In the Global Village, does geography still matter?

Saying that we’re living in a global village or a virtual world is stating the obvious.

September 12, 2012

By Bruce von Maltitz, director of 1Stream

Saying that we’re living in a global village or a virtual world is stating the obvious. Video calling, high-speed Internet, social media and teleconferencing have given us the ability to instantly connect, regardless of our location. Nowhere is this more obviously demonstrated than in the realm of call centres where customers in countries such as the UK and US regularly interact with support services in the Philippines, India and of course, South Africa.

For the most part, this system has worked well. Research has shown that most people don’t care where their call centres are based – as long as they can deliver adequate support – and companies have cut their labour and real estate costs dramatically. As Martin Conboy, editor of the Sauce (an outsourcing news service in Australia) puts it: “If companies can access talented and less expensive labor in somewhere like the Philippines, why would a business pay more for the same thing in their own country?”

But lately there seems to be a backlash. In his state of the Union address earlier this year, US President Barack Obama urged American businesses to bring jobs to back to the US and eliminated tax breaks for companies that outsource. Last year, Spanish-owned bank Santander withdrew their centres from India and returned them to the UK citing “customer frustration with geographically and culturally distant call centre operatives”. They weren’t the only ones. BT, Powergen and New Call Telecom followed suit, as did several American credit card companies.

Ostentatiously, the groups have cited the inability to relate to customers as the reason for the withdrawal. In fact, a rather bold article by the Washington Post has claimed that India is rapidly losing their claim as the call centre capital of the world to the Philippines, because Philippine culture more closely represents that of the United States. But does the ability to discuss soap operas or the weather really impact your customer service experience? Geography, in my opinion, was not the problem (albeit a convenient excuse) in the examples above. Dig a little deeper and I expect you’ll find that less time and money was spent on training and managing staff than prudent.

Virtualisation and Call centres

Cloud based technology has many benefits, such as the economies of scale, mitigation of hardware failure and access to accurate information on demand. It also allows companies the ability to set up a call centre anywhere in the world, across different time zones, which may result in improved continuity of business.

Well-trained call centre agents are continuously educated and trained on new and existing products and services, and are able to provide detailed information that enables them to troubleshoot a wide range of inquiries. They are also equipped to handle queries particular to the region they are serving, such as pricing queries or rate plans, despite being limited to that geographic area.

If queries are resolved promptly and efficiently, does the customer really care where the call centre is based? I doubt it.

At the end of the day, customers want the same thing from their call centres: clear lines of communication, good customer service and after-sales care if needed. Whether the individual speaks in an accent or not is irrelevant – as long as they can be easily and clearly understood.

The reality is that offshore hubs such as India, the Philippines – and South Africa – are not going out of business any time soon, as long as they can offer cheaper and more efficient call centres and refuse to compromise on quality. The BPO boom in India can be attributed to cheap labor costs and the country’s pool of skilled, English-speaking professionals – both factors that can be found in abundance in South Africa. And considering, from an economic viewpoint, that the call centres outsourced to India alone has created 800 000 jobs, we should make a point of competing for a spot in that market.
We’re not limited by our location anymore and customers realise that. They care about your level of service and the efficiency of your staff. If you can manage that, you will succeed – no matter where your call centre is located.