Devoted to the call center industry, the agents on the phones, and their managers

Have you ever played in the ocean and went bogie boarding, body surfing or surfing?

Having spent many a summer on the beach in Southern California and having lived in Hawaii, I learned that waves come in sets.  There might be 5, 6 or 7 waves in each set.  I also learned to time my acceleration just at the right time to be able to catch the wave.  I got so I could feel the wave - feel the tug of the water as it was building.

I have since learned that business has waves and they often come in sets.  I feel that I caught a wave in the call center industry.  When I started, it was easy to grow.  The industry was growing 50% a year and it was easy to grow at least that much.  We caught the wave and it carried us far.

What I also learned was  that waves can crest.

While we were riding the wave, we couldn't grow fast enough.  We had more work than we could handle.  So we chose to go into "growth mode".  Growth mode meant that we were building out extra capacity with extra seats, extra computer sets, extra space, and that we were building out our extra middle management. 

Not having built a business before, I failed to see the signs that the wave was cresting.  I think there were several factors that lead to the slowing of the call center industry growth within the US.

1. The big boys going public - When a lot of the big call centers went public in the mid to late 90s, they generated a lot of cash, which they put into extra capacity.  Everyone was feeling the crunch of extra work and not enough space.  If you could build or acquire fast enough, you could secure these big multi-million dollar contracts.

2. The death of the Telcom wars - Much of the call center growth in the late 80s and 90s was fueled by the growth of the telcom wars that happened after deregulation.  Sprint, MCI, and AT& T battled it out for market share and all gave tons of work to the call center industry.  When the telecommunications industry collapsed, it left tremendous extra capacity.

e 3. The emergence of Off Shore call centers. It finally became viable to hire agents  in India or the Philippines and take advantage of the labor arbitrage.  That began to siphon work away from the US call centers.

Well, I didn't recognize these trends and the impact they would have on the industry.  We continued in the "growth mode", adding more capacity, hiring more middle managers, etc.  We should have gone into "optimization mode", figuring out how to provide more value added services and move up the value chain with our existing customers, figuring out how to provide better and better service, so they wouldn't have wanted to move their work overseas, because we provided such good value to them.

Today I saw a post from the Philippines with a prophetic warning.  He is encouraging the Philippines to take this time, while they are riding a big wave, to prepare for the next wave in the set and not just ride this one all the way into shore.  Eventually this call center wave will crest.  Some call centers who have established strong relationships and strong niches will do fine, but there will be a lot of call centers who will be washed away and have to shut their doors.

If the Philippines  learn from the lessons from the US, they will find that there will be at some point, there will be too much capacity, that clients will have cheaper options, and that there will be a commoditization of the product and margins will be squeezed and lowered.  How will you then compete?

Jobert sounds the clarion call that I hope someone in the Philippines is listening to:

 We are just milking the call center phenomenon for what it's worth without thinking of the future. For us to be at the forefront, we should be at least one step ahead or alongside the others.

And honestly, I don't think our government can truly be of assistance. It's up to the private sector to have the common sense, the vision, and the drive to move forward