There have been a number of high-profile cases of companies deciding that they need to improve the flexibility of their operations by taking business functions which had previously been outsourced back in-house. Sainsburys and Prudential both made moves in this direction last year. Do you think the trend will accelerate this year?
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I think the cases you quote are noteworthy rather than significant. The pullback in house is very much single digit, a small percentage of the total. But I doubt the trend will pick up.
So do you think the market is stable?
Relatively stable. The use of third parties to deliver services is probably a better way of looking at it.
Some local authorities have taken a significant part of council front-line activities and parcelled them out along with their IT and communications functions. And it has not always worked. Bedfordshire threatened to take its supplier HBS to court because it said it had failed to meet performance targets. Do you think similar marriages will end up in the divorce courts?
You are invariably going to get disagreements or a lack of satisfaction on the part of the buyer of services if there is not a meeting of minds. That is often the case, unfortunately. Sometimes fingers are pointed at the service provider but often when you look into the situations in detail the basic problem is a lack of clarity in the way the deal was specified.
It is also a lack of ability to manage the deal effectively on the part of the recipient that contributes towards a number of the disputes. In industries like financial services there is less chance of that misunderstanding because there is greater maturity in the number and complexity of the deals they have managed.
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Lots of call centres have gone off-shore in the last few years, now some are coming back. Will more do so?
There is certainly a coolness in the public about dealing with people from another country. The associate the accent with a lack of service. Unless the individual on the end of the line is absolutely up to speed on all of the issues the person is dialling in to sort out then the person calling is not going to be satisfied. Some people do not have any problems dealing with people in another country, if they can fix their problem while others will not be happy.
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Is it a training issue? Do firms need to make greater efforts to make sure staff abroad are properly motivated and stay with the organisation so there is not a constant churn of personnel?
The attrition rates in call centres have always been very high and overseas, particularly in India, it can be up to 100 per cent turnover per year. With technical help desks more often than not a caller is asking for help with a specific problem. If the person answering has the ability to fix the problem then customers do not really care if they are sitting on the moon.
It is different when people get calls into their home in the evening when the person on the line is trying to sell something. For that type of work to go overseas is a challenge. A foreign accent and lack of understanding of the cultural icons can be disastrous for a firm’s image.
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Call centres have been characterised as the dark, satanic mills of our age. Stressful work environments that are not well rewarded and where people are micro-managed in ways the overseer in any 19th Century sweatshop would recognise. Do you think they will die out as Voice over the Internet (VoIP) technology makes it possible to build virtual networks of better-trained personnel who can answer calls while much more widely distributed?
The events that really annoy people are the ones where they have a specific problem and the person on the other end needs a level of understanding to solve the problem. Staff answering these sorts of call need to be highly trained, they need to be local and understand all of the issues.
So we may see a combination of improved technology, less emphasis on menu-driven call centres and more ability to speak to an individual who is much better trained. It is ultimately an issue of cost. The well-trained people cost more and employers need to be prepared to spend the money if they are to reap the rewards in terms of improved productivity.