June 1999

BY LAURENCE J. FROMM

Call centers and the Internet are two of the hottest topics in customer care, and the intersection of the two is sizzling. In short — call centers are near the top of any company’s list of strategic, mission-critical technology assets. And meanwhile, the Internet is destined to expand and alter customer care.

According to Call Center Solutions (formerly Telemarketing) magazine, more than $700 billion worth of products and services were sold through call centers in 1997, and that figure is expanding by 20 percent annually. More than 70 percent of business transactions take place over the phone, according to the Gartner Group. And worldwide telecommunications deregulation means greater availability of telephone service around the globe.

As industries continue to deregulate, in the United States and elsewhere, former monopolies will now have to earn their customers. Fifteen years ago, the deregulation of long-distance phone service in the U.S. spurred long-distance carriers to improve their inbound call centers and add outbound calls to their marketing programs. With deregulation of energy and local phone service on the horizon, and with cable TV facing competition from satellite and broadband access, expect more of those evening telemarketing calls.

INDUSTRY AND TECHNOLOGY CHANGES
Electronic commerce alone is expected to grow almost 800 percent over the next four years, to $35.3 billion by 2002, according to eMarketer. Most traditional mail order businesses � retail computer sales, for example � are better carried out online. Online retailers are growing rapidly in business areas that once resisted mail-order sales. Plus, e-commerce opens up completely new areas of business. The global yard sales enabled by companies like eBay (www.ebay.com), for example, allow millions of entrepreneurs to open their own virtual storefronts.

The call center industry is also in the midst of change. According to the Yankee Group, the market for call centers will just about double in the next four years, from $1.6 billion in equipment sales in 1998 to $3.1 billion in 2002. Call center equipment used to be segmented into either inbound (automatic call distributors, or ACD) or outbound systems (dialers or predictive dialers). Increasingly, however, new call center designs are offering blended solutions that can be flexibly reconfigured into either inbound or outbound solutions to maximize call center staff resources.

Moreover, new call center designs offer greater capability. In a traditional design, an ACD is surrounded by augmentable applications, including interactive voice response systems (IVR), fax-on-demand (FOD) systems, and call-logging devices. Internet gateways are the latest example of call center add-on gear. Some vendors, including Rockwell (www.rockwell.com), Interactive Intelligence (www.inter-intelli.com), and CELLIT (www.cellit.com), offer call centers that include some or all of these various capabilities, eliminating the need for complex, multi-vendor integration efforts. These new-breed call centers are typically built around open systems, enabling their vendors to choose from an entire industry of components to maximize their flexibility and breadth of solutions.

THE INTERNET BRINGS CHANGE
The Internet layers more changes onto the mission-critical call center by enabling more communication media types and network topologies. While a few call centers are already using the latest integrated Web technologies, expect more capabilities to be included on a wide scale. For example, agents will be able to push appropriate Web pages to Web surfers, and surfers will trigger callbacks when the next agent is available, minimizing hold time. Web surfers will also be able to e-mail or text chat with customer service agents. (Some companies using text chat for customer service, interestingly, report that a single agent can handle more than one simultaneous chat session.)

Web surfers will use voice-over-IP (VoIP) technology to connect to existing call centers, for better customer support and lower costs. Many mail order companies would like to funnel their customers to the Web, where customers can service themselves and reduce customer service agent and call center costs. By offering customers a quick and easy way to talk to live agents � via IP telephony � mail-order companies are hopeful more customers will go the Web first, knowing they can get the help they need, when they need it. Some e-commerce companies are also finding that early trials of push-to-talk capability on their Web sites increase sales by up to 50 percent by reducing the number of customers who bail out before completing their purchase.

Internet telephony will also be used to connect to agents, offering greater flexibility at a lower cost. Flexibility increases because agents can be linked to the call center for both voice and data with a single IP connection, facilitating the placement of agents at home. Many call centers would like the option of at-home agents, which saves real estate costs and enables agents to more easily work only the hours of peak traffic. An obstacle to home agent use today is the need for separate voice and data links into an agent’s home. Internet telephony overcomes this obstacle, particularly as more homes get broadband access. And it can also save technology costs, since circuit switches are one of the few technology products with diseconomies of scale � the bigger the switch, the higher the per-unit cost. Packet switching avoids the N x M circuit-switch diseconomies and enables systems to scale ever higher with decreasing per unit costs.

THE CHALLENGE AND OPPORTUNITY
In typical call center fashion, many of these Internet capabilities are added to existing call centers via integration of third-party devices from companies like Webline (www.webline.com) and others. As new generations of call centers develop, these capabilities will be included in the core design, just as new call centers now offer integrated IVR and FOD. With broad access into a call center, and packet telephony connections to distributed agents, the call center of the future consists of call routing software — directing the flow of packets among computers and customer service agents on one side, and customers and prospects on the other.

The explosive call center market, coupled with the Internet tidal wave, represent unprecedented opportunity and challenge for call center vendors. Companies that can quickly adapt and enhance their products have a tremendous advantage. Today’s leaders who find it difficult to modify their design approach will see their market share erode. The new leaders will be companies designing their products and their companies to not only embrace the changing technology of today, but to easily embrace the changing technology of tomorrow.

Laurence J. Fromm is vice president, new business development for Dialogic Corporation. Dialogic is a leading manufacturer of high-performance, standards-based computer telephony components. Dialogic products are used in fax, data, voice recognition, speech synthesis, and call center management CT applications. The company is headquartered in Parsippany, New Jersey, with regional headquarters in Tokyo and Brussels, and sales offices worldwide. For more information, visit the Dialogic Web site at www.dialogic.com.