The image of the UK contact centre is not positive at the moment. The high-profile cases of BT and the Prudential moving large chunks of their call centres offshore are not exactly trend setting. However, they do suggest unrest in the industry.
Many vendors believe this inference is unwarranted. While the cost benefits for large corporate call centres may be difficult to ignore, the knock-on effect is that vendors and distributors are also keen to push the SME angle.
In fact they go further than that. They say that the contact centre market has never been healthier and is set to boom. Resellers with experience of selling to SMEs are well-placed to take full advantage of bags of healthy margins, they say.
What? Contact centres for SMEs? Have these vendors and distributors gone mad? Hardly. The market for SME contact centres has been earmarked by analysts Datamonitor and Gartner as the next big convergence opportunity. With so much energy and confidence in this sector, there surely has to be some truth in it.
However, many resellers must be convinced that getting involved in a convergence-type product such as contact centres is worth the investment.
Markets for contact centres
This is understandable, given the financial and time demands of staff training. The key, though, is to look at the SME market and ask if the business is really there. An obvious target is local government, and some VARs have already had success here installing contact centres.
The e-government initiative is pushing all local councils to have web-enabled contact centres by 2005. Many have already started and are looking to link together disparate departments with CRM systems too. The idea is to help councils deliver services that fit their particular remits, removing the need for an one-solution-fits-all approach, which is often wasteful.
Council requirements, of course, vary and many are using a mix of outsourced IT and in-house functions such as CRM and computer telephony integration.
It's the reseller that stands to benefit here. The contact centre is a front-facing add-on to what has been going on behind the council scenes in the past few years. With a little training, IT resellers would be well-positioned to help local councils implement the necessary infrastructure. (Have a look here for more information on e-government.)
Other vertical sectors, such as retail and leisure, are also being touted as good areas for contact centres. Frances Robinson, account director for call centres at Alcatel, believes the opportunities are wide and varied for selling into SMEs. She points to retail as a major vertical.
Alcatel reseller Amillan has just secured a contact centre deal with Dixons Group as part of an overall telephony upgrade to IP-enabled services. Central to this upgrade is a 1,100-seat IP-enabled Alcatel Omni Contact Centre Solution, which has been installed over multiple locations, with the aim of improving customer service.
Robinson also points to other areas of interest where a number of sites need to be working more closely together to enable improved customer-facing services. "As well as local government, businesses such as estate agents, libraries, gyms and sports centres would benefit," she says.
"If IT resellers have got the stomach to broaden their portfolios and skill sets then there are good opportunities in a wide range of SMEs."
Andy Nolan, senior product manager for applications at distributor Crane Telecommunications, goes even further and claims that there are opportunities in any SME with fewer than 50 seats.
Jo Blood, Crane product marketing manager, claims that demand in the SME space will signal "the growth of the informal contact centre". The opportunity is not about large centres but small units of integrated data and communications servicing the needs of SMEs at affordable prices, she says.
Two verticals that keep cropping up are the financial services industry, particularly customer-facing agents and brokers, and retail. Both Alcatel and Avaya have growing lists of customer contact centre installations in these areas.
These are mainly corporates but there are signs of movement in the SME sector. For example, Avaya reseller iQual has recently installed an IP Office contact centre for ethical insurance company Animal Friends.
Customers will take some convincing
As with any relatively new business solution, most customers will take some convincing. For resellers there are potential problems, not least due to customer apathy and budget constraints.
A report commissioned by Vocalis last year showed that one in 10 Britons don't like conducting business by phone because it has grown more inconvenient. Vocalis concluded that this was largely down to inadequate call centre installations, where some businesses had tried to cut corners or install applications without backing up the call options with sufficient numbers of trained staff.
Voicemail systems, for example, have turned off customers, and that, according to Vocalis, is costing British businesses £12bn a year. It is a bold claim but worth considering. If consumers are switching off to companies employing call centres, then companies may start switching off call centres. It is logical, isn't it?
Possibly, but the vendors argue that technology has changed. Contact centres, as they are now called, are less sterile and more interactive because the technology now enables a greater range of integration and therefore more tailored services.
Perhaps some of this insufficiency was down to early adopters and poor migration from traditional to IP-based telephony? Today's SME contact-centre applications automate many of the customer bugbears caused by human inefficiencies, such as slow answering and rude employees, as well as taking into account additional communication streams such as instant messaging.
Openness and easier integration with legacy technologies also has been of paramount importance to vendors and distributors alike.
According to John Bell, business development manager at contact-centre specialist distributor Dacon, there is still room for resellers to make money here by concentrating on the migration and infrastructure angle. The opportunity for selling contact centre solutions to SMEs, he says, lies with the migration from traditional to a converged solution.
"IT resellers need to have an understanding and knowledge of the range of products and technologies that are required to take the SME through the transformation from the traditional voice infrastructure to the complex operation of handling multiple types of customer interactions, for example email, chat and web call-back," he says.
"If resellers can demonstrate to the SME that they understand what is driving the implementation of the contact centre, whether it is increased revenues, decreased costs, improved customer service, enhanced productivity or leveraging existing technology investment, and can find an appropriate solution, then the opportunities are available.
"It is here where the reseller can really add value to the SME and win the business."
It is encouraging talk, but how can it be done? Avaya, which has just set up an exclusive contact centre accreditation for resellers called the CC Club, believes the key for any reseller is to get to grips with the applications, because ultimately this is what drives contact-centre sales to SMEs.
"The value is in the application," says David Groves, Avaya's SME contact centre specialist. "If you can sell this, the rest should fall into place. We have measured the return on investment for our applications at about three to four months. That has to be attractive to customers."
Avaya has also been quick to implement considerable training practices for its resellers. All of its distributors are expected to offer training, a point driven home by Northamber spin-off NV3, which invested in a reseller sales and technology training facility in Weybridge last year.
The CC Club, which currently has seven members, is the pinnacle of an Avaya reseller's achievement in selling contact centres, There are, of course, training and cost benefits for making the grade. This is the cream of the trade, but for smaller resellers the requirements are straightforward: education and training.
Crane is about to launch a dedicated web site for resellers wishing to gain Avaya accreditation as part of its recruitment drive to get more SME-focused contact centre resellers on board. Blood says that training is "essential" and Crane offers either training from scratch or refresher courses for the more experienced.
She sees the SMEs as a golden opportunity for resellers to reap healthy margins, "because they already offer a greater knowledge of the server side of the solution" and would therefore pick up the processes quickly.
Alcatel, too, is big on training but Robinson is keen to emphasise Alcatel's willingness to "hand-hold resellers" through the early stages of sales and installations. "We're trying to make it easy for resellers," she says.
"We have a customer-readiness programme to ease them through the early stages, so they don't have to make a huge initial investment."
Robinson is also keen on partnering. Alcatel actively partners IT and voice resellers in the interests of solving customer problems. It works too, apparently. "We put CRM supplier SoftLab and South West Telecom together and it has worked well. We can help broker those relationships," she says.
The collaborations between vendors are getting interesting too. Avaya has teamed up with Hewlett-Packard and Microsoft to 'sex up' its contact centre offering, the latter deal being for the Microsoft CRM application.
It is a sign that vendors are doubling their efforts to push convergence still further, to match applications with underlying technologies to ensure compatibility and an easier sell for the channel.
But with all the will in the world, the sales will come only if customers have the budget. Most people contacted believe that SMEs are in good shape and have not suffered to the extent that corporations have over the past three years.
Local councils have, of course, received considerable new funding from central government to get digital services up and running, but this is not always as easy as it seems. Reports of empty council coffers and projects behind schedule do nothing for confidence.
Then there is retail. Is it in a fit state to invest? Like anything, this will have to be taken on a case-by-case basis. Some sectors may be more stable than others and local knowledge would count for a lot here, but it is still hard to see this being an easy sale on the high street.
But the industry's gut feeling is that this market is a goer and that customers will come, purely because the products are good, affordable and show a quick return on investment for the customer. If that is how SMEs are going to measure it then it is definitely worth a punt.
Outsource the goose
Getting SMEs to outsource their contact centre requirements to you may seem a little daunting at first, especially if you are relatively new to the converged space.
However, Alcatel call centre account director Frances Robinson believes this is a great way for resellers to reel in nervous customers. "If customers are unsure about investing in contact centre technology, then outsourcing is less risky and doesn't demand the immediate training of staff.
"We put customers in touch with resellers that can manage this service and it works well. They'll get to a cross-over point where the customer eventually recognises the benefit of having a contact centre fully deployed in-house," she says.
It is perhaps a soft way of getting the customer onside, but to manage a service such as this would take investment on the part of the reseller.
However, it seems the rewards are there for those plucky enough to go down that road. Alcatel uses its distributors to help resellers manage outsourcing, and Robinson believes it is a tactic well worth considering.
"We're watching [outsourcing's potential] closely," says Andy Nolan, senior product manager for applications at distributor Crane. "A trend is definitely emerging and companies are starting to provide desktop support.
"Some of our resellers already do this. It could be a data reseller opportunity, as the voice dealers are more about providing products and not so much about services, although they are trying to pick this up."
Selling contact centres to SMEs was a "£54m opportunity for the channel in 2003", according to a Gartner report on call centre trends in western Europe last November.
Although we have got only a few months of the year left, David Groves, Avaya's SME contact centre specialist, claims that this figure could rocket in 2004, especially as the statistics don't include equipment sales, handsets and additional services.
Datamonitor, meanwhile, believes that despite a slow acceptance of IP-based call centre technologies, the market is about to blossom with more businesses recognising the cost benefits and multimedia capabilities of IP.
At present, just four per cent of call centres in North America and EMEA are IP-based. The report, Reassessing the Opportunity for IP in Call Centres, estimates that by 2007, the number of IP call centres in North America and EMEA will have trebled.
"With Automatic Call Distribution system revenues to start declining soon, migration to IP is no longer a choice for vendors and they must prepare themselves now. They will have to tackle the issue of distribution and ensure their salesforces and distribution partners present IP as a good alternative to traditional telephony," the report states.
Datamonitor predicts the number of IP call centres in EMEA will increase from 1,168 in 2003 to 4,558 in 2007 - a compound annual growth rate of 55 per cent over four years. Key components of any successful shift to IP include education, "a priority", according to the report.
A call for greater reseller incentives for selling IP-based systems will no doubt get a thumbs-up from the channel.
Case study: Animal friends
Avaya SME reseller iQual and authorised distributor Westcon have undertaken the first implementation of Avaya's IP Office 1.3 for Animal Friends, a pet insurance business based across two sites in West Sussex.
IQual installed the system at Animal Friends' contact centre, consisting of seven people in Billingshurst. It uses IP telephony to link the contact centre with its second site in Lancing, as well as for remote working at other locations.
Chris Fairfax, marketing director at Animal Friends, comments: "IP Office allows us to give a fast but effective service to more than 150 customers who call every day, with its call tracking and messaging capability.
"In addition, it helps us identify customers before their calls are connected to our agents, so our staff can provide useful information to them such as details on other policies from home and contents to dog grooming insurance. We are unlikely to miss any sales opportunities as all customer voicemail messages out of our main office hours are emailed to our second site so that they can be dealt with immediately."
In future, Animal Friends plans to use IP Office to support satellite TV marketing campaigns. Often these require customer service staff to work in the evenings to handle sales enquiries generated by the campaigns. Using IP telephony, IP Office has the flexibility for staff to securely access the network at home. Also, this allows the business to save on office operational costs.
"We launched IP Office to give SMEs access to the features and IP-based networking capabilities of big-business communications systems, including more capacity, improved security, greater call coverage, better call tracking and the ability to connect with a greater variety of Avaya IP phones," says David Spiby, product strategy director at Avaya's small and medium business solutions organisation.
"The simplicity, power and affordability of Avaya's IP Office have proved extremely attractive to businesses looking for an all-in-one communication system," says Paul Blundell, managing director of iQual. "The new software release makes an already best-in-class product even better."
Amillan (0870) 733 0999
Avaya (01483) 308 000
Call Centre Association (020) 7245 5417
Crane Telecommmunications (01444) 230 004
Dacon (01442) 233 222
iQual (08701) 633 320
NV3 (020) 8401 7800
Vocalis (01223) 846 177
Westcon (01753) 797970
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