A question of strategy

ITWeb concluded its call centre/business process outsourcing feature last year by saying: It took India a lot of dedicated, co-ordinated effort, and at least six years, before its market took off.

South Africa needs to learn the same lessons. Only with a focused and strategic plan that involves all stakeholders, driven by one body, will government have a hope of fulfilling its BPO dreams in the timeframes it has outlined.

South Africa still doesn't have a strategic plan, it does not have a unified body driving call centre/BPO growth, and it still has a skills problem. The perception remains that it is an expensive destination telecoms wise, and the bulk of the market doesn't even know that SA plays in this sector. Something must be done. And it's really up to the industry to drive it.

While telecommunications costs are frequently blamed for the local market not taking off, one question has to be asked: how much bandwidth do call centres really need? And how many outbound centres does South Africa have?

Further, Neotel's entrance to the market is already making a substantial difference to costs in the areas it's currently operational. As Orion Telecom MD Jacques du Toit notes: “Until now, we've paid Telkom R3 000 [per month] for a 128k link. Neotel offers a 2MB link for the same price. No one in their right mind is going to stay with Telkom if they can get that amount of bandwidth for the same price. And, of course, this is linear, so if you're talking about a 150MB link, the same thing applies. Neotel is doing a lot to stimulate the market, but its grid is not rolled out completely,” he adds.

The additional three undersea cables currently on the cards will also do a lot to ensure South Africa has reliable, affordable communications with the rest of the world.

SA is almost the industry's best kept secret.

Joe Staples, senior VP for worldwide marketing, Interactive Intelligence

On the other hand, as Stephen Floyd, head of Core Services at Fujitsu Services, notes: “Government's desire for growth needs to become much more tangible, as internationally there is still a view that South Africa is expensive from a telecoms perspective, and this still appears to be a barrier. While the costs of resources are typically 30% to 40% cheaper than the UK and Europe, the perception is that telecoms costs are still too high. Whatever that means - the problem is that perception becomes reality. The challenge in this is that there appears to be little clarity in the industry as to how the cost of telecoms has come down over the past couple of years, how costs currently compare against other global established offshore markets such as India, and where telecoms carriers expect the cost to be over the next 12 months. This is important in forecasting to move international business to South Africa.”

And then there's that other question: does anyone know where South Africa actually is? And that it offers offshore services?

Says Interactive Intelligence senior VP for worldwide marketing Joe Staples: “We don't hear people saying they're not going to SA because of skills. They say they're going to India because they read so much about it and because of the cheap labour, although it's not so cheap anymore. SA is almost the industry's best kept secret. Firms that do find it can utilise the skills, even if there are not many of them. I've never heard any objections to South Africa. The country doesn't get enough publicity. It's still the Philippines and India.”

Aside from a lack of market visibility, South Africa also doesn't seem to have any plans to acquire a clear strategic direction for its call centre/BPO efforts.

As Johann Kunz, MD of Fusion Outsourcing Services, notes: “From a BPO strategy point of view, we need to understand where we want to position SA, ie, do we want to position ourselves as a mass outsourcer like India or do we want to play in a specific niche market? If we don't have that in place, any skills development policy or strategy may be wrong. We may be training low-level skills where we would like to position ourselves at a high level worldwide. The basics need to be in place first before we start the upskilling process. I'm not sure we're clear where we want to position ourselves. I don't think the strategy is in place.”

The problem is that perception becomes reality.

Stephen Floyd, head of Core Services, Fujitsu Services

Says Merchants executive for specialist support Linda Bomyer: “When you look at outsourcing, you need to keep it in context. Why do companies outsource? Because somebody else can do it cheaper than they can and as good as they can, or better. This is already giving us a clue into what we have to do to compete. We need to train and develop people to be as good as elsewhere and be able to [outsource] cheaper. And if you're looking internationally, you need to uplift standards to be equal to overseas standards.”

Consensus is that there are plenty low-level agent skills to be had, and that where shortages exist these are relatively easy to train up.

Says Kunz: “From a skills perspective, we need to separate agent skills from management and team leader skills. From an agent perspective, I believe if we don't go the mass contact centre approach, over time, we will develop sufficient skills.”

According to Andrew Holden, MD of Bytes Outsource Services: “A lot of the skills shortage currently is driven by demand increasing, so we're behind the curve on skills development. There've been quite a few smaller centres [coming into operation], 300 or 400 seaters here and there, and they are all after the same limited skills base. Because the base is limited, it escalates average salaries paid and, as you escalate skills cost, we become less attractive from an offshoring destination point of view.

“The only way to deal with it is learnerships. We run all our learnerships for the year through our call centre base. We're training over 100 learners a year on call centres only. It's a start,” he says.

“There's no quick and easy cure for the shortage, but everyone needs to start at the bottom. Getting new people in, putting them through properly constructed programmes and, in a year or two, filling up the bottom level.”

Says Merchants' Bomyer: “The key to developing skills in SA is not to grab students as they enter or leave tertiary education, but tackling the most basic challenges in education at grassroots level, ie, literacy, life skills and language comprehension, which requires buy-in and formalised participation from the likes of the Department of Education and the Department of Labour.

“There are a plethora of different training programmes and one wonders whether there is sufficient co-ordination of these to deliver the true value that's required by the BPO industry. When we start moving up to more complex environments is where we're going to have to ensure we have enough skill and talent with experience to cope with what potentially comes down to us,” she adds.

“Everyone is talking about team leaders, but who is mentoring, developing and role-modelling them? If we're going to move quickly, then managers also need be developed and mentored into roles. We need to look at how to develop these managers.”

Half of the problem, Kunz notes, is that “call centres/business process outsourcing is not seen as a career in SA. It's seen as a stepping-stone into the workforce, and people are not trained for a long-term career. If you look at team leader and above [positions], that's where the biggest gap is skills wise. Apart from the fact that the industry is very young, we don't have many people coming through the ranks because they don't see BPO as a career.”

Kunz's comment notwithstanding, at least one commentator, who has been in call centres for 20-odd years, says call centres have never been seen as a long-term career, and they are indeed a great stepping-stone into the workplace, or a profession. From a recruitment perspective, this means the call centre is a great place to attract new talent. Attract them, do career-pathing and succession planning, and use their skills throughout the business.

Discovery Health, which has an average of 4% staff turnover across its 800-seat virtual call centre, has adopted just this approach. It starts with recruitment - all potential hires are interviewed by the senior managers they will work for, not by HR. Says Johan van Rooyen, Discovery Health CTO: “Each call centre service executive must choose his or her own team. We also invest heavily in induction and training. At the moment, we have aspirations to be a learning organisation, so learning and the job will be intermeshed. Even induction is simulated - new people take calls made by hired temps from day one.”

All staff hired by the centre understand they get paid on a 'tip system'. “We do 20 surveys per consultant per month, among customers the consultant has spoken to that month. Agents get an incentive based on what clients think,” he says.

Beyond that, the human capital manager is incentivised on the first six weeks' score that new recruits achieve (after six weeks, they leave the HCM's sphere). And the centre service executives are also incentivised on the score their centre achieves, so the company's four regional (physical) centres compete on service levels. Service managers and executives are further rewarded (or not) based on how happy their staff is (or not), also based on regularly conducted surveys.

The company has invested heavily in a learner management system and “encourages people to study in their own time for self-improvement and formal learning”, adds Van Rooyen. “There's a career map on the system, so people can click on the role they want to move into and see which courses to do. We keep it constantly updated, and it lets people grow in the line or in specialisations.”

The company refers to positive or negative attrition when talking about staff turnover. Positive attrition refers to staff moving to sister companies. According to Van Rooyen, approximately 1.3% of consultants move into other roles every month. At present, 95% of the company's corporate health managers (which look after corporate clients) came up through the ranks. “As we are a full service organisation, there are other roles that centre agents are ideally suited for,” Van Rooyen notes.

“Companies should have a clearly defined skills development strategy and get their staff to buy into the culture of the company by mapping out career paths,” says Ocular Technologies MD Pommie Lutchman, who started as a front-line call centre agent 14 years ago and now runs a company consulting to call centres.

“Nowadays, one can even obtain university qualifications in contact centre management, which shows that it's becoming a career instead of just a job. I've realised that companies with defined call centre career paths seem to fare better than those that give staff a call centre qualification and expect them to get on with it. We see people join MultiChoice because they want be a Channel O presenter. For example, they see it as a stepping-stone.

“If companies can drive this, start setting out career paths where someone starts as a consultant, then by way of defined policies moves to supervisor, team leader, manager and so on, then I think we have a better chance of creating a better profile for outsourced centres.

“I've seen it at some of the more prominent centres we work with. Medihelp, for example, which we helped install in 1996, still has 90% of the same people there. Some have moved to management positions, but because the path is defined, people feel they don't need to move away because it's not just a run of the mill sweatshop job - it's a career for them. The opposite end of the scale is Edcon, which recruits 40 to 50 per month, and handpicks its selection, but is a sweatshop. The consultants don't see it as a career and if someone leaves within two months they just replace him.”

While it's easy to dismiss the time zone, language, and cultural affinities SA has to the UK and Europe, these, as Interactive Intelligence's Staples notes, are not easily replicated by destinations that don't have them. South Africa has skills - not enough of them - but it does have them. It has cost advantages. It has people bright enough to work out how to change the game to suit them and benefit the country as a whole. Perhaps it's time the industry, in the absence of government direction or a unifying body, did for itself. It's certainly capable of it.