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Technology Highlights

September 2001

The Swedish Call Center Outlook

BY ERIK LOUNSBURY, EDITORIAL DIRECTOR, CUSTOMER INTER@CTION SOLUTIONS

Go Right To: [ InSite On Bavaria ]


Having two great-grandparents who emigrated from Sweden at the end of the nineteenth century (thus I am Erik with the letter k), when the invitation to come and investigate Sweden as a hotspot for contact centers came, having never seen the land of one quarter of my forebears, I felt impelled to go.

Flying into Arlanda Airport outside of Stockholm, one notices a landscape shaped by ice and water; the sea gives way to flat lands as lakes and bogs, fields and trees stretch out below (signs of Sweden's sea-faring tradition, I saw several cargo ships plying the waters of the Baltic, something I had never seen before in many transoceanic flights). From the Arlanda terminal, Kevin Mayer, editorial director of our sister publication, Communication Solutions, and I took the long escalator ride far down into the earth to catch the express train into downtown Stockholm, where we would join a group of fellow journalists to explore the world of call center opportunities in the land of the mobile phone with the guidance of the Invest in Sweden Agency (ISA). Walking out onto the streets of Stockholm I felt at home as Swedes greeted each other with, "Hej, hej," which is pronounced the same as the familiar greeting I grew up with down South: "Hey."

Kai Hammerich, director-general of the ISA, gave an overview of the international flavor of the Swedish economy and foreign investment in Sweden. Ten countries, led by the U.K., Finland, the U.S. and Germany, make up over 80 percent of international inward investment in Sweden, and Sweden ranked fourth internationally behind the U.S., Belgium and the U.K. in 1999 in international inward development. Sweden's economic growth rate was four percent in 2000, it has an unemployment rate of four percent and available capital in Sweden has increased as investors have had a closer look at the market, cost structure and competencies Sweden offers, as well as business costs that are lower than Germany, the U.S., Belgium, the U.K., France and the Netherlands. At present, there are around 4,500 foreign-owned companies in Sweden. The Baltic countries, Nordic states and the U.K. are Sweden's largest trading partners.

Investments are becoming more focused on competencies, and prominent business clusters offered in Sweden include IT and telecom (IDC ranked Sweden number one in IT infrastructure and users). According to Mr. Hammerich, Sweden is in a good position for growth for the future because of: 1) internationalization (Sweden went international after World War II because of a small home market -- a generation ahead of the rest of Europe); 2) it traditionally has had a technology-minded people; and 3) it has decentralized, flat governmental organization that can act quickly.

Lars Reinius, head of the ISA's call center project, detailed Sweden's call center scene. The ISA began its call center initiative in 1997 and has participated in 50 establishments representing 3,000 seats since that time. The ISA points to a regional approach as being most sensible to cover Europe, with Sweden being the logical choice for Scandinavia. Mr. Reinius pointed out that Scandinavia and the Baltic Sea region is the fastest growing in Europe, with 25 million consumers in the Scandinavian market and 85 million consumers in the Baltic Sea region, and the GDP is in the same range as that of the U.K.

In 2000, the number of call centers serving this region from Sweden was 1,100 (growing by 150 annually) that employed 45,000 workers, with 12,000 new employees being added every year, and the ISA is predicting an annual growth rate of 19 percent from 2001 to 2004. All told, one percent of Swedes work in call centers. In the outsourcing sector as of June of this year, there were 9,600 seats in 142 outsourcing companies (growing at 35 percent annually), with the median size of the outsourcing companies standing at 22 seats. The majority of these companies concentrate on providing high-value-added, business-to-business services for the financial, telecom and IT help desk sectors, with 77 percent of their work being conducted in more than one language and 62 percent of it using English. In closing, Mr. Reinius left us with the message: "Go regional."

The Regional Approach Of The ECCA
Mark Smedley, the U.S. manager of the European Call Center Alliance (ECCA), echoed the "go regional" theme. (The ECCA is a consortium of five different inward investment agencies located in Sweden [ISA], the U.K. [Manchester Investment and Development Agency Service], Germany [the Saarland Economic Promotion Corporation], France [The Moselle Economic Development Agency], and Spain [Ajuntament de Barcelona]). As there are 15 languages and multiple regulatory environments, the ECCA provides local contacts on a Europe-wide basis. Mr. Smedley described how thinking on providing call center coverage in Europe has evolved from one of a national model to a pan-European model to a regional markets model. According to Mr. Smedley, a country model means more labor, more back offices, multiple vendors and a subsequent underutilization of technology. A pan-European model of coverage means less facilities and staff, but drawbacks include lack of language skills, high turnover, high telecom cost for distant places and severe problems if a single site is down; the last is overcome with a regional approach, which allows calls to be routed over a network. Companies that have embraced a regional approach to Europe include Hewlett-Packard and Microsoft, and outsourcing agencies including Sykes, Stream, Convergys and Teleperformance.

Mid Sweden University
Educating the future contact center professionals of Sweden is a role Mid Sweden University has taken on. Hans Tegebeck, senior adviser, HUB Sweden, ISA and Dr. Christer Strandberg, a professor at Mid Sweden University, explained the contact center educational training that has been in place at Mid Sweden University since 1999. The university is working in cooperation with Dr. Jon Anton at Purdue University as well as with other universities and various companies to provide a thorough curriculum. The 40-week advanced study program in CRM stresses that the focus of all business activities should be the customer through studies in Internet marketing, management accounting, service management, business processes, organization and culture, and learning organization and organization change. The two-part, 80-week contact center management course (which is a distance education, part-time studies course) provides students studies in the following: leadership and motivation, CRM, business processes from a business perspective, contact centers in the new economy, shared services management and research method. During their studies, students learn about the evolution of the call center into the contact center into organizational CRM and the need to measure quality. Dr. Strandberg mentioned that when outsourcing CRM, there can be a tendency to lose the concept of the customer, so he hopes the students who complete the course will keep in mind the lessons they learned at Mid Sweden University about the importance of keeping their customers' concerns squarely in focus at all times as they make their way through the demands of the working world.

The East Sweden Region
In the heart of East Sweden, one and a half to two hours south of Stockholm by train (depending upon in which city you debark), lie the twin cities of Linkping and Norrkping. Ronny Mrtensson, chief officer of the local department for industrial and commercial development, City of Linkping, Elisabet Rydberg, project manager at the East Sweden Development Agency and Agneta Hedfors, business consultant, City of Norrkping, laid out the details of business in Linkping and Norrkping to a discriminating group of journalists in the fine old city hall of Linkping.

Ericsson and Nokia both have plants in the region and Saab Aerospace has been in Linkping for 60 years and has a workforce of 5,500. There are around 30 companies in the area with call center activities, with Convergys setting up shop here in 1998 and Transcom in 1999. Local government cooperates with companies for training, and homes in the region are being wired for convergent communications, making the region a test market for home communications products. The unemployment rate is less than four percent for the region. The East Sweden region, while it may not have the hustle and bustle of Stockholm, offers a civilized way of life and many opportunities for businesses and a cost of living lower than that of Stockholm.

Linkping, which officially dates back to the 13th century, is a town of 130,000 and has a charming old town section. There are approximately 10,000 businesses in Linkping, and the employment runs 35 percent in the public sector and 23 percent in manufacturing. Linkping is in the midst of converting a former military base into a commercial development area. Linkping University, which opened in the 1970s, now has 20,000 students, 42 percent of whom are in technology studies, and Linkping is the number two city in Sweden for graduated engineers. Near the University is Mjrdevi Science Park, which has 5,300 employees in 150 companies and various national research organizations. The companies in the park specialize in software, IT and telecommunications. Mjrdevi is the biggest science park in Europe and the ninth largest in the world. Linkping is also home to the Berzelius Science Park, which focuses on medical and bioscience companies.

Nearby Norrkping is a former factory town of 120,000, and is in the midst of a transformation from old economy to new. In the city center, former industrial buildings such as old paper mills are being renovated for high-tech companies, as local workers are also undergoing a transformation from industrial to knowledge workers. Like Linkping, Norrkping is home to a science park, the ProNova Knowledge Ecology and Science Park, which is located in the center of town in renovated industrial buildings, as is the Norrkping campus of Linkping University, which has 5,000 students. The city is home to many small companies, but also large ones such as Whirlpool Sweden and Holmen Paper. While the city has a strong industrial heritage, it is now actively seeking to increase the number of call centers located there.

For a detailed look at some of the call centers operating in Sweden, see "Inside Swedish Call Centers."

[ Return To September 2001 Table Of Contents ]



SITEL And Avaya Demo Center Opens
SITEL Corp. and Avaya, Inc. recently cut the ribbon on their joint executive briefing and demonstration center, located at SITEL's North American headquarters in Omaha, Nebraska. The center offers a customer relationship management design workshop with interactive demonstrations of CRM technologies presented by contact center experts. The showcase center serves as a briefing facility for both companies, and demonstrates integrated CRM applications including intelligent work distribution, Web chat, Web collaboration, callback, interactive voice response (IVR), e-mail content analysis, fax and Web interaction, unified customer databases and reporting across multimedia access channels. Presentations at the executive briefing and demonstration center combine the capabilities of Avaya's Interaction Management solutions with SITEL's delivery and management methodologies to offer corporate leaders a blueprint for converting their call centers to customer-centric contact centers. A second center is scheduled to open later this year in Brussels, Belgium.

IRT Opens Florida Center
IRT, a multichannel contact center services provider, announced the opening of a new 6,000-square-foot Human Resources and Development Center in Fort Lauderdale, Florida. The facility brings the company's campus to 40,000 square feet, including its state-of-the art call center facility and corporate offices. The new space features recruiting offices and applicant testing stations, three classrooms that can accommodate up to 82 participants, conference facilities, interviewing rooms and an employee lounge. IRT offers a range of customer relationship management services including inbound and outbound teleservices outsourcing, Web site response, inbound technical support, customer retention programs and fulfillment.

StarTek Touches Down In Canada
StarTek, Inc. announced plans to open a 53,000-square-foot facility in Kingston, Ontario, Canada. StarTek purchased the new four-story building and 8.7 acres of land, which will allow for future expansion. The building will be fitted with state-of-the-art e-CRM telecommunications systems to provide technical support and customer service for clients. The site will employ over 1,000 people when fully occupied and will operate 24/7. The hiring of new associates is currently in progress. StarTek's integrated outsourced process management services include provisioning management for complex telecommunications systems, high-end inbound technical support, e-commerce support and fulfillment, Internet support and supply chain management services. Bill Meade, president and CEO of StarTek stated, "We want to especially acknowledge the efforts of Steve Kelly, president and CEO of the Kingston Economic Development Corporation, without whose extraordinary efforts this new facility would not be possible. We look forward to becoming a vital part of the Kingston community."

SimStar Settles In
At New Headquarters
SimStar Internet Solutions, a provider of marketing-focused e-business solutions to the pharmaceutical and health care industries, has relocated its Princeton, New Jersey headquarters to the Carnegie Center, also in Princeton. The 30,000-square-foot space is almost three times larger than its former headquarters. In the past year, SimStar has increased its staff by more than 50 percent to over 100 employees, proving to be an important asset to the region and a contributor to employment growth. SimStar has experienced rapid growth over the past three years and was recognized among the 500 fastest-growing, privately held companies in the U.S. by Inc. Magazine for the second consecutive year.

Stream Online In British Columbia
CRM outsourcing and support services provider Stream International opened its third Canadian customer interaction center in Chilliwack, British Columbia. At full capacity, the company expects to employ approximately 900 people. The City of Chilliwack, through its economic development organization, the Chilliwack Economic Partners Corp. (CEPCO), is mandated to create new employment, expand the commercial tax base in Chilliwack and create economic growth in the community. The Province of British Columbia, through the Linx BC program, provided $500,000 to assist in the training of workers for the new facility. Other financial assistance was achieved from Human Resources Development Canada, the Provincial Ministry of Social Development and Economic Security and the local Sto:lo First Nations community to support the training of the new employment positions at the Stream Center. Stream expects to fill its site management positions primarily from the local Chilliwack area.

AFFINA Expands Facility, Program Support For Medicare Services
AFFINA announced plans to expand its inbound 1-800-MEDICARE program in support of service goals announced by the U.S. Department of Health and Human Services. The company currently manages inbound services, support and literature fulfillment for Medicare recipients who call the toll-free information number for the Centers for Medicare and Medicaid Services (CMS). AFFINA will operate 24/7 and add an advanced level of customer service support to help Medicare beneficiaries identify and select HMOs. The enhanced services will add about 80 new jobs at AFFINA's Peoria, Illinois operation. The facility also will provide literature management and distribution, telecommunications management and an information warehouse from which data are collected and used to identify opportunities to enhance the 1-800-MEDICARE program and other Medicare initiatives. AFFINA expanded the Peoria center by adding 10,000 square feet of service area and updating the facility's technologies. Additionally, the company will open a 40,000-square-foot customer contact center in Suffolk, Virginia that will employ up to 450 people.

[ Return To September 2001 Table Of Contents ]


InSite On Bavaria

If you are looking at central Europe for setting up a call center or opening a base for sales and marketing operations, Bavaria may be worth your consideration. Bavaria is one of the world's leading centers of information and communication technologies development, making it an ideal location for high-end call centers. Bavaria has programs of regional development offering investors setting up call centers a variety of support options. In 1999, the Communication Center (of) Nuremberg (CCN) was established as a center for the recruiting and training of call center personnel. The CCN also has developed programs of vocational and occupational education, and serves as a center of research, development and hands-on learning. The government of Bavaria provides financial support to persons receiving vocational or ongoing occupational education at the CCN. Bavaria occupies a major position in virtually every new technology cluster, and a modern infrastructure makes it a hub for West-East and North-South trade in Europe. The Bavarian economy is characterized by the presence of both global companies and small to medium-sized industry, trade and service enterprises. Bavaria's economic policy is summed up by the phrase "new products, new firms, new markets," and the state economic authority and allied bureaus offer information, advice and support to any company wishing to establish itself in the region.
www.invest-in-bavaria.com/+49-89-21-62-26-42

[ Return To September 2001 Table Of Contents ]


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