October 1998

Planning A European Call Center? Most Companies Look To Britain

BY TONY MATTHEWS, INVEST IN BRITAIN BUREAU

Research on the long march of call center technology last year showed a continuing British lead among major European countries as the continent faced massive growth in its computer telephone integration market. A study of the U.K. and seven other European countries by the Datamonitor consultancy showed a major expansion of the market was imminent. Companies operating from locations with the best technological track record were predicted to benefit.

With far more workstations than any other country, the U.K. was way ahead as a location. The country now has more than 4,000 communication centers, based in many different regions and handling over 25 million telemarketing calls every week. American Express, Delta Air Lines, Intel, and Alamo Rent-a-Car are among many big U.S. firms running pan-European call centers from Britain, serving not just the U.K. but the entire European market.

The past year has seen one American company after another join the rush. Among them was ICT Group, a leading provider of call center teleservices, which opened its first U.K. base in London with a scheduled workforce of 150. Chairman and chief executive John Brennan said: "We needed to expand our presence into a fast growing international market and London met our criteria. We believe its high quality business environment offers us significant prospects and we were attracted by the U.K. capital's outstanding air and transport links; competitively priced and advanced telecommunications and computer technology; and its flexible and highly professional workforce."

Microsoft formed an alliance with two British companies to break into the U.K. call center business, focusing on selling low cost call centers to medium sized businesses unable to afford the technology for single operators to handle customer inquiries. Bill Gates predicted the call center market - already expected to exceed $3.5 billion by the year 2000 - could be even bigger if medium-sized businesses became involved.

QVC, the television shopping channel, expanded its call center near Liverpool, in northwest England, and Colorado-based call center company Market Reach located a second facility in the country's southwest. US software specialist Sykes Enterprises acquired multilingual call centers as part of a $120 million deal when it took over the British software distributor McQueen International and a work force of 1,200 with operations in Europe, Asia and the US.

Eager to break into the lucrative European market, Capital One, the fast-growing credit card issuer, set up a $48 million European operations center at Nottingham in the English midlands with a workforce 900 strong. Nigel Morris, president and chief operating officer, said: "After considering a number of proposals from other sites in the European Union, Nottingham was selected as the preferred location as it has a highly qualified and enthusiastic workforce, an ideal business environment and excellent transport links."

Most of these are "new kids on the block" compared with IBM, whose European HelpCenter at Greenock, Scotland dates back three years, while the company itself has been in business there since l95l. Its 325-seat call center was established when IBM looked at the way it was providing customer support right across Europe. It opted for change and has never looked back.

Paul McNutt, manager of IBM's pan-European HelpCenter, explains why the company chose to locate at Greenock in Scotland:

Throughout Europe, customers expected a technical help line to be answered quickly by an IT expert who could resolve their problems in their native tongues. Examining customer care and cost issues, and determined to meet growing demands, the IBM personal systems group concluded the company needed a single-site help-line operation, staffed 24 hours a day, 365 days a year.

We established a pan-European call center at Greenock which now services customers in 16 countries with staff speaking 11 different languages. The centralized help desk offers common and better quality support, reduces administration costs, and consolidates the valuable information received from customers themselves. Callers in each country telephone a dedicated local number which is instantly rerouted to Greenock without the caller knowing they have made an international call (they are not charged international rates).

Handlers have mother-tongue language skills and even telephone ringing tones match each country of origin: French callers hear a French calling tone, German callers hear a German pulse. Calls from Russia, the Middle East and Africa are accepted if in English or sent as written requests, and the center even deals with calls from North America for inquiries on voice recognition software. Although the center dealt originally with consumer customers, early last year it expanded to also provide multilingual support for its business partners, dealers and corporate customers.

Handling an average 2,000 calls a day, it now supports all products from the personal systems group, answers queries on PCs, Windows operating systems and any other bundled software, and deals with technical questions from business partners on Netfinity Servers, and advanced operating systems such as OS/2 Warp and NT. Support is also provided for the complete range of IBM speech products, which allows customers to dictate directly to their computers.

The HelpCenter has been so successful it was voted best of its kind by a newspaper in Switzerland.

Bringing support together means that IBM now has the ability not only to quickly inform manufacturing and development of potential hardware and software issues identified in products at an early stage but also, via a database, to share this information with other call center agents. The quicker information is gathered and centralized, the less time it takes to repair, modify or reconfigure hardware.

Not that Britain stood alone when IBM was considering where to locate the HelpCenter. Despite having been based in Scotland for more than 40 years, we looked at many other European countries in attempting to match our criteria for a pan-European call center. We had to decide whether to set up on a new stand-alone site or incorporate the center into an existing facility, but there was more to it than that.

The right location had to be at the leading edge of telecommunications and deliver both competency and reliability. This meant selecting a country that invested in and converted to digital exchanges. It was also vital that the location could offer a genuine choice of competitively priced telecoms carriers, offering excellent local back-up. Operational costs had to be competitive, of course, too.

Recruiting, training and retaining affordable, high caliber, multilingual graduates was essential. Ideally IBM was seeking a ready supply of candidates with language proficiency and a technical aptitude, combined with some formal qualifications. As well as accommodating 325 people in a modern environment, the chosen site would also have to provide ample car parking space, a staff restaurant and social amenities. It had to be centrally located and have a transport infrastructure that could provide ease of travel to support a 24-hour, 365-day operation. Finally, since the average call center employee is aged between 23 and 30, the location had to be close to a vibrant city; offer an excellent choice of affordable housing, and provide a safe environment for young families.

The Netherlands and the Irish Republic have both attracted many call centers, Amsterdam in particular benefiting from a largely multilingual population. However, after full consideration, IBM opted for the U.K. and Greenock, which is near Glasgow in Scotland. It met all the criteria, especially the two main areas of concern: excellent and affordable telecoms, and the ready availability of graduates with European language skills. Britain has low-cost, digitally-presented telephone lines and many telecoms providers. Its competitive environment has brought significant cost benefits, making it one of Europe's cheapest countries for most telecommunications services.

Scotland alone produces over 650 language graduates every year, while a further 3000 students study European languages at the degree or post-graduate level in conjunction with a business-related subject. For IBM, language fluency and IT skills are the crucial mixture. Recognizing that many job applicants had first-class linguistic skills, but only moderate IT knowledge, the company worked closely with the nearby University of Paisley which, as a result, now offers Europe's first post-graduate diploma Masters in European information technology support. Specifically targeted at graduates fluent in a major European language and wishing to pursue a career in the computer support industry, this has a replica facility of the IBM call center as a major feature of the course.

An excellent wider education system has also attracted large numbers of other European students to universities nearby, many of whom choose to stay in Britain following graduation, further increasing the quality and size of the available labor pool. Around half of IBM's bilingual staff are from among Scotland's 170,000 foreign nationals who come to Britain to study, or natives with the relevant language abilities, with the remaining half recruited from abroad.

All of IBM's recruitment expectations have been fulfilled. The U.K. is clearly a great business location with competitive wages and operating costs, together with one of the lowest corporate tax levels in the European Union, making it especially attractive. The future is very promising and the company is looking forward to further expansion.

Paul McNutt is the manager of IBM's pan-European HelpCenter in Greenock. Managed by McNutt for over three years now, the HelpCenter has grown to over 300 agents providing multilingual telephone support for all of Western Europe, together with voice and electronic support to 64 countries worldwide.

Tony Matthews is assistant director of information, Invest in Britain Bureau. The Invest In Britain Bureau is the only organization representing the whole of the United Kingdom as the premier location for investment in Europe. It has responsibility for England, Scotland, Wales and Northern Ireland.