May 2003

Dato: At Teleperformance USA we provide outsourced contact center services to many of America's leading corporations. More than a mission statement, we have a very clear philosophy ' 'We succeed through our clients' success.' In other words, we recognize that our success is dependent on creating value for our clients. This has been our guiding principle since we set up Teleperformance USA ten years ago, and I think it helps explain why we became one of the biggest players in the industry. 

CIS: What makes your services unique and how can users benefit by using them? 

Dato: We think of ourselves as offering solutions rather than just services. We've made a big investment in developing the processes, the technology and the personnel that are necessary for success in today's market. We're also a very efficient organization. This enables us to provide high-quality, price-competitive services yet still remain profitable. But while all of these factors are critical, I can't claim that they make us unique.

Something that really sets us apart is our ability to offer both U.S.-based and offshore/nearshore solutions. We currently have 30 centers across the U.S. as well as facilities in Argentina, Canada, India, Mexico and the Philippines. All data processing, reporting and quality assurance verification are processed within the U.S. according to ISO 9000-approved standards. Our corporate data center in Salt Lake City is the central hub for our centers, both domestic and offshore. By providing a U.S.-based, centralized infrastructure with full telecom and system connectivity, we can manage facilities around the world as if they were around the corner. 

A second differentiator is that we're a part of the SR.Teleperformance Group. SR.Teleperformance is a public company with $1 billion in revenues. With contact centers in 29 countries, we have a wider global reach than any of our competitors. This makes it possible for our clients to plug into a worldwide contact center outsourcing network. 

CIS: What is your vision of the future of the CRM/contact center/teleservices industry? 

Dato: I think our industry has a bright long-term future. The reasons for this are straightforward. Contact centers are highly efficient. It's no accident that more and more customer communication takes place over distance ' for businesses with large customer bases it's far more cost-effective than conducting business face to face. More specifically, contact center outsourcing offers many businesses a way to enjoy improved service delivery at lower cost. Taken together, these factors explain why our industry has grown so strongly in the past and will continue to grow in the future. 

The nature of what we do will also continue to evolve. As businesses look for ways to make their budgets stretch further, there will be a continued focus on efficiency. I therefore expect greater emphasis on things such as customer self-help solutions and offshore/nearshore outsourcing. Used intelligently, they can deliver comparable service levels at significantly reduced cost. As technology continues to develop, we will also see the development of ever more sophisticated customer management programs. This will require significant investment in technology, processes and personnel. In other words, the cost of operating in our market will continue to rise. Outsourcers who don't have the resources to meet these costs risk being marginalized. 

CIS: What, in your opinion, is the most pressing issue facing our industry today? 

Dato: We're all aware of the challenges linked to the regulatory environment and at the moment this is the big issue. I won't discuss this in detail here, but I think the full impact of the FTC changes won't become clear for a while. Nevertheless, businesses and vendors will have to adapt quickly. Those who react fastest will have the chance to increase market share at the expense of those who don't. 

CIS: What are your recommendations to alleviate such problems? 

Dato: The upheaval caused by the new regulations is part of a much broader trend. Over the years, the speed of change in business seems to have accelerated. More than anyone else, outsourcers face the challenge of adapting their business model quickly. After all, one of the main attractions of outsourcing is its flexibility. So in our industry we have to react and (preferably) anticipate changes very quickly. For this reason, it's very important to think strategically and not become too focused on short-term issues. 

This challenge has to be faced on both sides of the client/vendor relationship. Often there's too much emphasis on a limited set of performance metrics, which can lead to a very short-term perspective. To take the example of a customer service center, the primary focus may be on reducing the cost per customer served. While cost control is important, it's only one half of the equation. It's also essential to consider the impact of different service levels on customer loyalty and customer lifetime revenue. In many cases, a short-term reduction in cost translates into a much larger long-term loss in revenue. So it's very important for businesses to see the big picture and look beyond the short term. 

CIS: What is your vision for future trends in the contact center/CRM/ teleservices outsourcing market regarding profitability and international competition?

Dato: I think the trend towards offshore facilities is very strong and will get stronger. This is very much market-driven. Many large corporations already have in-house facilities that are located offshore and they've seen the benefits this can bring. As a consequence, they will expect their outsourcing partners to offer offshore. Whether we like it or not, this is a challenge that the industry will have to face. 

I think we may also see an increasing tendency for outsourcers to 'buy out' in-house facilities to operate them on the basis of long-term service contracts. This will enable businesses to reduce the capital tied up in non-core functions, and enable outsourcers to secure revenue streams well into the future. 

Both of these trends will require financial resources that may be beyond the reach of some outsourcers. Coupled with the impact of the FTC regulations, in the medium-term I believe that there will be a phase of 'consolidation' in our industry. At Teleperformance USA, we feel well placed to meet this challenge. 

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