.36 million agent positions.
Gartner has valued the Customer Interactions Services Industry (contact centers) at $28 billion dollars per annum within North America, with 30% or $8.4 billion) of this figure representing outsourced activity Outsourcing service agencies (both inbound and outbound) represent 5.1% of the total number of contact centers equating to approximately 2,900 centers. These centers have a disproportionate representation in agent positions (AP’s) with approximately 313,000 AP’s. The average Outsource agency footprint is 108 agents per center (versus the overall average of 54 agents per center across the industry), or 10.2% of all North American agent positions.
In Canada, the outsource vertical represents 8.9% of the approximately 4,000 Canadian contact centers. There are over 41,000 outsource agency AP’s in Canada, representing 14.2% of AP’s. This equates to an average outsource contact center footprint of 118 agent positions.
The shift from US domestic call center locations to offshore and near shore locations will continue for the foreseeable future with US outsource agency seats declining an estimated 8.5% from 2004 to 2008[2]. Contact Babel has forecast that the number of AP’s in the US will shrink by 2% between 2006 and 2010. While the number of Canadian AP’s will grow by 8.6%. The majority of the estimated 40,000 AP’s lost over this time will be a result of move to nearshore and offshore locations. The largest USA AP reductions are forecast to be in the outsource space with a 6.6% reduction. This is followed by Telecom and Finance declining 6.0% and 4.4% respectively. These two verticals alone represent Full Time Equivalent (FTE) employment loss of more than 75,000 jobs over this period. Strong growth in other verticals, Public Services in particular offsets the overall declines to a degree. Retail support, catalogues, shopping and logistics will remain the largest verticals each with more 480,000 AP’s.
The following table presents the McKinsey perspective on the outsourced suitability and risk. While this was published in 2004, it remains accurate today.
[Contact Author for full content]
Figure 1: McKinsey 2004
If we examine specifically the call and contact center industry the following hierarchy exists in relation to suitability of work to be outsourced and/or off-shored. As the chart below illustrates the key considerations revolve around the complexity of the transaction and the value of the underlying business relationship that the transaction is a part of.
[Contact Author for full content]
The lower the transaction complexity, and the lower the underlying relationship value, the greater the likelihood of the task being outsourced or offshored. The likelihood of success, from a clients perspective, of the outsourcing endeavour also increases the lower the complexity and relationship value.
The US contact center industry by region
Region
Agent Positions
Jobs
Contact Centers
Working Population
% Employed in Contact Centers
Average size (AP’s)
West
583,159
991,370
12,246
32,392,000
3.1%
48
North-East
810,399
1,377,678
13,344
26,359,000
5.2%
61
Midwest
791,838
1,346,125
14,230
32,724,000
4.1%
56
South
884,604
1,503,827
17,080
50,235,000
3.0%
52
TOTAL
3,070,000
5,219,000
56,900
141,710,000
3.7%
54
Contact center density, the percentage of the workforce employed in call and contact centers as a percentage of the total workforce, ranges from a high of 6.2% of the population employed in contact centers in New England to a low of 2.3% in East South Central (Kentucky, Tennessee, Mississippi and Alabama). Higher density equates to higher wages or turnover and higher operating costs for the center. This density also results in the majority of new center construction occurring in areas where the center density is under 3% (East South Central, South Atlantic and Pacific). Over time this trend will continue to drive up wages, turnover and operating costs and increase the density in those areas.
[1] North American Contact Centers Report- Contact Babel
[2] Contact Center Outsourcing in the United States - Datamonitor
Sunday, September 16, 2007
IP Telephony Seminar in Toronto
If you are considering deploying VoIP or IP telephony in your organization, then this seminar will be of interest to you. The seminar on Oct 3rd at the Toronto Board of Trade is being hoosted by Premcom who have just opened up a Toronto office. Premcom is based i n Buffalo NY and hasbeen one of ShoreTel's top resellers for a number of years.
The seminar will include on overview to VoIP and specific details on the ShoreTel approach and architecture. There will also be a full demonstration of ShoreTel IP telephony.
ShoreTel is the only 'pure' IP telphony manufacturer. Other manufacturers have compromised their architecture by dragging extensive legacy requirements or have compromised their architecture through acquisition. The architecture is what sets ShoreTel appart and is one of the reasons it has been rated #1 in user satisfaction four years in a row by independant research company Nemertes.
Pure IP architecture, Ease of use and low TCO are just a few reasons you should attend this seminar. You can register by calling 416-979-2130 or send an email to me at ctaylor@premcom.com and we will send you and invitation.
The seminar will include on overview to VoIP and specific details on the ShoreTel approach and architecture. There will also be a full demonstration of ShoreTel IP telephony.
ShoreTel is the only 'pure' IP telphony manufacturer. Other manufacturers have compromised their architecture by dragging extensive legacy requirements or have compromised their architecture through acquisition. The architecture is what sets ShoreTel appart and is one of the reasons it has been rated #1 in user satisfaction four years in a row by independant research company Nemertes.
Pure IP architecture, Ease of use and low TCO are just a few reasons you should attend this seminar. You can register by calling 416-979-2130 or send an email to me at ctaylor@premcom.com and we will send you and invitation.
Tuesday, September 11, 2007
10 Dumb Things Smart Contact Center Executives Do
Ten dumb things smart Contact Center Executives Do
There are a lot of smart, very smart individuals managing and directing call and contact centers today. Yet, these bright, bright people still manage from time to time to do things that defy understanding. This is my top ten list of really dumb things that smart call and contact center executives do. If you have any dumb things to add to the list let me know by email at ctaylor@thetaylorreachgroup.com .
1- Don’t invest in training or professional development.
We spent enough money to train them when they were hired, why would we want to keep them current on changes in the company our processes our customers or technology. They’ll figure it out. Besides we can always use the dollars allocated to training for other areas like executive retreats.
2- Don’t stay current on new technologies impacting on the call and contact center operations.
After all why would we want home agents, speech recognition, higher quality or better staff morale and management?
3-Don’t read trade press, blogs and newsletters.
We already know everything, and besides who has time to read when I an constantly in meetings.
4-Don’t include remote staff in your operational budget.
There aren’t very many of them out there…is there?
5-Don’t share new technologies and their capabilities with senior management.
They will just say no, so what is the point.
6-Don’t share ideas concepts and results with Marketing.
After all they never share with you.
7-Don’t consider the agents point of view when you examine new technologies.
Its just one extra open window on their desktop…they have done fine with the current 14 so what’s one more window?
8- Don’t give agents authority to make any decisions.
It is important that managers make all decisions…I know it is only a $.49 credit, but it’s the principal of the thing.
9- Don’t take a long term view of your incentive program.
Incentive programs are designed to generate short term results. I just don’t understand that while our incentive to reduce average handle time was so successful our call volume increased substantially.
10- Don’t share with HR the staff and skills/competencies work best in the center.
Turnover is a part of life in a contact center so we shouldn’t try to address it.
Each one of the above list reflects comments (or a paraphrased version) that I have heard from contact center executives. Each of the above points reflects a narrow and/or short term view of the center. Now as I said above these are clever people, so how can such ‘tunnel vision’ exist within a group of specialists? The can be many causes that can create situations of ‘tunnel vision’, these can include:
Lack of time: The old saw that “meetings are a nice alternative to work” rings true in many organizations and contact center are not exempt. Days filled with meetings, limits interaction with direct reports, free time to review news stories, white papers, technology articles etc. it also reduces time to speak with industry peers, to attend conferences or seminars. All of this leads the manager little option but to continue to rely on the status quo in operations as this is the only environment the manager is comfortable and knowledgeable about.
Conflicting objectives: Often contact centers are asked to deliver multiple objectives simultaneously: improve customer satisfaction and reduce costs, or increase first call resolution, but don’t spend anything on additional training. These examples of conflicted objectives are frequent occurrences in contact centers today. Mission Statements focus on “providing world class customer service”, but the contact center receives no budget to deliver this.
Unclear objectives: Centers are often charged with broad mandates to “deliver excellent customer care” but benchmarks and standards are not defined to allow the contact center to know how success will be measured.
Each of the above three examples leads the contact center management to revert to what they are most comfortable and those things that they can quantify without ambiguity. Further they tend to focus on the short term as there is no clear long term vision or plan. In short this is what they have done before and what they are doing now. This approach is not conducive to looking forward or acting proactively. To the contrary this approach ensures that the management focuses on the past. The end result is bright contact center executives then make dumb decisions.
There are a lot of smart, very smart individuals managing and directing call and contact centers today. Yet, these bright, bright people still manage from time to time to do things that defy understanding. This is my top ten list of really dumb things that smart call and contact center executives do. If you have any dumb things to add to the list let me know by email at ctaylor@thetaylorreachgroup.com .
1- Don’t invest in training or professional development.
We spent enough money to train them when they were hired, why would we want to keep them current on changes in the company our processes our customers or technology. They’ll figure it out. Besides we can always use the dollars allocated to training for other areas like executive retreats.
2- Don’t stay current on new technologies impacting on the call and contact center operations.
After all why would we want home agents, speech recognition, higher quality or better staff morale and management?
3-Don’t read trade press, blogs and newsletters.
We already know everything, and besides who has time to read when I an constantly in meetings.
4-Don’t include remote staff in your operational budget.
There aren’t very many of them out there…is there?
5-Don’t share new technologies and their capabilities with senior management.
They will just say no, so what is the point.
6-Don’t share ideas concepts and results with Marketing.
After all they never share with you.
7-Don’t consider the agents point of view when you examine new technologies.
Its just one extra open window on their desktop…they have done fine with the current 14 so what’s one more window?
8- Don’t give agents authority to make any decisions.
It is important that managers make all decisions…I know it is only a $.49 credit, but it’s the principal of the thing.
9- Don’t take a long term view of your incentive program.
Incentive programs are designed to generate short term results. I just don’t understand that while our incentive to reduce average handle time was so successful our call volume increased substantially.
10- Don’t share with HR the staff and skills/competencies work best in the center.
Turnover is a part of life in a contact center so we shouldn’t try to address it.
Each one of the above list reflects comments (or a paraphrased version) that I have heard from contact center executives. Each of the above points reflects a narrow and/or short term view of the center. Now as I said above these are clever people, so how can such ‘tunnel vision’ exist within a group of specialists? The can be many causes that can create situations of ‘tunnel vision’, these can include:
Lack of time: The old saw that “meetings are a nice alternative to work” rings true in many organizations and contact center are not exempt. Days filled with meetings, limits interaction with direct reports, free time to review news stories, white papers, technology articles etc. it also reduces time to speak with industry peers, to attend conferences or seminars. All of this leads the manager little option but to continue to rely on the status quo in operations as this is the only environment the manager is comfortable and knowledgeable about.
Conflicting objectives: Often contact centers are asked to deliver multiple objectives simultaneously: improve customer satisfaction and reduce costs, or increase first call resolution, but don’t spend anything on additional training. These examples of conflicted objectives are frequent occurrences in contact centers today. Mission Statements focus on “providing world class customer service”, but the contact center receives no budget to deliver this.
Unclear objectives: Centers are often charged with broad mandates to “deliver excellent customer care” but benchmarks and standards are not defined to allow the contact center to know how success will be measured.
Each of the above three examples leads the contact center management to revert to what they are most comfortable and those things that they can quantify without ambiguity. Further they tend to focus on the short term as there is no clear long term vision or plan. In short this is what they have done before and what they are doing now. This approach is not conducive to looking forward or acting proactively. To the contrary this approach ensures that the management focuses on the past. The end result is bright contact center executives then make dumb decisions.
Tuesday, September 4, 2007
Busy Summer
We it has sure been a busy summer...
Lots of consulting projects:
- helped a large not-for-profit: integrate 2 call centers, source a new IP Telephony system and designed and help build an enterprise knowledgebase system,
-helped a publisher assess outsourcing, option, costs and ROI,
-Helped a sports equipment manufacturer measure the satisfaction of their channel partners with the organization
-Opened an Atlanta office http://www.thetaylorreachgroup.com/news.php?item=20070814_075955.txt
In addition we grew Teleffective ( www.teleffectiveinc.com ) our B2B telesales organization with new contracts selling high end projectors ($15,000 units), high end large format printers ($12,000), online directory advertising, online recruitment sales, waste removal services.
TRG has also joined forces with one of the most successful IP telephony resellers, network servi ces companies, based in Buffalo NY, Premcom, www.premcom.com . TRG will assist Premcom in establishing a Toronto office. This move will open up Canada to ShoreTel the number 1 rated IP Telephony system for the 4th year in a row according to Nemertes Reasearch http://www.shoretel.com/resources/industry_research/nemertes_report.html
We'll keep pou posted on future developments
Lots of consulting projects:
- helped a large not-for-profit: integrate 2 call centers, source a new IP Telephony system and designed and help build an enterprise knowledgebase system,
-helped a publisher assess outsourcing, option, costs and ROI,
-Helped a sports equipment manufacturer measure the satisfaction of their channel partners with the organization
-Opened an Atlanta office http://www.thetaylorreachgroup.com/news.php?item=20070814_075955.txt
In addition we grew Teleffective ( www.teleffectiveinc.com ) our B2B telesales organization with new contracts selling high end projectors ($15,000 units), high end large format printers ($12,000), online directory advertising, online recruitment sales, waste removal services.
TRG has also joined forces with one of the most successful IP telephony resellers, network servi ces companies, based in Buffalo NY, Premcom, www.premcom.com . TRG will assist Premcom in establishing a Toronto office. This move will open up Canada to ShoreTel the number 1 rated IP Telephony system for the 4th year in a row according to Nemertes Reasearch http://www.shoretel.com/resources/industry_research/nemertes_report.html
We'll keep pou posted on future developments
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