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The Boardroom Report with Nadji Tehrani
"The Boardroom Report" features exclusive interviews with leading CRM/contact center executives regarding industry news, analysis, trends and the latest developments at their companies. Technology Marketing Corp. founder/chairman/CEO Nadji Tehrani and Customer Inter@ction Solutions executive editor Glenn J. Kalinoski interviewed Michael P. Callaghan, CEO of Opus Group, for this installment of "The Boardroom Report."
Mike Callaghan - Opus Group CEO
Mike Callaghan
'If We Don’t Deliver, You Don't Pay'

Opus Group CEO Michael P. Callaghan's proportional guarantee says much about what his company offers its customers.

"To the extent that, if we only deliver 70 percent of the solution, or 70 percent of the savings, we only charge you 70 percent of the fee," he said. "We've never invoked that, I'm happy to say. If we don't deliver, you don't pay."

His approach to business seems to be paying off handsomely.

"To the extent that, if we only deliver 70 percent of the solution, or 70 percent of the savings, we only charge you 70 percent of the fee. We've never invoked that, I'm happy to say. If we don't deliver, you don't pay."

The Chicago-based provider of integrated operational performance management technology and services was founded in 2002. It took three-and-a-half months for the company to get its first client. Since then, it's been a story of triple-digit growth every year for the privately held company. The company has 50 clients, including some in the Fortune 50, and 80 employees, including 15 in Chicago.

"The call center world is a major conduit for us," he said.

Vertical markets served by his firm include insurance, financial services, healthcare and telecom.

He said performance management is becoming a ubiquitous term and that "everybody" is using it. "We have clients who ask just for the product. We tend to shy away from those opportunities, but eventually they come around back to us anyway."

His definition of the term: a combination of analytics and better information, coupled with process optimization.

"If you go out to the market ... they see it more as a software solution," he said. "The organizations come to the table and say, 'I can't improve performance on the front line because my front-line managers have to look at 30 reports in order to be able to execute.'

The problem is they can't move quickly enough, they can't integrate that data, and they make changes in the business every day and they're constantly chasing their tails because they don't have the ability to see data."

Callaghan approaches the challenge from a services perspective.

"The bigger part of the problem is, once you get that information, what do you do with it?" he noted. "Are you sure that the information you're integrating and incorporating is linked directly to your processes and to the types of improvements that you want to see in the organization?

"We think we're solving a business problem, not delivering a product."

"In delivering the product solution and process optimization in markets where we operate, we end up with an ROI-based solution in hard dollars where we can go into a client and say, 'not only are we going to address this infrastructure problem with data and information, but [also] we're going to be able to take that data and information, show your managers how to use it on a day-to-day basis and deliver you X number of dollars in value over the next four or five months. And, incidentally, if we don't do that, don't pay us. We'll guarantee it.'"

Callaghan defined his company's challenge as educating the marketplace of the fact that it's not just about a product."We've done a horrible job as an industry of saying, 'this is what companies X, Y and Z do [and] this is what companies A,
B and C do.' "

"There's this assumption out there that if you get better information, there's a guarantee that that's going to deliver value. When you think about managers who might have only 15 or 20 minutes a day to review reports and data before the fire drills start, they had better be darn sure they know every number they're looking at, they can decipher it, they can respond to it and move quickly. Giving them a new tool set with entirely new numbers doesn't really solve the problem, even if those numbers are better than the old ones.

"We think we're solving a business problem, not delivering a product."

Callaghan asserted that as the CRM market continues to unravel, that will provide more opportunities for companies in the performance management market.

"We're not saying to clients, 'you need to go out and make another capital expenditure,' " he said. "Use the systems that are there. Use the data that's there."

A criticism he offered regarding the contact center industry is that it has allowed itself to get pulled along "in whatever direction somebody decides it needs to go" during the past 10 or 15 years.

"We've done a horrible job as an industry of saying, 'this is what companies X, Y and Z do [and] this is what companies A, B and C do,' " he said.

He added that, in the offshoring area, the industry is "probably back to more of an even keel," and that during the 2000-2001 timeframe, "everybody" was doing it. His conclusion: there is no shortage of unhappy customers as a result of offshoring, and firms are "repatriating a ton of jobs" that he numbered in the tens of thousands.

"What we forgot is that business process outsourcing is critical to staying competitive, but at the end of the day every business has a DNA and it has something that makes it different from everybody else," he said. "You've got to have that differentiating factor in the way you service your customer. If you offshore it, you lose it."

A continuing "repatriation" will occur, according to Callaghan, who said that offshoring costs are set to increase between 30 percent and 40 percent during the next two years.

"Three years ago, 25 or 30 percent of the deals we were involved in, the client was contemplating outsourcing and [it] came into play somehow," he said. "Today it's less than 10 percent."

For more information regarding Opus Group, see www.theopusgroup.com

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