| MP74093 |
| MAPS : CALL CENTRES : July 2003 |
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This report covers:call centres, VAT harmonisation, EU differences, e-commerce, social factors,the internet, promotional logistics, response handling, India, Asia, The Caribbean and Latin America, pan European,
Companies covered include: BT Group, Cable and Wireless, Convergys, Thus, IMS Group, RSL Com Uk, Acxiom, The Merchants Group, Sitel, UK, 7C, Ant, Marketing, Broadsystem, CPM, United Kingdom, Harte-Hanks CRM Services, UK, INkfish Call Centres, iSKy, Europe, The Listening COmpany,MM Group, The Capita Group, Jarvis, Serco, Group, Ventura Customer Service Management, Vertex Data Science, Blue Pumpkin Software, Nice Systems, Business Systems, Citel Technologies, Concerto Software, Mitel Networks, Cincom SYstems, ClientLogic, DTS Group, Plantronics,
EXECUTIVE SUMMARY
| Over 30% of Europe's call/contact-centre workstations are in the UK. Key Note estimates that in 2003 there are around 385,000 workstations in the UK in call/contact centres of at least ten workstations. However, employment in call/contact centres in the UK is beginning to fall. The operation of virtual centres across national boundaries, full relocation abroad and greater efficiency through management by technology are contributing to a contraction in call/contact-centre employment in the UK. |
| In 2002, staff turnover averaged around 24%. Although staff turnover pushes up starter wage rates, it moderates the overall pay bill, because relatively few staff stay long enough to qualify for the higher salaries based on qualifications and experience. Moreover, turnover helps centre operators to relocate jobs overseas without declaring redundancies, instead relying on natural wastage. |
| India has become a world hub for call/contact centres and other business process outsourcing activities, with over 5% of the global market. Wages in India for customer-service agents are a quarter of those in the UK, but staff have equivalent skills. |
| US companies are choosing to locate call/contact centres in the Caribbean, and Central and Latin America. China is attracting business process outsourcing — for example, from HSBC — and Malaysia, Singapore and the Philippines are also popular centres for call/contact-centre relocation. |
| Consumers in the UK are dangerously overloaded with debt. At the end of Quarter 1 2003, the total amount outstanding by individuals in the UK reached £852.53bn. Consumption is too heavily dependent on a continuing rise in property prices. |
| Government contracts have given a considerable boost to the development of outsourcing call/contact-centre services in the UK. The contact-centre outsourcing market will continue to expand rapidly, creating real opportunities for specialist contractors. |
| The public sector hopes to achieve savings by switching to contact centres serving multiple agencies, in a streamlining process that would reduce employment opportunities. For example, the Government would like to integrate communications to emergency services, such as fire and ambulance, which, although technically straightforward, would result in public-sector job losses. |
| Companies cannot, without great difficulty, build long-term relationships with customers if there are no face-to-face communications. Furthermore, many consumers will continue to insist on speaking to named, preferably local, staff in the organisations they contact. |
TABLE OF CONTENTS
| Executive Summary 7 |
| 1. Introduction 8 |
| THE TOPIC 8 |
| OBJECTIVES 8 |
| METHODOLOGY 8 |
| Original Research 8 |
| Problems in the Research Process 9 |
| DEFINITION 9 |
| 2. Strategic Overview 10 |
| CUSTOMERS OR COST CONTROL? THE COMING CRUNCH 10 |
| Table 1: The Economically Active Population in the UK by Standard Occupational Classification† (%), 1990 and 2000 10 |
| Table 2: Employment in Sales and Customer Service (000), Autumn 2001 to Autumn 2002 12 |
| Table 3: Number of Call/Contact-Centre Workers by Sex, Autumn 2001, Autumn 2002 and Summer 2003 13 |
| SLOW GROWTH IN CALL/CONTACT-CENTRE NUMBERS 13 |
| Table 4: Number of Call/Contact Centres in the UK, 1998-2003 14 |
| Table 5: The Significance of Small Call Centres in the UK (number and %), 2000, 2002 and 2003 14 |
| Table 6: Number of Call Centres in the UK by Workstation Sizeband, 1998, 2000, 2002 and 2003 16 |
| SOUTH EAST HAS MOST CENTRES 16 |
| Table 7: Number of Workstations in Call/Contact Centres in the UK by Region (number and %), 2003 16 |
| Table 8: Cities with the Most Workstations (number and %), 2003 17 |
| ENCOURAGEMENT FOR REMOTE AREAS 18 |
| FINANCIAL SERVICES — THE TOP CATEGORY 19 |
| Table 9: Number of Call/Contact Centres in the UK by Industry Sector and Workstation Sizeband, 2003 20 |
| PUBLIC SECTOR SPURS OUTSOURCING 20 |
| COSTS FREEZE OUT SMALL COMPANIES 21 |
| LEADERS IN CUSTOMER CONTACT 21 |
| KEY POINTS 22 |
| 3. Work in Call and Contact Centres 23 |
| JUMP IN STAFF TURNOVER 23 |
| IDS 2000 23 |
| IDS 2001 23 |
| Call Centre Association 2002 23 |
| IDS 2002 24 |
| SURVEILLANCE AND CONDITIONS ISSUES 24 |
| CAREER SCOPE BEGINS TO GROW 25 |
| TRAINING LADDER EXTENDS 26 |
| WORKSTATION NUMBERS PEAK 27 |
| Table 10: Estimated Number of Workstations in Call/Contact Centres in the UK by Number of Workstations per Call Centre, 2000, 2002 and 2003 28 |
| Table 11: Number of Workstations in UK Call Centres (000), 1998-2003 29 |
| BEYOND AGENT PRODUCTIVITY 29 |
| KEY POINTS 30 |
| 4. The Outsourcing Boom 32 |
| PUBLIC-SECTOR BOOST 32 |
| THE CASE OF NHS DIRECT 32 |
| Table 12: Government Funding for NHS Direct (£m), 2003/2004-2005/2006 33 |
| OUTWARD BOUND 34 |
| RELOCATION, RELOCATION, RELOCATION 35 |
| KEY POINTS 36 |
| 5. Call-Centre Specialists: The Communications Root 37 |
| BT GROUP PLC 37 |
| Company Structure 37 |
| Relocation of Jobs 37 |
| Outsourcing Contracts 38 |
| Profitability 38 |
| CABLE & WIRELESS PLC 39 |
| Company Developments 39 |
| Profitability 39 |
| Table 13: Financial Results for Cable & Wireless PLC (£m, % and £), Years Ending 31st March 1998-2002 40 |
| CONVERGYS CORPORATION 40 |
| Company Structure 40 |
| Company Developments 41 |
| Profitability 41 |
| THUS PLC 41 |
| Company Structure 41 |
| Profitability 42 |
| Table 14: Financial Results for Thus PLC (£000), Years Ending 31st March 2000-2002 42 |
| Table 15: Financial Results for Scottish Power PLC (£000), Years Ending 31st March 2000-2002 43 |
| OTHER COMPANIES 43 |
| IMS Group PLC 43 |
| RSL Com UK Ltd 43 |
| LOOKING FOR LOWER COSTS 44 |
| KEY POINTS 44 |
| 6. Call-Centre Specialists: The Systems and Software Root 45 |
| ACXIOM LTD 45 |
| Company Structure 45 |
| Company Developments 45 |
| Profitability 45 |
| Table 16: Financial Resuts for Acxiom Ltd (£000, % and £), Years Ending 31st March 1998-2002 46 |
| THE MERCHANTS GROUP LTD 47 |
| Company Structure 47 |
| Company Developments 47 |
| Profitability 47 |
| Table 17: Financial Results for The Merchants Group Ltd (£000, % and £), Years Ending 30th September 1998-2002 48 |
| SITEL UK LTD 48 |
| Company Structure 48 |
| Company Developments 49 |
| Profitability 49 |
| Table 18: Financial Results for Sitel UK Ltd (£000, % and £), Years Ending 31st December 1998-2001 49 |
| SUPPLY RATHER THAN OPERATE 50 |
| KEY POINTS 51 |
| 7. Call-Centre Specialists: The Telemarketing Root 52 |
| OUTBOUND IS TOUGH 52 |
| 7C Ltd 52 |
| Profitability 52 |
| Ant Marketing 53 |
| Profitability 53 |
| Broadsystem Ltd 53 |
| Profitability 54 |
| Table 19: Financial Results for Broadsystem Ltd (£000, % and £), Years Ending 30th June 1998-2002 54 |
| Contact 24 55 |
| Profitability 55 |
| CPM United Kingdom Ltd 55 |
| Profitability 56 |
| Table 20: Financial Results for CPM United Kingdom Ltd (£000, % and £), Years Ending 31st December 1997-2001 57 |
| Harte-Hanks CRM Services UK Ltd 57 |
| Profitability 58 |
| Table 21: Financial Results for Harte-Hanks CRM Services UK Ltd (£000, % and £), Years Ending 31st March 1998-2000 and 31st December 2000 and 2001 58 |
| Inkfish Call Centres Ltd 59 |
| Profitability 59 |
| Table 22: Financial Results for Inkfish Call Centres Ltd (£000, % and £), Years Ending 30th June 1999-2002 60 |
| iSky Europe PLC 60 |
| Profitability 61 |
| The Listening Company Ltd 61 |
| Profitability 61 |
| Table 23: Financial Results for The Listening Company Ltd (£000, % and £), Years Ending 31st October 1999-2002 61 |
| MM Group Ltd 62 |
| Profitability 63 |
| Table 24: Financial Results for MM Group Ltd (£000, % and £), Years Ending 30th June 1998-2002 63 |
| MOVING AWAY FROM TELEMARKETING 64 |
| KEY POINTS 65 |
| 8. Call-Centre Specialists: The In-House Root 66 |
| IN-HOUSE GROWING OUTWARDS 66 |
| The Capita Group PLC 66 |
| Profitability 66 |
| Jarvis PLC 66 |
| Profitability 66 |
| Manpower 67 |
| Profitability 67 |
| Serco Group PLC 67 |
| Profitability 67 |
| Ventura Customer Service Management Ltd 68 |
| Profitability 68 |
| Vertex Data Science Ltd 68 |
| Profitability 69 |
| Table 25: Financial Results for Vertex Data Science Ltd (£000, % and £), Years Ending 31st March 1998-2002 69 |
| KEY POINTS 70 |
| 9. Technology: Excellence Versus Obsolescence 71 |
| INTRODUCTION 71 |
| RAPID OBSOLESCENCE 71 |
| MONITORING AGENTS 72 |
| Blue Pumpkin Software UK Ltd 72 |
| Profitability 72 |
| Table 26: Financial Results for Blue Pumpkin Software UK Ltd (£000, % and £), Years Ending 31st December 1999 and 2000 73 |
| Nice Systems 73 |
| Profitability 73 |
| MULTI-CHANNEL INTEGRATORS 74 |
| Business Systems Ltd 74 |
| Profitability 74 |
| Citel Technologies Ltd 74 |
| Profitability 75 |
| Table 27: Financial Results for Citel Technologies Ltd (£000, % and £), Years Ending 31st March 1998-2002 75 |
| Concerto Software? 75 |
| Profitability 76 |
| Mitel Networks 76 |
| SOFTWARE, CONSULTANCY AND HEADPHONES 76 |
| Cincom Systems (UK) Ltd 76 |
| Profitability 77 |
| Table 28: Financial Results for Cincom Systems (UK) Ltd (£000, % and £), Years Ending 30th September 1998-2002 77 |
| ClientLogic (UK) Ltd 77 |
| Profitability 78 |
| Table 29: Financial Results for ClientLogic (UK) Ltd (£000, % and £), Year Ending 31st December 2001† 78 |
| DTS Group Ltd 78 |
| Profitability 78 |
| Plantronics Ltd 79 |
| Profitability 79 |
| Table 30: Financial Results for Plantronics Ltd (£000, % and £), Years Ending 31st March 1998-2002 79 |
| KEY POINTS 80 |
| 10. Promotion and Consulting 81 |
| ACCOUNTANTS LEAD IN CONSULTING 81 |
| MAJOR ROLE FOR ADVANSTAR 82 |
| KEY POINT 82 |
| 11. An International Perspective 83 |
| UK LEADS IN EUROPE 83 |
| Table 31: Estimated Number of Call/Contact Centres in Selected European Countries, 1998-2003 83 |
| INDIA'S SOARING CALL-CENTRE SUCCESS 84 |
| Table 32: Typical Annual Wages for Customer-Service Agents in Selected Countries (£ and %), 2003 85 |
| Who's Who in Indian Call/Contact Centres 86 |
| UK Companies Flock to Subcontinent 86 |
| Savings of 30% to 70% 92 |
| ASIA, THE CARIBBEAN AND LATIN AMERICA 93 |
| QUESTIONS THAT CUSTOMERS MAY ASK 94 |
| KEY POINTS 94 |
| 15. Glossary 95 |
| 16. Further Sources 99 |
| Trade Association 99 |
| General Sources 99 |
| Bonnier Information Sources 99 |
| Government and Official Sources 100 |
| Other Sources 101 |
Text © 2004 Key Note
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Last updated by Amanda Porteous November 2004
