Let support off the chain

Uptime was just one of many challenges facing Phill Edwards as he worked to keep salary packaging specialist SmartSalary's 70-strong contact centre on top of rapidly growing customer demand. Although the company embraced voice over internet protocol (VoIP) five years ago, its contact centre software was inelegant and prone to error. Yet with only six people in his IT organisation looking after about 180 employees, and any major software upgrade requiring the addition of several more, the chief information officer embraced a somewhat radical strategy for SmartSalary's contact centre.

He got rid of it.

Not the people, mind you. Just the technology. Considering his options led Edwards to application hosting specialist Global Speech Networks (GSN), which set up the Genesys contact centre platform on SmartSalary's behalf. But rather than running the platform in-house, SmartSalary has allowed GSN to maintain the whole thing at its data centres while retaining its critical customer-support team.

"We needed something that was more robust and stable," Edwards says. "It was time to move onto the next step, but we didn't want to have to bring in expert Genesys skills and didn't have the ability to manage them, anyway. It seemed like a good option for us to have [the platform] hosted somewhere else, letting them focus on the technical skills, and allowing us to focus on running our business."

Because SmartSalary didn't have to add technical infrastructure in-house, embracing the hosted solution was straightforward. Its earlier investment in VoIP meant calls could be routed seamlessly between GSN's data centres and SmartSalary's customer service representatives who manage a steady flow of phone calls, email enquiries, faxes and paper documents. Agents access the contact centre interface through a web browser, and

SmartSalary only installed a few configuration tools at its end.

Some 18 months later, the hosted solution has not only given SmartSalary access to a high-end contact centre platform and features such as skills-based routing, but has dramatically improved the availability of SmartSalary's contact centre. "Maybe I have low expectations," Edwards says. "However, we had a month recently where we had no problems at all. Previously, we had some problems about uptime, but our uptime has been fantastic since we've moved over. We let [GSN] focus on the technical skills and we focus on running the business."

Hold on to the team

Outsourcing contact centres is hardly new, but most models involve relying on third-party customer-support representatives (CSRs) who come as part of the package. SmartSalary's approach, on the other hand, allowed it to access cutting-edge contact centre technology while holding onto its sizeable and experienced team of CSRs, improving management by keeping them and their highly specialised skills close to the coalface.

It's a hybrid strategy that would have been difficult to execute in the past, since support representatives have traditionally been collocated with contact centre technology.

Breaking this interdependency, however, is easy when a company has invested in VoIP, allowing phone calls - and related customer information - to be routed in and out using standard data protocols. SmartSalary easily redirected its CSRs from its groaning in-house platform, terminating their VoIP phones with hosted systems providing high-end contact centre functionality such as call queuing, skills-based routing and load balancing.

Such flexibility is increasingly important as organisations look to new technologies to help them manage their growing customer bases without having to cut staff. Switching to an internet protocol-based environment is a major enabler for this, as it breaks down the boundaries between voice and data processes.

But the transition to IP has been slow in many companies. In a 2006 survey of 714 contact centre decision-makers, Forrester Research found that only 8 per cent had implemented IP contact centres. Another 9 per cent were in the process of deploying the technology and 21 per cent were evaluating or piloting it. For those not considering IP, reasons cited included reliability, manageability and scalability.

A follow-up survey, conducted this year, found that 19 per cent had implemented IP contact centres, 14 per cent were rolling them out, 28 per cent were evaluating or piloting and 39 per cent had no plans or didn't know their status. Those with no plans cited reasons of, again, reliability, manageability and scalability.

A step up for the SMB

Sensing an opportunity, a number of hosting providers - who have worked their way up the business value chain after hosting websites, email servers and on-demand applications - are working to fill the gap, helping those companies that have finally made the transition to jump straight into a full-featured IP-based contact centre.

It's a major step up for most hosting providers, whose experience in hosting applications has generally been limited to more transaction-based, asynchronous productivity applications. By contrast, today's contact centres are complex operations that interweave telecommunications and data environments to provide real-time access to information.

The quality of the mix is directly related to customer satisfaction - which is why the right hosted offerings seem to have a ready-made audience among small to medium-sized businesses. Hosted contact centre offerings allow SMBs to quickly improve service, avoiding the need for staff retraining while accessing high-end technology that they would struggle to obtain on their own.

For example, a customer of hosted contact centre newcomer PipeVines had been quoted $600,000 to $800,000 to replace its 100-person contact centre. A hosted capability - delivered through PipeVines and offering similar functionality - is costing about $6000 a month. That's a simple business case justification for any SMB, virtually eliminating capital costs and allowing expenses to be pegged against operating revenues.

PipeVines' hosted contact centre service proved invaluable last year as the Queensland Public Sector Union (QPSU) ramped up its campaign against the then Howard government's workplace policies in the lead-up to the last federal election. QPSU normally maintains a contact centre with 15 seats, but it needed to increase this to 75 seats to handle the more than 40,000 people its campaign had targeted within eight Queensland electorates.

Facing quotes of about $150,000 for the technology to expand the contact centre, the union embraced PipeVines instead. The additional 60 staff worked from notebook computers, using headsets and VoIP "softphone" applications to make outbound calls. Throughout the three-month campaign, the hosted contact centre managed the list of targets, saving staffers countless hours of paperwork and manual data entry.

"The phone calls cost us next to nothing and headset expenditure was quite small," Kate Flanders, lead organiser with the QPSU, says. "Because the contact centre was hosted, the scripting and reporting were consistent across the operation. We could download reports on call results at the end of each shift, easily tell how many people we had left to contact in each seat and change our message if we needed.

"In the end, we won all the seats we targeted in Queensland and the swing against the Howard government in those seats was as high as 14.4 per cent, compared with the 5.8 per cent average. Without the ability to call into all of them, it wouldn't have happened."

Target new interactions

The price and speed may be right, but many companies are starting to look into hosted contact centre providers due to their ability to provide fast access to new technology that strengthens their customer outreach capability. Options vary by company, but the Web 2.0 revolution gives important clues as to what organisations should be thinking about.

Where contact centres used to be primarily about phone contact, they now integrate Web 2.0-style communication, including voice, video, email, instant messaging, in-transaction web chat and even the use of artificially intelligent computerised "agents" that answer customer queries and guide them through purchases or other transactions.

Transferred onto a company's IP infrastructure, this technology falls under the banner of unified communications (UC), a nebulous but increasingly prominent concept that combines all forms of communication into a single converged network. Cisco Systems, Genesys, Alcatel-Lucent and other telecom vendors have been jumping over themselves to simplify access to UC's component technologies, working alone or with partners to combine strengths in data networking, voice networking and contact centres.

UC has already delivered savings in in-house communication between employees, but pointing the technology outward is starting to deliver what some call "customer service 2.0". This technology-driven interaction offers new opportunities that Darren Leffler, contact centre product and solutions marketing manager for Nortel Australia, sees as a mandate for organisational change.

"There's a mismatch between what Gen Y people are doing socially and what organisations offer them virtually," he says. "Assuming customers will come using their telephones just won't happen any more. It's all about who customers will be in the future, how they'll behave and how they'll want to interact with organisations trying to capture them. Technology [coupled with] consumer expectation means organisations have to change what they do and build contact centres that are a bit different from what we've done traditionally."

It's little wonder that many organisations are jumping on the hosted bandwagon. Just as companies have warmed to hosted email, a hosted UC service is a relatively painless way of accessing new technology. The same concepts apply in the contact centre, where convergence has become as important to viability as electricity.

The figures of speech

However, not all companies are using hosted contact centre providers to offload their entire infrastructure. Hosting providers can be equally useful in helping small businesses introduce isolated new technology that complements rather than replaces their contact centres.

Speech recognition - which gained currency several years ago with the maturation of natural language speech recognition (NLSR) technology - has become a popular area for hosted providers, both in providing speech-recognition services and facilitating access to new speech-based services such as voiceprint authentication for confirming the identity of incoming callers.

SmartSpeak has built its business on hosting speech applications from providers including Nuance and VoiceGenie, with VoiceXML support allowing customers to deliver voice-based services in much the same way as if they were running their own systems.

The benefits of speech in a contact centre are well accepted. For example, Centrelink has had a return on investment in less than nine months after implementing a Nuance NLSR solution that is now handling more than 30 per cent of callers to the agency's Report Employment Income line - well above the 2.5 per cent prediction built into the initial business case. Customer satisfaction with NLSR is very high; surveys show 97 per cent of Centrelink customers prefer the speech service for their regular reporting.

Speech-based applications may work well, but they need significant niche expertise to implement properly. That can be a stopper for organisations without the technical or financial resources - which is unfortunate given that the technology can provide dramatic operational benefits.

Mobile phone operator Virgin Mobile recently embraced a RightNow Technologies' hosted customer relationship management system to manage data on its 600,000-plus customers.

The RightNow buy, however, is just the latest in a series of moves to outsource critical new customer technologies. Facing a Christmas-season spike in demand for activating prepaid phones, Virgin Mobile contracted GSN to deliver its hosted speech platform to replace Virgin's outdated interactive voice response (IVR) system.

Because the system was hosted, it was relatively easy to integrate into Virgin Mobile's operations. Providing a new way of automating incoming activation calls saved Virgin Mobile the equivalent of nearly 40 full-time employees, while more of its CSRs were able to enjoy holidays and service delivery costs were significantly cut.

"A business size will always have restraints on scalability and capability that we can't address ourselves except with a lot of investment and time," the director of customer service with Virgin Mobile, Robert Tihanyi, says.

"There's so much we're trying to do, with limited resources, that it becomes a prioritisation game. That means we know we can't get quick wins out of what seems like a fairly simple project that might require complex technology underneath. Putting this on a hosted platform has been a roaring success."

So successful, in fact, that Tihanyi expects to extend the speech solution to other IVR-enabled customer support services over time and is considering the hosted model for a coming upgrade to Virgin Mobile's contact centre system.

Drivers of technology

Contact centre investment continues to grow. Forrester Research has found that 21 per cent of surveyed enterprises were planning to increase the number of centres they operate this year.

Considerable demand is from companies exploring new technology for the first time. Questions on computer telephony interface (CTI) technology, a relatively entry-level contact centre technology, accounted for 11 per cent of inquiries to Forrester, suggesting a lot of interest in technology, but a lack of knowledge about how to implement it.

Cost reductions are a further driving force. In another Forrester survey, 22 per cent of respondents said they planned to reduce the number of contact centres they directly operated in 2008. More telling was the strong interest in speech self-service applications, being targeted by 47 per cent of respondents.

With interest in contact centre improvements continuing, the hosted model is likely to become more popular - as a substitute for an in-house centre, a means for accessing beneficial new technology, or as a way of quickly adding capacity to deal with demand surges.

In turn, hosted contact centre providers are strengthening their value propositions as they rush to convince customers to try hosted solutions. Analyst firm Frost & Sullivan estimates the market for hosted contact centres in North America alone will have grown from $US191.1 million in 2006 to $US1.2 billion by 2012, a 35 per cent annual growth rate, reflecting increasing demand for more efficient customer services.

These figures suggest the biggest growth area for contact centres may not be the huge, complex, monolithic systems of days past, but the far less formal delivery of lower volume, often casual services to all kinds of businesses. But whatever the reason, early signs are clear: outsourcing contact centre technology is gaining currency as a way of having it all - without paying for it all.