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High Priority!
November 2002


Rich Tehrani Everything Old Is New Again

By Rich Tehrani
Group Editor-In-Chief, Technology Marketing Corporation


I heard the old show tune that is the title of this column on NPR on the way to work the other morning, and the refrain stuck in my head, reminding me of the stories of two companies with whose CEOs I recently met, Firstwave Technologies and StarTek, that have long track records in the industry and have been quietly reshaping themselves into new companies, building on their traditional core values while improving their offerings. 

StarTek  was founded in 1987, issued its IPO in 1997, and has been undergoing a transformation in the last few years, enlarging its profile through broader marketing campaigns and the addition of William Meade as CEO and Michael Burke as senior vice president of Marketing and Sales. Meade came to StarTek with extensive executive experience at American Express, where he had been involved with numerous strategic, planning and re-engineering programs. Bill Meade has made a series of major changes in the company, including adding a wide array of new executive talent and a strategic planning focus. 

As part of Bills emphasis on strategic planning, StarTek recently signed a partnership agreement with Novantas, which advises services institutions on new customer-driven approaches to strategy and business. Through the application of proprietary technology such as Mindswift, Novantas supports rapid testing of multiple dialog strategies to improve customer service, cross-selling, retention and collections. In general in todays world, strategic relationships are critical, said Bill, and in this relationship, he continued, the alliance benefits the clients of both companies as clients now have a broader array of critical call center outsourcing solutions, integrated and woven into a consolidated global resource.

Even though StarTek is a company of approximately 5,000 employees, with 15 facilities in the U.S., Canada and the U.K., Bill said that StarTek maintains entrepreneurial roots that say when we have a challenge we have to get it done instead of the corporate mentality that says we have 10 things that get in our way of doing something. Bill also emphasized that StarTek has a strong balance sheet, and its strong physical and financial position helps it as it has the capital requirements to get things moving quickly. For example, StarTek had a 1,000-seat call center for Deutsche Telecom up and running in 60 days.

StarTek has a diversity of service platforms, so, according to Bill, we dont target just clients for call center programs, but look for solutions to our clients problems. For its clients, StarTek delivers three service platforms: teleservices, including all forms of technical support and customer service; provisioning management services, incorporating end-to-end business process management for complex and critical tasks; and supply chain management services, incorporating comprehensive management of processes, vendors and production of materials.

Looking to the future, Bill said, outsourcing is going to be a growth sector. In the post-9/11 world, budgets have been cut, but we foresee that in 2003 companies are going to even more closely examine what their core competencies are, which means continued growth in outsourcing. Another trend he has noticed is that companies are consolidating to fewer outsourcers as they are looking to have to manage less of them, especially ones that have performed well for them. In general, companies are looking for outsourcers with broader capabilities. It seems to be paying off for StarTek, which experienced 200 percent growth in call center work from 2000 to 2002, handling roughly 200,000 transactions per day.

From Brock Control Systems To Firstwave
Customer interaction software really flourished in the latter part of the nineties but the eighties was the time when this category of software was invented. We used to call this category telemarketing software and there was a handful of leaders in this space back then. On the desktop, Telemagic was the runaway leader and SaleMaker was a close second. When it came to the enterprise, there was one undisputed leader: Brock Control Systems. 

To set the timeline appropriately, when Brock sold its software, users usually had dumb terminals and a UNIX-based server. The Informix relational database was the heart of Brock Control Systems and since we were in an age where databases didnt talk to each other, the underlying data store was a make-or-break feature, so the software later became database agnostic. Brock had an amazing grip on the customer interaction software business. It literally crushed all of its competition. By March of 1993, after going public, Richard Brock, the companys charismatic founder, became less involved with the running of the company. Around this time, a myriad of new companies invaded the space and raided talent and Brock Control rapidly lost its market dominance.

A few years back, Richard Brock showed up at one of TMCs trade shows and announced that he had transformed his company and made it better than ever. I was skeptical. After falling off the map for so many years, I thought it very difficult to get back into this space.

Indeed, a few weeks ago, Richard, as dynamic as ever, came to my office and told me how his new company Firstwave is going to change the face of customer interactions. I am now a believer and Ill tell you why. 

Richard reiterated what most of us already know many CRM systems do not work as advertised. In Brocks opinion the problem basically boils down to feature overload. So many companies are analyzing and weighing the features that customer interaction or CRM software has, they lose sight of finding the right product to fit their application. Typically, many companies choose the product with the most features. Being a scuba diver, Richard likened the feature overload problem to diving with multiple air tanks. Surethe more air the better, until you come up and get hammered by the surf and try to stay high enough to get air through your snorkel while your extra empty tanks weigh you down. Companies are drowning in features, Brock exclaimed.

Firstwave instead works with a company to determine its customer strategy: Do you want to retain customers or acquire new ones? What are your goals? How can we measure achievement? They then analyze and map out how you deal with your customers today and determine your top two or three problems and fix them. 
I asked for an example of how Firstwave software can be used for a typical business. In response, I was asked to imagine a gym that has high enrollment numbers but low retention. By focusing on customer experience management (a term that Brock is keen on) management can install an application that detects when a new member enters the gym. Whenever a trainer is freed up, an application tells that trainer to find the new member. To make life easier, a photo is sent to the trainers PDA. The trainer finds the customer and calls him or her by name and helps the new client get the hang of the equipment and personalizes the gym experience. 

For those of you that still want to know about features, Firstwave is XML-based and is finishing up a .NET version. It can provide service through an ASP model if necessary. It is not every day that someone who can be considered the founder of the CRM software space emerges after a decade, reinvents his company and redefines a market. If history is any guide, Brocks determination, charm and unique way of differentiating his company will allow him to grow nicely in a market that has matured in the last decade but can always stand to improve some more.

Sincerely,
Rich Tehrani
Group Publisher,
Group Editor-in-Chief
rtehrani@tmcnet.com

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