“The single biggest problem in communication is the illusion that it has taken place.”
– George Bernard Shaw
The issue of digital disruption is currently at the forefront of business discussions across all industries, but is currently arguably most acutely being felt, and feared, in the Contact Centre industry. With Contact Centres at the forefront of both the interface between customers and the organisation and the cutting edge of new technology deployment, the imperative for Contact Centres to adapt to changing customer communication preferences is paramount.
Much, much easier said than done!
New technology development and changing customer attitudes are at the heart of why Contact Centres were first established. It may therefore be worthwhile to briefly look at the evolution of the industry to see if there are lessons to be learned that may help to negotiate the journey into this new digital world.
Background
Contact Centres emerged in the mid to late 1980’s in response to two key business drivers:
- The convergence of traditional telephony with computer technology, and
- The prominence of business management theorists, like Tom Peters, advocating excellent customer relationships as the imperative to sustainable business success.
The technological evolution of the Automatic Call Distributor (ACD) and later the Interactive Voice Response Unit (IVR) provided the opportunity for business to offer clients a quicker and more convenient way of communicating with the organisation to resolve queries and problems.
No more need for visits to physical premises or handwritten letters. Conversely, this enabled businesses to consolidate customer service into a single environment thus reducing the cost of bricks and mortar infrastructure as well as driving efficiencies in headcount costs through skills-based routing of customer interactions. It also held the promise of achieving better customer relationships through personalised conversations between customers and corporate representatives. This apparent win-win solution resulted in widespread adoption of across industry sectors in the 1990’s and into the early 2000’s.
Expectation vs reality
The logic and promise of Contact Centre deployment did not in large part live up to the reality of experience for either customers or businesses. As with any innovation, assumptions made in the planning didn’t manifest in practice. The technology was new, proprietary and expensive to deploy. It was capital intensive and difficult to interface with legacy computer systems. This frequently resulted in the communication systems and the customer database systems being disconnected and undermining the opportunity for a holistic view of the customer that would support informed interaction with Contact Centre representatives and so support improved customer service and relationship building.
While customers readily adopted the new voice channel, they still expected to have the option to use face-to-face channels. This meant that expected efficiencies in cost to serve were not as attractive as expected. It also introduced complexity in the need for consistency of message and approach between different customer service channels. This was exacerbated by the disparity between bureaucratic processes designed where there was time to consider and record as opposed to the quick turnaround expected in a first call resolution telephone conversation.
Efficiency projections were achieved in the reduction of the need for mailrooms. Mailroom activity was largely lifted and dropped into the Contact Centre thus swamping the workload of people originally employed for their skills in problem-solving and relationship building with high volume low complexity transacting. Employee motivation, morale and retention emerged as dominant problems for Contact Centre managers and persist as the primary challenge to Contact Centre operations today.
New technologies
And along came e-mail! Another customer communication channel that almost (but not quite) signed the death knell of the mailroom, but needed to be integrated into the Contact Centre in a cohesive and consistent manner.
With each new communication evolution – e-mail, SMS, Facebook, Twitter – Contact Centres were challenged to integrate and provide service support to the preferred communication channel of the day whilst never eliminating any of the other channels already in use.
Customer satisfaction
The pace of change that has characterised the digital revolution and the speed of customer adoption of new communication channels dictates that priority be given to integrating new technologies in Contact Centre operations.
In many cases this resulted in the original purpose for the establishment of the Contact Centre function (i.e. building sound customer relationships and customer satisfaction) being relegated to the background. This is evidenced in the Ask Africa Orange Index measurement of Customer Satisfaction showing five consistent years of decline in customer satisfaction across industries in South Africa.
This is not a uniquely South African phenomenon as evidenced by Clinton Cohen of iContact who quotes that “According to Forbes Global Media Company, 89% of companies today compete primarily on the basis of customer experience. And while 80% of companies believe they deliver a superior customer experience, only 8% of customers agree.”
This is confirmed by Ureshni Danilala-Morrison of Merchants who quotes a 2019 Dimension Data survey report that “two thirds of respondents agree that good customer experience will increase revenue or profits, and 88% recognise this as a customer differentiator. Despite this, only 10.9% of organisations surveyed have positive customer experience ratings.”
Landscape
As the Contact Centre industry matured the function came under closer scrutiny with a view to improving efficiencies and reducing the cost to serve. Facing a rapid pace of change, the need to adapt to new technologies, changing customer expectations and growing costs as a result of increasing growth and complexity, decision makers faced the challenge of how to contain what had become a major cost centre.
Two major thrusts emerged from this industry growth phase – Contact Centre Outsourcing and the emergence of the Outbound Contact Centre sector.
Contact Centre Outsourcing
This a major component of the global Business Process Outsourcing (BPO) market. Specialist Contact Centre outsourcing companies were established in South Africa from the earliest emergence of the Contact Centre industry, but the South African BPO sector has flourished over the last fifteen years. While estimates vary a 2016 Deloitte report on the BPO Industry in South Africa estimates the South African BPO sector employs upward of 200,000 people and this contributes an estimated 1% to the South African GDP.
The BPO sector has been identified as having significant potential to attract foreign direct investment and the Deloitte report estimates there to be around 30,000 international Contact Centre jobs in South Africa. While most of the public sector support and promotion is targeted at attracting foreign direct investment in the BPO sector, there are a significant number of domestic Contact Centres across industries that are outsourced. This is a sector that is expected to continue to grow in South Africa.
According to Luvendra Naidu at Startek (Aegis Outsourcing South Africa) “The impact that digital technologies are having on the provisioning and delivery of business process services… is reshaping front and back offices”. The rationale of using specialist skills and supporting technology infrastructure rather than undertaking building these internally is likely to be attractive to many South African businesses.
Outbound Contact Centre
Outbound Contact CentreConcurrent with the growth of the Contact Centre BPO sector has been the emergence of the Outbound Contact Centre sector. In countries that had strong direct mail and catalogue sales industries, adoption of Outbound Sales Contact Centres spearheaded the industry growth. In South Africa the Outbound Contact Centre sector emerged sometime after the Customer Service Contact Centre sector out of an initial need to use spare Contact Centre capacity and to migrate the Contact Centre from a cost to a profit centre.
Initially outbound sales and collections activities emerged as specialist business units inside Customer Service Contact Centres, but then grew to become dedicated Contact Centres in their own right. Today Outbound Contact Centres are the most significant growth sector in the industry.
On the face of it Outbound Contact Centres appear simple to establish and run. Realistically, Outbound Contact Centres need their own unique technology infrastructure, well considered operational protocols and quite different skill sets.
Locally
The proliferation of Outbound Sales Contact Centres in South Africa is in some part due to underestimating the complexity of outbound operations management and has resulted in a very negative perception of direct sales calls amongst consumers. Although there are some exceptions, many Outbound Contact Centres have operated in a haphazard way characterised by over-utilisation of customer data lists, inappropriately targeted product offerings, under skilling of Contact Centre representatives, over-selling and in some cases blatant misrepresentation.
According to a 2017 Truecaller Report1, South Africa was the fifth highest outbound contact market in the world. The very emergence of services like Truecaller – that enable individuals to screen and block incoming calls – is an indicator of increasing intolerance for intrusive outbound calling amongst South African consumers. Well planned, well managed, competently staffed and considerately implemented, Outbound Contact Centres have a valuable space to fill, but there is a lot of negative ground to be made up before any mainstream acceptance of these services can be expected from customers.
Regulation
RegulationAs a response in part to perceived abuses and to the dramatic growth of businesses having direct access to individual consumers as a result of the proliferation of personal data, there has been an increase in focus on strengthening the regulatory environment that affect the way Contact Centres operate.
The following legislation is relevant:
- Basic Conditions of Employment Act regulating the use of temporary workers and shift work;
- The Financial Advisory and Intermediary Services Act (FAIS) regulating the certified competence requirements for employees providing financial services and advice;
- Consumer Protection Act regulating fair trading practices and protection from aggressive sales;
- National Debt Collection Act regulating fair debt collection practices;
- The Protection of Personal Information Act (PoPI) regulating the collection, use and storage of personal information.
All these Acts have been promulgated and are currently in effect. Many have also been amended to strengthen aspects of the regulations and most of the Acts include a recommended best practice guide that clarifies the intent of the regulators. Although these regulations apply generically to all South African businesses, there are specific implications in each related to responsible operations of Contact Centres.
The most recently enacted of these Acts is the PoPI Act. Although promulgated some time ago there have been long delays in establishing the regulatory authority and defining the terms of reference for the regulations. A recent Podcast hosted by Ivor Blumenthal of ArkKonsult confirmed that the PoPI Regulation Authority is now up and running and will investigate any complaints received. This is of particular significance to Contact Centres as they are one of the most direct gatherers and users of personal information and therefore a likely focus of compliance auditing.
According to Priyanka Naidoo, Associate, Norton Rose Fulbright, in a January 2020 interview, the Chairperson of the Information Regulator, Pansy Tlaluka, indicated that her office has requested President Ramaphosa to sign the remaining provisions of PoPI into full force by 1 April 2020. These provisions will establish the minimum requirements for lawful processing of personal information with which all private and public persons must comply, as well as the Information Regulator’s enforcement powers.
It is not certain that President Ramaphosa will sign PoPI into full force by 1 April 2020, or at all this year. His office has not made any public announcements to indicate their intentions in this regard. The Information Regulator has recently been engaging with the President to increase her office’s budget to allow it to exercise its powers and duties under PoPI which include monitoring and enforcing compliance, and presumably the commencement date depends on the outcome of these requests.
Once PoPI comes into force, all public and private persons will have one year to comply with the provisions of PoPI, and there can be substantive penalties for non-compliance.
Serious consideration has to be given to the personal information that the organisation processes, and how this creates risk from a reputational and commercial perspective. This can be efficiently managed through a PoPI compliance audit by your internal or external advisors. Such an audit will identify risks or gaps which the organisation may not have been aware of. Awareness of the extent of the risks and the prevention action needed is the first step to identifying appropriate, practical and business suitable steps to mitigate the risks and ensure compliance with PoPI.
Impact of 4IR
The 4th Industrial Revolution (4IR) is well and truly with us – ready or not. It is being rapidly driven by…
The full article is reserved for our subscribers!
Read this feature on CONTACT CENTRES by Margie Middleton, as well as a host of other topical management articles written by professionals, consultants and academics in the February/March 2020 edition of BusinessBrief.
ALREADY SUBSCRIBED?
Questions or problems?
admin@bbrief.co.za | +27 (0)11 788 0880 |
