Introduction
If you belong to the majority of UK all centre operations preparing for expansion within the next twelve months, then you will probably already be considering whether it makes commercial sense to move some or all of your call centre operation offshore. Many established call centre operations are finding it hard to recruit high calibre employees from their local catchment area. Today's technology affords an option to extend the call centre by adding remote agents based in new locations within the UK at a relatively low cost, but beyond that, it also extends the same opportunity much further afield – to the new call centre locations in India, South Africa, China and Eastern Europe.

For many organisations the cost benefits of offshore outsourcing are too obvious to ignore. As many as five UK businesses each week are moving at least part of their call centre or back office work offshore. This accelerating trend is driven by a number of unavoidable economic factors. However, it remains to be seen whether outsourcing is a short-term fix to reduce costs in a difficult economic climate. In fact a growing number of UK call centres are turning their back on outsourcing and pledging to retain UK call centre staff.

The outsourcing trend is still relatively new, so apart from a growing body of anecdotal information suggesting a customer backlash, organisations do not yet have access to reliable data regarding the long-term success of offshore outsourcing. Will organisations be making cost savings at the cost of customer loyalty? This paper looks at the undoubted cost benefits in the wider context of quality of service provision to help organisations develop their offshore call centre strategy.

Location
India is the leading offshore call centre location to date. With salaries for entry-level call centre staff around 80% lower than European rates, it is easy to see the attraction. Not only that, but a call centre job in India has a similar status to that of a professional position in the UK, so employers can choose from a pool of 2 million highly-motivated graduates entering the Indian job market each year. To further reassure UK companies, Indian call centres have demonstrated a clear commitment to recognised quality standards, such as ISO9001.

Beyond India, South Africa has a large and relatively mature domestic contact centre market and is already a strong contender in the global outsourced call centre market. In the future, China, as well as Eastern Europe is being cited as potential locations for offshore call centres.

Each location will have advantages and disadvantages. For example, power outages of around 10-15% are the norm in India and the political climate can be highly volatile. The important thing is to be aware of local factors such as these before committing to an offshore call centre project. As a quick checklist, you should consider the following factors before making the decision to activate your offshore call centre project: language, infrastructure, telecoms, political and business climate and investment challenges.

It is important to remember also, that the offshore call centre markets have not yet reached maturity. A growing body of anecdotal evidence suggests that salaries in Indian call centres are rising fast and agent turnover is increasing rapidly. These early signs suggest that the Indian market could soon be facing the same recruitment issues that have affected the UK call centre industry.

For this reason, if possible, UK companies should explore an increasingly wide range of technology options that maintain a high degree of flexibility for their offshore call centre deployment, allowing them to change location with ease, if required by a rapidly changing global economy.

Culture
Before moving forward with an offshore call centre project, organisations will obviously need to protect their investment by gaining a thorough understanding of the culture in offshore locations. For example, call centre staff can be reluctant to work overtime in India, not because they are lazy, but because their communal culture and the scarcity of well-paid employment means they would prefer to offer a job to another person!

Other cultural factors may add to the cost of running an offshore call centre. For example, Indian recruits tend to speak a more formal style of English than their UK counterparts and can find regional English accents and dialects hard to understand. Both factors can have a major impact upon the length and quality of customer calls and therefore the efficiency of your offshore operation. It is therefore important to budget for training and quality management programmes to address these issues and ensure service level targets are met consistently.

Data Security
It is worth noting that offshore call centres are still required to comply with their UK data protection obligations. Concerns have been expressed about data security in offshore locations. For example cases of Indian call centre workers being bribed to provide financial data have been reported. However, this risk can be significantly reduced if the data is hosted on servers within the EU, with a thin client view to the offshore call centre staff.

Cost Benefits Versus Quality
In spite of the media hype around offshore outsourcing, it is worth noting that very few organisations are moving their entire call centre operation offshore. While this may change in the future, there is a growing recognition that businesses need to protect their investment in customer-facing processes. Some industry analysts, such as Ovum Holway have predicted that, while back office functions will continue to be located offshore, businesses will increasingly opt to keep the customer-facing elements of their call centre in-house.

In the long-term, the viability of offshore call centres remains to be proven. The challenge for organisations will be to optimise the efficiency of their offshore call centres and to measure the value they add to the customer service function. Will the undoubted savings in operational costs add value to your organisation in the long-term? Key to this will be establishing effective business processes in the contact centre. Offshore call centres will not provide a quick fix for ineffective customer service processes at home. To illustrate this point, recent research from call centre consultants ContactBabel found that UK call centres answer 25% more calls than Indian agents and resolve 17% more of the calls first time.

To maintain quality standards, offshore call centres will need to build on established UK business practices that have been proven to deliver customer value. When considering an offshore outsourcing strategy, it is important to look at what types of calls you will transfer to your offshore call centre. Ideally this process should include a thorough review of business processes in your UK operation. Can you measure the costs of different types of call? Are you able to identify which calls are adding value to the organisation, either by increasing customer satisfaction, or generating profitable sales? Is there room to reduce UK operational costs by optimising the technology and processes in the UK call centre?

When this process is complete, your organisation may decide that significant cost savings can be achieved by outsourcing low value but essential calls, while freeing your UK agents to focus on high-value components, such as outbound campaigns and up-selling, in the UK. The next step is to define a realistic and effective process for handling outsourced calls.

Pilot Schemes
Even today, few companies have outsourced more than a proportion of their call centre operations to India. The trend may be gaining momentum, but the vast majority of offshore deployments are pilot schemes. Given the significant investment most companies have made in the quality of service provided by their UK call centre, it makes sense to dip a toe in the water, before deciding whether an offshore call centre is right for your organisation.

At Rockwell FirstPoint Contact we have helped a number of customers to set up a small scale proof of concept exercise in India, by adding remote agents to their UK call centre operation. The beauty of this approach is that it requires minimal investment and at the same time allows organisations to maintain management control of the offshore pilot from the UK, with real-time and historical reporting facilities available in both locations around-the-clock. In this way any quality of service issues can be clearly identified and addressed at an early stage, to reduce the risk of a customer backlash.

It can be a good idea to run a pilot scheme in partnership with a local outsourced provider. This allows organisations to benefit from their partner's local knowledge to handle recruitment and infrastructure requirements. There is room for considerable flexibility within this approach. For example, a customer of Rockwell FirstPoint Contact's has worked with an outsourced provider in an offshore location while still retaining the call centre desktop used by UK agents. The call centre intelligence remains in the UK headquarters, while the outsourced agents take calls alongside their UK colleagues. The pilot has been successful and customer satisfaction levels remain high.

Business Model
There are two distinct business models for offshore outsourcing; to set up a new call centre from scratch or to work with an outsourcing partner. Both options offer cost benefits.
For example, it has been claimed that a 50-seat standalone call centre operation is likely to recoup the full cost of the move to India within just three months. It has also been demonstrated that operating costs in India can be as much as 40% lower than the UK in an outsourced environment and 70% lower for self-managed operations.

When considering setting up a call centre from scratch, it is important to remember that the Management resources required to set up a call centre from scratch, could put a strain on existing call centre resources, as well as the quality of customer service achieved. No business wants to make operational savings at the cost of customer loyalty.

As we have seen, many companies are realising the benefits of using an outsourced company, where issues such as recruitment, team management and quality standards are taken care of within the Service Level Agreement (SLA). Obviously it is important to choose a company where there is a strong cultural fit and to negotiate a realistic SLA. Organisations also need to be prepared to invest the management time required to build a strong relationship with an outsourced provider.

Whichever option is selected, Rockwell FirstPoint Contact recommends that organisations consider whether it is more viable to run the offshore contact centre as an extension of the UK operation, by using remote agent technology. For organisations that decide to create their own offshore call centre, this option considerably reduces the technology investment, sincere there is no need for expensive hardware switching technology. For businesses that take the outsourcing route, remote agent technology can provide offshore agents with the same desktop resources as their UK counterparts. There are other benefits too, which will be explored in the next section of this paper, when we go on to look at the technology environment.

Technology Environment
As this paper has already hinted, whatever the choice of business model, the technology environment will be a crucial consideration within an organisation's outsourcing strategy. In this section we will explore the technology options available.

Setting Up An Offshore Call Centre From Scratch
For organisations setting up a new call centre operation from scratch, it is important to balance the 80% savings in staff salaries against the cost of installing high-quality international telecoms links, IT, communications and power systems. However, organisations can make significant savings on set-up costs by leveraging their investment in the existing call centre switching platform, so that call intelligence and routing decisions remain in the UK centre.

Using this model, calls are presented to the UK contact centre and then routed across the network to the offshore contact centre using remote agent technology. All that is required to introduce remote agent desktops is a PC to run the software (Rockwell Convergence), a telephone and network connection. Offshore agents can sign onto the system via a LAN, WAN or dial-up networking connection. The switching platform will automatically route calls to offshore agents as defined by routing rules and parameters.

Organisations with a network infrastructure in place may also be looking to achieve further savings by converging voice and data networks using VoIP technology. In this case, the VoiP Branch Office application is an attractive option. It allows companies to manage customer contacts in remote configurations across an existing network infrastructure using a Cisco IP gateway. This option can produce significant savings in operational costs by running a single voice and data infrastructure.

Using An Offshore Outsourcing Partner
As we have seen, some organisations will decide to outsource a proportion of their call centre operation. Companies that take this option will need to consider the technology infrastructure when selecting their offshore outsourcing partner. Obviously it makes sense to choose a partner with a similar technology environment to the organisation's own operation in order to achieve consistency of business processes. However it is not always possible to find an exact match, given the range of factors involved in selecting an outsourced partner. If this is the case, Rockwell's Convergence can offer a solution.

This application, from Rockwell FirstPoint Contact, is compatible with multiple switching platforms so it is ideal if the outsourcing environment already has a PBX installation. It allows offshore agents to benefit from the same desktop resources as UK agents, while supervisors can monitor the performance of agents in either location, in real-time, without leaving their desk. It also gives companies the option to reap the benefits of working with an outsourced partner, while maintaining full centralised control of the offshore call centre from their UK headquarters, by running an inter-continental virtual call centre operation. Another benefit of this approach is that the outsourced agents can act as an overflow for UK operations to help respond to peaks in call volumes.

As we saw earlier, a small percentage of UK companies have taken the decision to outsource their entire call centre operation. In these cases ownership of the call centre and the technology environment is relinquished to the offshore outsourcing provider. Whether this is a long-term trend remains to be seen. For customers who want to take this option, our advice is to run a small-scale pilot scheme to test the water, using one of the technology options described earlier in this section.

Pioneering new technologies such as browser-based applications Web Powered Agent will create new possibilities for offshore outsourcing. Agents will need only a phone and Internet connection to sign onto the call centre, from any location in the world. Web Powered Agent displays multiple windows to display the desktop applications, such as a softphone panel, screen pop and scripting. This route is particularly attractive since it removes the traditional entry level cost barrier and is easy to re-size for screen pops by leveraging the built-in HTML capabilities without costly integration.

Whatever the scenario, our advice is to replicate the call centre technology environment of the UK operation as far as possible, to achieve continuity, consistency and management control. By utilising remote agent technology, organisations can benefit from rapid deployment of offshore agents, without any investment in remote call centre hardware, or in the case of Web-Powered Agent, software. In addition, this approach supports flexible redeployment if circumstances change. Perhaps even more importantly, the remote agent option allows you to operate a mixed UK/offshore call centre environment, keeping vital management and control capabilities fully intact.

Quality Management
As we have already seen, effective quality management will be absolutely critical to the success of your offshore call centre operation. Cultural differences are key here. While your offshore call centre may meet productivity targets, you need to be assured of the quality of calls. Can your offshore agents demonstrate the same understanding of your customers' needs as their UK counterparts? A call recording application should be considered as an essential component of an offshore call centre to help you understand these issues.

The call centre environment should also be considered. Can you provide offshore agents with the same resources that benefit their UK counterparts? How long will it take to train offshore agents to the minimum standard you require? These questions need careful consideration from the outset.

We strongly recommend that organisations consider appropriate success criteria. In addition to number of calls, these may include length of calls (which can increase considerably due to language factors) and value of calls, to ensure an effective evaluation of the offshore operation.

In addition, it would be wise to put processes in place to evaluate the impact of the offshore call centre on customer behaviour. For example, some companies will regularly call back customers to find out if they were satisfied with the service they received from their offshore operation, feeding the results back, to ensure continuous improvements in quality of service.

Finally, it is important to ensure that management resources are available in the UK to carry out this activity. And to plan for the inevitable business trips this will entail for management staff.

Training
The relatively high status awarded to call centre employees in the new offshore locations means that, in general, agents are naturally very motivated and loyal. However, as we have already hinted training is essential to focus on cultural issues, so offshore agents can demonstrate empathy with UK customers.

One solution is to adapt E-learning. This option is already more extensively used in India with 77% of outsourcers stating that they have deployed an e-learning solution, compared with 23% of UK call centre operations. Your technology vendor may be able to help you develop your own training programme, tailored to the needs of your business. For example, Rockwell FirstPoint Contact offers customers an online Knowledge Centre, which can be an extremely valuable long-distance training resource.

Communication
Last, but by no means least, it is important to consider both an internal and external communications strategy for your offshore call centre operation. Union activity and media attention has focused on the threat to UK jobs posed by offshore call centres. To avoid the inevitable negative publicity, it is important to communicate your offshore call centre strategy to internal employees from the outset. If handled well, your UK employees may even welcome the offshore call centre project. For example, in October 2003, unions representing workers at Lloyds TSB welcomed the bank's decision to establish operations offshore believing it would fuel growth in the UK. Many organisations are stressing that the operational savings achieved via the offshore operation will allow further investment in high-value customer services based in the UK.

Be prepared for media attention. If you do not respond to media enquiries, journalists will believe you have something to hide and will pursue the story without representing your point of view. It is vital to ensure that your corporate communications function has a well thought-out strategy so that you can present the commercial justification of your offshore function, together with the benefits for both employers and customers.

About Sean Keane:
Sean Keane is Account Director for Rockwell FirstPoint Contact.

About Rockwell FirstPoint Contact:
Rockwell FirstPoint Contact, a business of Rockwell Automation, is a global provider of complete customer contact solutions that support multiple channels (voice, e-mail web, wireless and VoIP) through a unique open interaction infrastructure. The first to develop technology to help automate customer call centres, Rockwell FirstPoint Contact has a 30-year global reputation for reliability, dependability, on-time, on-budget delivery and superior customer service. Where intelligent customer contact begins, Rockwell FirstPoint Contact specialises in helping organisations leverage data from across the enterprise to achieve their customer relationship management strategies.