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Call centre technology was stuck in the emerging category so long that many solution providers hung up on the market. But the call centre market is now getting new legs, created by an explosion in online shopping and the CRM market, of which the call centre is an integral component.

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By  Jon Tullett Published  November 23, 2000

Call centre technology was stuck in the emerging category so long that many solution providers hung up on the market. But the call centre market is now getting new legs, created by an explosion in online shopping and the CRM market, of which the call centre is an integral component.

Thought. Velocity, which integrates CRM solutions with back-end accounting systems, was not doing any call centre work a year ago, says Thomas Crafton, CEO of the Vancouver integrator.

“Now it’s about 10 percent of our business, and by the end of the year it’ll be about 30 percent of what we’re doing,” he says. “By the end of 2001, 50 percent of our business will be help-desk-focused.”

Convergence is the buzzword in this market. The new call centre model integrates customer inquiries via the Web, e-mail and phone into a single system.

And a driving force behind the market is the advent of better technology. CRM developers are tightly integrating call centre modules into their offerings.

CRM vendors also are forming tighter relationships with networking vendors to exploit the convergence of voice and data on the network. Oracle formed a partnership with Cisco Systems, and Siebel Systems is partnering with Avaya, the Lucent Technologies spin-off.

For Oracle, it was a case of leveraging new technologies for its Applications Release 11i, which allows Oracle-based CRM systems to use Cisco’s network routing and telephony features.

“We realized that we needed to improve our product line as call centres migrate to interaction centres,” says Marcus Heth, vice president of Oracle’s interaction centre program office.

“Cisco has the infrastructure, but they didn’t have the business applications, the tele-services, the marketing automation,” he says. “So our products have very little overlap.”

Of course, the big driving force behind the resurgent interest in call centres is not so much better technology as it is the problem that technology is trying to solve. And the main problem is the e-commerce explosion.

As customers purchase more goods and services over the Internet, they are demanding better support from online venues, solution providers say.

“There’s quite a bit of work to be done as e-commerce models start evolving,” says Steve Zolo, president and CEO of OnPoint, Forth Worth, Texas. “Customers that created e-commerce applications didn’t consider customer service as well as they probably should have.”

Brian Huff, an analyst with Data Monitor, says three out of four Web transactions are now being abandoned midstream. At least one of those, he says, could be saved by providing adequate online service. Last year, the lack of online support cost merchants $6.1 billion, he figures. If online venues don’t clean up their act, that figure could rise to $63 billion by 2004, he adds.

While online shoppers were tolerant of poor service when online shopping was still a novelty, the honeymoon abruptly ended during the last holiday shopping season after unprepared merchants were unable to deliver on promised orders. The consumer backlash was deafening.

“Vendors have gotten the message that they need to offer better service,” Huff says. “They’re doing that by implementing call centre support via e-mail, live chat and Web self-service.”

The idea that online merchants could just put up Web sites and start taking orders has given way to a realization that e-merchants need to invest in customer service. Those investments are creating healthy opportunities for call centre solution providers. According to Zolo, there are 70,000 customer contact centres in the United States today. By 2003, there will be 80,000.

Zolo says OnPoint has openings for 300 additional customer support specialists to handle its expanding commitments. “More and more customers are looking for turnkey solutions from a provider that works end to end,” he says.

“There is need for a broader solution to interface with customer service, whether it’s via fax, e-mail or chat. As consumers get more sophisticated, there’s more of a requirement to provide those bundled solutions.”

Another factor driving call centre opportunities is simply the desire by businesses to integrate back-office and front-office operations, Crafton says. For one customer, Thought.Velocity created a link in Goldmine’s CRM software that allowed help-desk employees to generate invoices. “We see more and more clients that want that integration,” Crafton says. “It’s driving Web integration for us.”

There are broader implications for solution providers, as well. Some believe integrated call centres could be the catalyst that kicks computer telephone integration into high gear, opening up a host of other opportunities.

CRM “is the killer app,” Huff says. “When you see call centre agents handling multiple tasks, not just answering the phone but answering e-mail and chat, you’ll see opportunity for IP telephony. It’s coming out of the emerging phase, and you’re seeing companies like Cisco and HP and Cisco and Oracle doing just that.”

As its call centre business accelerates, Thought. Velocity is acquiring the CTI expertise by partnering with telephony VARs. “Telephony is a big part of what we’re doing, but it’s not our expertise,” Crafton says.

The growth in call centre solutions also could be good news for the Linux community. Linux is a strong platform for call centre solutions, says Bob Cash, vice president of eOn Communications, North Arlington, N.J. “It addresses formal call centres, but also informal call centres, in a cost-effective, flexible way,” he says.

EOn Communications turned to Linux in 1996 and hasn’t looked back. “I’d like to think it was a brilliant assessment of current and future technologies, but frankly it’s just that we were intrigued by the open architecture of Linux at the time,” says Cash.

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