April 2000

BY RICH TEHRANI, GROUP PUBLISHER, TMC

Go Right To: Communications Solutions EXPO SPRING 2000

Q: What begins with I or E, ends in .com, has CRM in its business plan and is worth less than 10 billion dollars?

A: Nothing.

It is amazing what is happening to publicly traded CRM and e-commerce companies. I remember five years ago when another sector was growing just as quickly: teleservices agencies or call center outsourcers. There was a time when the stock of one of the leading teleservices agencies increased more than 450 percent in value in one year. Suddenly, for a variety of reasons, the party was over and the public valuations of all outsourcers languished for years.

Making matters worse for valuations in the call center outsourcing industry was the rise of e-commerce. In fact, as e-commerce grew in importance, many industry experts pronounced call centers dead. Some surmise that these are the same "experts" who pronounced the demise of movie theaters when VCRs were introduced, the demise of mail when fax was introduced and the demise of fax when e-mail was introduced.

These so-called experts felt that call centers would lose all their business to Web sites. What wasn't taken into account, however, was that even on a Web site, customers need personal attention. (I have yet to shop on a Web site that has made it easy for me to call an agent to get help.) Beyond this simple reasoning lies the fact that millions, if not billions, of brick-and-mortar transactions will move to the Web and a portion of these transactions will need contact center/CRM attention. The call center industry and call center outsourcers are facing a revival, not a downturn. It has recently become apparent that the e-commerce sites that provide connections from their Web sites to live agents and focus on CRM will become e-commerce leaders.

The question becomes, how do all these emerging e-commerce companies quickly staff for and adapt their contact centers for the new ways of doing business? The answer is, they may not need to. Recently, traditional call center outsourcers have begun to wake up and are embracing CRM, realizing they have a golden opportunity to enjoy rapid growth rates once again.

What hurdles lie before these service agencies on their quest to become CRM outsourcers? I recently posed four questions on this topic to executives at eight leading teleservices agencies: Eric Greenberg, President and CEO, Millennium Teleservices; Mike Littell, President, EDS Customer Relationship Management; Robert Scott Moncrieff, Senior Vice President of Marketing, SITEL Corp.; Wes O'Brien, President, Precision Response Corp.; Basil Bennett, President, eCRM, Convergys Corp.; Roger LeFevre, CEO, Target TeleServices.com; and Ruth M. O'Brien, Senior Vice President, TeleServices, Associates Commerce Solutions. I believe you will find their answers quite informative on where teleservices agencies are heading in providing CRM services for their clients.

Q: How do you see teleservices agencies responding to CRM challenges?
Eric Greenberg: Teleservices agencies will need to expand their service offerings to take control over all channels of communication. By seamlessly integrating these channels and combining them with database management tools, teleservices agencies will be able to offer turnkey outsourcing solutions that allow companies to quickly reap the benefits of e-commerce and the Internet.

Mike Littell: Teleservices agencies need to expand their capabilities to include multichannel customer interaction -- Web, phone, fax, e-mail, snail mail, text chat, voice over IP -- to position themselves to deliver services through effective customer interaction centers. Clients are recognizing that CRM is a strategic asset. They are beginning to see the advantages of transforming their CRM consulting, systems integration and outsourcing needs in order to foster behaviors, and implement processes and technologies supporting coordinated customer interactions across channels. To offer true CRM, however, you need to be capable of integrating customer information to provide a single, integrated and intelligent view of customers, drawing on a client's enterprise knowledge base. This customer intelligence empowers service agents to build relationships with customers. Where some teleservices agencies fall short is in the areas of data warehousing, data mining and analytics, which are all key to adding more personalization and insight to each customer interaction. In order to claim an end-to-end solution, teleservices agencies are scrambling to form alliances and make acquisitions in these areas. Similarly, we are seeing increasing demand for customer care operations with real-time links to order management and reporting. These companies are challenged to change from a call center mindset to integrate their legacy customer care operations with product distribution and fulfillment. Further, responding to the CRM challenge entails the ability to deliver solutions across vertical industries as diverse as banking, retail/e-tail and travel. To be a true CRM provider, a company needs to make a commitment to providing tailored solutions that can serve a wide range of business needs.

Robert Scott Moncrieff: We see "teleservices" as a thing of the past, as teleservices agencies will have to successfully make the transition from call center provider to eCRM (electronic customer relationship management) providers. eCRM encompasses all communication channels ranging from the telephone, to fax, to e-mail, to white mail, to the Internet, to wireless, etc. It does not make sense for a company to have one provider to handle their phone contacts, one for e-mail and another one to support their Web site. Also central to eCRM is the creation of a unified view of every brand's individual end user -- their preferences, lifestyle data and details of products and services they may have or may have inquired about. In this way, eCRM providers have the capability to monitor and add value to every "touch" during each customer's lifecycle.

Wes O'Brien: There is no question that traditional teleservices agencies will have to adapt to the new world of CRM. Clearly, the main challenge of CRM is being able to use it to broaden the base of services and deliver a more comprehensive solution.

Q: How do you see the burgeoning ASP market affecting the traditional teleservices outsourcing business model?
Basil Bennett: Good question. For a robust, integrated, multichannel front end to work efficiently, it needs to have complete interconnectivity to back-end client systems. This requires customized integration, which runs contrary to the very design of the ASP model. This does not exist today, although leading companies are working on a standardized connectivity.

Point solutions are easier for the ASP model, particularly if the client is willing to let them operate on a standalone basis. For most companies, however, this will be a transitional phase to an integrated, multichannel solution. We see rapid client dissatisfaction with non-integrated customer contact points.

Finally, the fully loaded cost benefit of an ASP model in call center work maxes out at about 200 seats, which will limit ASPs, for now, to mid-small clients. As an aside, the bottom edge of the cost model is effective at about 20 seats, so ASP is not efficient for very small clients either.

Timothy F. Kowalski: Traditional teleservices companies that cannot compete with ASP-hosted CRM solutions will be at a competitive disadvantage. The ability to provide outsourced CRM support either combining live customer service representatives (CSRs) with technology or utilizing advanced technologies only is critical to offering a comprehensive outsourced CRM solution.

Roger LeFevre: ASP is a hybrid, outsourced solution, maybe even a stopgap measure to the traditional teleservices provider. There is such a push toward self-help customer service models. However, it has been proven time and again that customers ultimately want to interact with humans at some point. To the extent that ASPs intertwine the use, or at least the availability of live [real-time] support, they provide a value-add to the interaction cycle. Nevertheless, much like interactive voice response (IVR) and voice mail, customers still will want to "zero out" to speak with a CSR, if desired.

To be sure, traditional teleservices outsourcers will lose some business to ASPs -- especially for rudimentary functions -- unless, of course, the outsourcer becomes the ASP. Transform, change, adapt and grow with the times.

Ruth M. O'Brien: Due to the explosive growth of the Internet and e-commerce, companies want to quickly implement the newest technologies and use them as a competitive advantage. Teleservices agencies must continue to invest and develop multiple systems and applications to provide the greatest flexibility and the best CRM solutions to the client. Teleservices agencies must continue to develop strategic alliances with ASPs who can integrate with their current technology partners, which reduces the time and cost of managing multiple relationships. We look for ASPs that are producing and continually improving products that address the requirements of the changing customer support environment.

I hope you found this short Q&A informative. Next month, we will continue this discussion as our experts answer the following questions: "What are the technology hurdles that must be overcome for: A) in-house CRM and B) outsourced CRM?" and, "Which implementation of CRM is faster and more cost-effective?"

Sincerely,

Rich Tehrani
Group Publisher
rtehrani@tmcnet.com

Many teleservices agencies will quickly adapt to CRM, delve into the Internet and become experts at e-commerce in an effort to woo the latest generation of companies that need outsourcing support. Outsourcers that embrace change will be the leaders in the new millennium. Outsourcers that fail to change with the times will simply cease to exist in this .com world of ours.

Outsourcers, of course, are no different than any other company. We must all embrace the latest technologies and try to capitalize on them. In fact, if you were to hire the best business consultants in the world and ask them what your company needs to do to ensure continuous prosperity in business, they will tell you one simple thing: "Spot new trends quickly and integrate them into your business even more quickly."

Luckily, you are not alone in this endeavor. In fact, here at TMC, we are also in the business of spotting the crucial trends you need to know about. Twice a year, I call a series of meetings with my entire editorial team and members of TMC Labs so that we can determine the most important communications technologies that will affect our future. We then take each crucial trend and develop live, unique and educational attractions surrounding them, and then integrate these ideas into each Communications Solutions EXPO... Spring and Fall. Communications Solutions EXPO Spring 2000 takes place in Washington, D.C., April 26-28. This show has quickly become the de facto communications industry leader.

Through a series of unique and free educational attractions on the exhibit hall floor, all of which TMC has pioneered, in addition to comprehensive conference tracks, we ensure that a few days at Communications Solutions EXPO will teach you everything you need to know to prosper in the new world of Internet communications.

I present some of these trends below and how each trend directly translates into an area or areas of Communications Solutions EXPO.

Customer Relationship Management (CRM)
TMC has been covering this field since 1982. In fact, this publication, C@LL CENTER CRM Solutions, is the longest-running magazine covering this topic. With the help of this team, we have come up with the following crucial attractions for your corporation.

In The Exhibit Hall
Live CRM Showcase: Developed in conjunction with Aspect Communications, this exhibit hall attraction showcases the latest CRM solutions to enable you to manage any type of customer interaction in a consistent and highly flexible fashion.
Live, Web-Enabled Multimedia Call Center: This is a live, on-site working call center employing the latest Web-enabling technologies and applications that will be produced in conjunction with CellIT. At its previous outing this call center made over 11,000 customer contacts in two days.

E-Sales/E-Service: There will be a learning center and pre-conference track on this topic so you can see and learn about the technologies you need to effectively take advantage of this booming field.

Conference Tracks
CRM Solutions: An exceptional conference track designed to inform you about every crucial aspect of CRM and how it relates to your organization.

Call Center Solutions: The call center is the best ally for e-commerce, since it allows a Web site to enjoy a human touch through Web call and chat technology. Find out how your call center can provide world-class sales and service as well as integration with your e-commerce strategy.

Award Winners
CRM Excellence Awards: For the first time, the editors of TMC's publications have put their heads together to pick the CRM products with the greatest contribution to the industry. The award winners will be announced at the show.

Internet Telephony
This field continues to be one of the fastest growing, due to the immense interest in convergence being shown by enterprise and service providers alike. Expect pre-conference and conference tracks on this topic as well as a display of ConvergeNET, the industry's largest group of disparate exhibitors displaying their VoIP products interoperating.

In The Exhibit Hall
Internet Phone Center: Sponsored by Quicknet Technologies, Inc, all Communications Solutions EXPO Spring 2000 attendees will be able to make FREE International phone calls at the show through the use of multimedia PCs using a variety of ITSPS to compare the quality of their networks.

IP Telephony Testing Learning Center: Come see the tools you need to accurately test Internet telephony solutions for weaknesses prior to deployment.

The Booming Service Provider And ASP Market
Since the Telecom Act of 1996 and the subsequent rise of Internet telephony, service providers have been enjoying incredible growth and outstanding new technologies that allow them to provide new and superior services to their customers.

Customers are thrilled to be able to purchase these new services that make them more productive and eliminate the hassle of having to deal with CPE equipment. To help you understand the opportunities available for service providers and their customers alike, we present the following attractions:

In The Exhibit Hall
Next-Gen Telco In A Booth: Right on the show floor we have built, and would love for you to explore, an actual ITSP (Internet Telephony Service Provider) complete with profit-generating enhanced services.

ASP Learning Center: This is an objective area on the show floor where you can discover the latest technologies you need to implement to become an ASP, and some of the hottest ASPs around showing you how they can help your company cut costs and become more efficient.

Conference Tracks
Next-Gen Service Provider Solutions: Every- thing a next-gen service provider needs to know.

Wireless Solutions: Touching on every important aspect of this burgeoning industry.

The Dynamic Wireless Market
As I mentioned previously, we will devote an entire conference track to the latest wireless communications trends. We will also have a Next-Gen Wireless Learning Center (get ready for "I want my MTV on my broadband wireless watch"). This attraction promises to be an unprecedented display of the latest and most crucial wireless devices.

It is exactly these types of attractions that have made Communications Solutions EXPO the only show you need to attend in the communications industry. Once again, we have shattered every pre-registered attendance record for Communications Solutions EXPO to be held in Washington, D.C., April 26-28. We have also significantly increased the number of exhibitors and the show's exhibit hall will be sold out by the time you read this. We couldn't be happier.

And don't forget, you can win products worth tens of thousands of dollars, such as a new Jeep Cherokee, digital cameras, Internet telephony gear, Palm Pilots and more. Drawings will take place at the conclusion of the show on April 28, 2000. (You must be present to win.)

Although the on-site exhibit hall registration price has doubled at the door to $50, if you register on the Web right now, it will be free. I personally promise you that there is no better event than this one to help you answer all of your communications questions and needs, no matter what they may be.