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MAPS CALL CENTRES: UK APRIL 2002
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This report covers: Call Centres in Europe, Automatic Call Distributor, ACD, Call Centre Agents, Calling Line Identification, CLI, Call Logging, Call Management Applications, Call Screening, Computer Telephone Integration, CTI, Direct Dial Inward, DDI, Display Screen Equipment, DSE, DTI, Electronic Performance Monitoring, FTSE, Full Automation, Integrated ACD, Intelligent Queuing, Screen Pop, Voice and Data Transfer, Voice over internet protocol, WAP, Voice processing systems

Companies covered include: IMS Group, RSL Com UK,The Merchants, Group, Acxiom Corporation, The Merchants' Group, Sitel UK,7c Ltd, Ant Marketing, Brann Worldwide, Broadsystem, CPM InTelMark, Excell Multimedia, Harte-Hanks, iSky Europe, MM Group, MM Group, The Telemarketing Company, Serco Group, Ventura Customer Service Management, Vertex Data Science, Blue Pumpkin Software, Nice Systems, Citel Technologies, Davox Corporation, Mitel, Cincom Systems, The DTS Group, Plantronics,

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TABLE OF CONTENTS

Executive Summary 1
1. Introduction 3
The Topic 3
Objectives 3
Methodology 3
Original Research 3
Problem in the Research Process 3
Definition 4
2. Strategic Overview 5
Call Centres More than Double in 5 years 5
Table 1: Number of Call Centres in the UK, 1995-2000 5
Figure 1: Number of Call Centres in the UK, 1995-2000 6
Approaching 400,000 Workstations 6
3. Industry Structure 8
its Smaller than you think 8
Table 2: Call Centres in the UK by Number of Workstations ( percent), 1998 and 2000 8
Figure 2: Call Centres in the UK by Number of Workstations ( percent), 1998 and 2000 9
Figure 3: Small Call Centres in the UK by Number ofWorkstations ( percent), 2000 10
Table 3: Small Call Centres in the UK by Number of Workstations (number of centres and percent), 2000 10
Figure 4: Larger Call Centres in the UK by Number of Workstations, 2000 11
Table 4: Larger Call Centres in the UK by Number of Workstations number of centres and percent), 2000 11
More than a million workers 12
Table 5: Number of Workstations in Call Centres in the UK, 2000 12
Figure 5: Number of Workstations in Call Centres in the UK, 2000 13
Figure 6: Number of Workstations in UK Call Centres (000), 1995-20 14
Table 6: Number of Workstations in UK Call Centres (000 and percent), 1995-2000 14
Set up costs not falling 15
Table 7: Call Centres — Profile by Industry Sector ( percent),1998 and 2000 15
Lots of Jobs, but Little Promotion 16
Table 8: Lowest and Highest Basic Pay of Customer Service Representatives in England and Scotland (£ per year), 1997 16
Helpful Public Finance 17
From Costs to revenue 17
Limits on Cold Calling, but Electronic Contracts areOK 18
4. Call Centre Trends 20
Automotive 20
Kwik-Fit 20
Financial services 20
Barclaycard 20
Barclays 20
Britannic Assurance 21
Legal services 21
Accident Line 21
Public Sector 22
NHS Direct 22
Remote Shopping 23
DIAL 23
GUS 23
QVC 24
Telecommunications Services 24
Conduit 24
Travel and Tourism 25
Thomas Cook 25
Thomson Travel 25
5. Call Centre Suppliers 26
Convergys Leads the Outsource Specialists 26
Table 9: Leading Specialist Call Centre Outsourcing and Telemarketing Companies, 1999 26
Table 10: Specialist Call Centre Outsourcing and Telemarketing Companies: Ranked by Turnover per Employee and Annual Staff Churn, 1999 29
BT leads advertising 30
Table 11: Major Advertisers of Business Telecommunications Services and Equipment (£000), 2000 31
Outsourcing and Telemarketing Specialists 32
Acxiom 32
Advanced Telecom 32
Brann Worldwide 32
Broadsystem 33
Convergys 34
Direct Dialog 34
Excell Multimedia 34
InTelMark 35
The Merchants Group 35
MM Group 35
Sitel Europe 36
The Telemarketing Company 36
Thus 37
Ventura 37
Equipment Suppliers 38
Blue Pumpkin 38
Business Systems 38
Citel Technologies 38
Davox 38
DTS 38
Genesys 38
IMA 39
Mitel 39
Nice Systems 39
Royalblue Technologies 39
Training ladder develops 40
6. An International Perspective 41
England increases its dominance 41
Table 12: Call Centres in Europe, 1997-2000 41
Figure 7: Call Centres in Europe, 1997-2000 42
The lure of India…. and china 42
7. PEST Analysis 44
Politics 44
Spreading the Work About 44
Why Not the Outer Hebrides? 44
Table 13: Locations of Call Centres in the UK ( percent of members of the Call Centre Association), 1998 45
Too Much to Do 46
Flexible Working 46
Technology 47
Technology to Make Customers Mad 47
Web Integration 47
Web Tears 48
8. Consumer Dynamics 49
Introduction 49
Call Centres Fail to Win Public Approval 49
Call Centres Don’t Help Customers 49
Table 14: Call Centres — An Improvement Over Contacting a Local Branch 51
Crumbs of Comfort for Call Centres 52
Table 15: Call Centres — Remote and Too Impersonal? 53
Frustrated customers 54
Table 16: Call Centres — Efficient for Whom? 56
Young Callers Happier to Talk to Strangers 57
Chronicles of Wasted Time 57
Table 17: Call Centres — Problems of Unfamiliar Voices and Wasted Time 58
Is the Internet Preferable? 59
Doubts Over Call Centre Jobs 59
Table 18: Call Centres — Internet and Employment Attractions 60
Orders Enquiries and Complaints 61
Table 19: Call Centres — Orders, Enquiries and Complaints 62
Table 20: Call Centres — Overall Satisfaction 64
Building Barriers 65
9. The Future 66
Ethos Must Change to Customer Care 66
Where are the Workers? 67
Outsourcing: the Telecoms Hotel 68
Bypassing the Telephone 69
Fraud slows online commerce 71
Probable peak by 2004 72
Table 21: Forecasts for the Future of Call Centres in the UK, 2000-2006 73
Figure 8: Forecasts for the Future of Call Centres in the UK, 2000-2006 74
Conclusion 75
10. Sources 76
Glossary of Terms 86
Specific Definitions 86
A, B, C1, C2, D, E 86
Agent 86
APR 86
Automatic Call Distributor (ACD) 86
Auto to Manual 86
Call Blending 86
Call Centre 86
Call Centre Agent 86
Call Data Recording 87
Calling Line Identification (CLI) 87
Call Logging 87
Call Management Applications 87
Call Monitoring/Taping 87
Call Screening 87
Computer Telephone Integration (CTI) 87
Direct Dial Inward (DDI) 87
Display Screen Equipment (DSE) 87
DTI 87
Electronic Performance Monitoring (EPM) 87
Fax Back 88
FTSE 88
Full Automation 88
GDP 88
Integrated ACD/Database Reporting 88
Intelligent Queuing 88
Intelligent Software Agents 88
Interactive Voice Response (IVR) 88
Load Balancing 88
Manual to Auto 88
NHS 88
NOP 89
OPEC 89
Overflow Handling 89
Private Automatic Branch Exchange (PABX) 89
RPI 89
Screen Pop 89
Speech Recognition 89
VAT 89
Voice and Data Transfer 89
Voice Mail 89
Voice Over Internet Protocol (VoIP) 89
Voice Processing Systems (VPS) 90
WAP 90
A-Z of Definitions 90
Above-the-Line or Main Media Expenditure 90
Annual Growth Rate 90
Below-the-Line Advertising 90
Cif 90
Constant Prices 90
Current Prices 90
Fob 91
Forecasts 91
MSP 91
‘Real’ 91
RSP 91
About the Sources Used 91
ACNielsen MMS 91
Prodcom 92
NOP 92
Trade Association Data 93
Trade Sources 93
Key Note Research 94
The Range of Reports 95

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EXECUTIVE SUMMARY

In the UK, around 3.2 million calls are made every day to call centres or, as they are increasingly termed, contact centres. Around two workers in every 100 have jobs in such centres, which means that approximately 575,000 people work in contact centres.

Outsourcing companies account for around 10 percent to 15 percent of staff employed in the UK's call centres, and this sector of the call-centre business has been growing at between 15 percent and 20 percent a year. Call-centre outsourcing businesses have developed from four main origins: telecommunications companies; communications systems and software businesses; telemarketing specialists; and large companies' in-house call centres, serving markets as diverse as utilities and retailing.

The two largest UK-based outsourcers come from this fourth strand: Vertex Data Science Ltd and Ventura Customer Service Management Ltd. For the purposes of this report, Key Note commissioned an exclusive NOP survey to discover people's attitudes towards call centres, and to see how these have changed since a similar survey was conducted in November 2000.

The 2002 survey found that more people believe call centres waste time, and that the number of people opposed to automated response systems has risen since 2000. Surprisingly, the number of people preferring to contact organisations via the Internet than by telephone fell during the period, albeit by only one percentage point. Only one socio-demographic group - the AB social grade - witnessed a significant increase in preference for the Internet.

The results of the NOP survey make disappointing reading for the organisations that run and use call centres, especially because the public are more critical of these centres in 2002 than they were in 2000. This is despite companies' considerable investments in equipment to integrate communication channels, and to give call-centre staff access to databases of information about customers.

Key Note expects call-centre numbers in the UK to flatten out from 2004. Staff numbers should plateau, too, easing back from a summit in 2004. Key Note's forecasts are affected by customers' preference for speaking to real people locally, and by the following trends: to relocate centres to low-wage regions (such as India); to automate telephone contacts not requiring human intervention; and to make more efficient use of each workstation. In addition, the national rollout of broadband services by 2005 should raise considerably the proportion of automated contacts via the Internet.

High-added-value services, such as expert advice lines, have a good chance of remaining in the UK. These depend on highly motivated and knowledgeable staff, an increasing number of whom will probably work in dispersed or virtual centres. Staff will devote more effort to retaining existing customers, and will increasingly seek to recreate the friendly ambience of a good local branch.

However, an increasing amount of routine work is expected to be relocated off shore. This trend will build steadily until around 2006/2007, and then develop more rapidly. By 2012, a quarter of all current call-centre jobs in the UK - around 150,000 positions - could relocate to Asia. The main destination is likely to be India, but there will also be expansion in neighbouring countries with considerable English-speaking populations. Relocation saves companies between 40 percent and 60 percent of the costs they incur in the UK.

The trend to locate call centres in India shows that advanced economies cannot automatically rely on services to keep them afloat now that manufacturing has migrated to low-wage nations. Services are also moving to where the costs of acceptable standards of provision are lower. However, the disparity between companies' and customers' perceptions of 'acceptable standards' is an important but unquantifiable factor certain to affect the structure and location of call centres in the coming decade.

Text © 2002 MAPS

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