What is a call center



Call center is also referred to as 'Contact Center' in current days. The name had been changed due to the stigma attached to the word 'call center'. Until few years back, call center was referred to place where only the people with no skill go to work. All you needed was English speaking skill and the rest would be taught to you in training. Not anymore, contact centers has developed into a industry which now even contributes to the GDP of a many country especially countries like India and China. Besides creating jobs for million of people across the globe. Professional like MBA, Computer engineers, doctors, lawyers, teachers are also opting for this profession. In fact it is said that every individual should work in a call center for at least 1 year of their life. This will teach you things that are never taught in school and universities. Things like handling people, how to talk and convince people, handling difficult situations, sympathizing with people, understanding people. These are all the qualities that are needed in our daily life, do you agree?

The first thing that comes to the mind when we talk about call center is a place where hundreds of people are seated in a room with telephones in their hand and chatting away with their customers. Well, it's true. But this is not the only thing that is done here. Let me explain. I would define call center as a place where customers interact with company representative. This can be in various ways i.e either the customer calls the company or the company calls the customer. The purpose may differ. Example, a company representative calls a customer to inform him that he has missed payment on his credit card bill. A customer may approach a call center to find out why the item ordered by him has not yet arrived.

The different ways in which a call center communicated with its customer are:-


1. Inbound call center (ACD)

This is a type of call center where the customer dials in to find out something. Example, John is a customer of xyz credit card company. He has not received the bill for the current month. He is calling in to find out the total amount he owes the company. The representative who pickup Johns call, informs him of his balance, apologizes for the delay in sending him his credit card bill and promises send the bill immediately. Here John is the customer who has called a toll free number of customer care and is transferred to the next available agent, who services his request. This type of call center is also referred to as ACD (Automatic call distribution). How does this works. When a customer dials the toll free number, the call is sent to telephony provider (AT&T, MCI, Reliance, TATA). The telephony provider sends the call to a equipment called 'ACD', which is situated in the companies premises. This is an intelligent device. The first thing this device does is plays an automated greeting message "Thank you for calling xyz company, your call is important to us, please stay on the line and a representative will be with you shortly". The equipment puts your call on hold (at this time you will hear music), now the equipment starts to look out for available agent. If there is an available agent, the call is send to him. If not, the call is placed in queue waiting for any agent to be available. This process is called 'Queuing'. While in the queue you may hear another message, which will sound something like this "your call is important to us, please do not hang-up, we will be with you as soon as possible". After the agent is completes the call, the call is hung-up either by the customer or the agent. This completes one cycle for single call and now the can make himself available to take the next call. On an average an agent take about 100 calls in a day.


2. Outbound call center (AOD)


This is a type of call center where the company dials its customer or a prospective customer. Example Company xyz has lauched a special promotion where its offering 50% discount on purchase of any of its electronic items for a limited day. The company would like to inform all its existing customers of this offer. The company has around 200,000 customers. The company has now given this job to its call center. The call center assign 100 agents for this job. The agent start dialing all the customers informing this of this great offer. After 1 week of dialing all the customers have been contacted and following is the result.


10% of the customers came to the showroom and purchased the product.
60% of the customer showed no interest in the offer.
10% of the customer did not pick up the phone.
10% of the customer numbers were bad numbers.
10% of the customer asked to put their number of the 'Do not call list' and not to call again.

 In this example you have seen that 20% of the customer got converted to a sale and that was what the company was targeting.




Typically there are 2 types of calling that is done here.


a) Sales calling  – Almost everyone in this world have been receiving calls from company where representatives try to convince you to buy their product.  These calls are made from sales call center. As I have shown in the example above, here the law of average is at work. If you dial 100 people, you will be able to speak to only 40, out of this 20 will be interested and only 10 people will actually buy you goods or services. And this is actually what the companies are targeting for. They are not expecting all the dials made to be converted to sale. Only small percentage converted over a large volume of people is also profitable to them. As you seen in the above case. 200,000 people were contacted and only 20,000 customers (20%) actually purchased the product. Now what do you think, was the company foolish or smart in making those calls? Of course they were smart and this has made them big money. They will continue to run such campaigns. So now when you get a sales call and you say 'no' for the offer, remember someone will say 'yes' however foolish the offers sounds. LAW of AVERAGE always works, weather you are selling mud or Mercedes.
b) Collections – It's not very uncommon to see that people do not make their payments in time. There may be many reasons for this. May be genuinely forgot, no money in bank to make payment, did not receive bill, out of town etc. Whatever be the reason, the fact is that the company has not received its money. This may be for a credit card, Home loan, Personal loan, car loan etc. This money needs to be recovered by the company, in order that their business functions smoothly. In this type of contact center, the company pulls out the list of all the customers who have defaulted on their payment and starts dialing them. The reason for default is noted and customer is asked to make the payment. Some companies would want that their customer would default on the payment, so that they can add penalties to the existing outstanding. This ultimately adds to the income of the company. So remember to pay your bills on time and avoid additional charges to your bill.




3. Email call center


These types of call center are both for receiving and sending emails. You would have seen email address of customer care or sale department published on websites, brochures, advertisements etc. A customer would send a email to this email address (example – info@xyz.com). This email is received by one of the agent in the email contact center. This agent reviews the information and replies back to the customer. Here the agent is not directly interacting with the customer and there is a delay in response, hence is not a preferred way of communication. The advantage is that here everything is in black and white and minute details like account number, customer ID, account balance etc can be communicated back and forth in an accurate way. The expected reply time you can expect in this communication mode is usually 2 working days.


4.  Chat call center


This type of call center is similar to a voice call center. The only difference is that in a voice call center, the communication is verbal over the phone, where as in a Chat call center the communication is in text. In both the cases the communication is instant. When you browse the internet, you would have notices that some websites have icons that says something like this "Chat now with our sale representative" When you click on this icon you are connected to a person on the other side that is chatting with you in text. This type of call centers are becoming more common as it gives the customer the flexibility to contact the company from with the website, without having to make a phone call.


5.  Self Service (IVR) call center


Interactive voice response is a service where in you are greeted and responded by an automated system (without human person). You may have noticed when you dial your bank, you are asked various options. For example for English press '1' for Spanish press '2'. After selecting the option the automated system ask you for your account Id and pass code. Once you have successfully got authenticated, it stats giving you information as requested by you, for example last 5 transaction details. The IVR will guide you through the various menu options, using the keypad on your phone. Now days, the automatic system can recognize voice and you can speak into your phone for selecting options instead of pushing buttons on the keypad. This technology is called TTS (text to speech) or voice recognition.


6.  Blend call center
As the name suggests, in these types of call centers the agents are expected to be doing multitasking. This means that a single agent will be doing more than one activity. Example – John is an agent and he takes both inbound and outbound calls. At the same time his is also expected to respond to customer emails as they come. Along with John other agents in his group are also expected to do the same task. John and his team are working in a call center in Blend mode.

Acronyms and Abbreviations

ACD - Automatic Call Distribution

AOD - Automatic Outbound Dialing

ACS - Automatic Call Sequencer

ACW - After Call Work

AHT - Average Handling Time

ANI - Automatic Number Identification

ARS - Automatic Route Selection

ARU - Audio Response Unit

ASA - Average Speed of Answer

ASP -Application Service Provider

ASR - Automatic Speech Recognition

ATA - Average Time to Abandonment

ATB - All Trunks Busy

AWT - Average Work Time

BOC - Bell Operating Company

BRI - Basic Rate Interface

CBT - Computer Based training

CCR - Customer Controlled Routing

CCS - Centum Call Seconds

CED - Caller Entered Digits

CIM - Customer Interaction Management

CIO - Chief Information Officer

CIS - Customer Information System

CMS - Call Management System

CO - Central office

CPE - Customer Premises Equipment

CRM - Customer Relationship management

CSR - Customer Service Representative

CTD - Cumulative Trauma Disorder

CTI - Computer Telephony Integration

DDD - Direct Distance Dialing

DID - Direct Inward Dialing

DN - Dialed Number

DNIS - Dialed Number Identification Service

DSL - Digital Subscriber Line

DTMF - Dual Tome Multi frequency

ERMS - Email Response Management System

ERP - Enterprise Resource Planning

EWT - Expected Wait Time

FCC - Federal Communication Commission

FCR - First Call Resolution

FTE - Full Time Equivalent

FX - Foreign Exchange Line

GOS - Grade of Service

GUI - Graphical User Interface

HTML - Hyper Text Markup Language

HTTP - Hyper Text Transport Protocol

ILEC - Incumbent Local Exchange Carrier

IM - Instant Messaging

IP - Internet Protocol

IRR - Internal Rate of Return

IS - Information Systems

ISDN - Integrated Service Digital Network

ISP - Internet Service Provider

IT - Information Technology

IVR - Interactive Voice Response

IWR - Interactive Web Response

IXC - Inter Exchange Carrier

KB - Knowledge Base

KPI - Key Performance Indicator

LAN - Local Area Network

LCD - Liquid Crystal Display

LEC - Local Exchange Carrier

LED - Light Emitting Diode

LWOP - Leave Without Pay

MAC - Moves, Adds and Changes

MIS - Management Information System

MTBF - Mean time Between Failure

NCC - Network Control Center

NIC - Network Interface Card

NPA - Numbering Plan Area

NPV - Net Present Value

OCR - Optical Character Recognition

OJT - On the Job Training

PABX - Private Automatic Branch Exchange

PBX - Private Branch Exchange

PC - Personal Computer

PCP - Post Call Processing

PDA - Personal Digital Assistance

PRI - Primary Rate Interface

PSN - Public Switched Network

PUC - Public Utility Commission

RAN - Recorded Announcement

RBOC - Regional Bell Operating Company

RFI - Request for Information

RFP - Request for Proposal

RFQ - Request for Quote

ROA -Return on Assets

ROI - Return on Investment

ROS - Return on Sales

RSF - Rostered Staff Factor

SBR - Skills Based Routing

SLA - Service Level Agreement

SS7 - Signaling System 7

TBT - Technology Based Training

TCPIP - Transmission Control Protocol Internet Protocol

TSF - Telephone Service Factor

TSR - Telephone Sales or Service Representative

TTS - Text to Speech

UCD - Uniform Call Distribution

URL - Uniform Resource Locator

VDT - Video Display Terminal

VOIP - Voice over Internet Protocol

VPN - Virtual Private Network

VRU - Voice Response Unit

VXML - Voice Extensible Markup Language

WAN - Wide Area Network

WAP - Wireless Application Protocol

WATS - Wide Area Telecommunication Service

WFMS - Workforce Management System

WWW - World Wide Web

XML - Extensible Markup Language

Banking

Call Center for a Bank is an very integral point of contact for a customer. With the advancement of banking industry, customer satisfaction is no longer a factor that helps banks get more customer or retain existing customer. There are many factors other than customer satisfaction that needs to be in place for customer to continue to do business with a bank. There is a wide choice of bank for a consumer. What is it that makes customer want to select a particular bank is a debate that is currently on in the Banking domain. Basically there are 2 factors that Banks concertrate on to increase their business.

  1. How to retain existing customer ? - Statistics show that customer will not be loyal to a bank for ever. They will change their bank for reasons as mentioned below. How to retain the existing customer base at the same time adding new customer is a challenge banks need to keep dealing with.
  2. How to get new customers ? - Getting new customer is equally important from retaining new customers. This is the only way balance can be achieved. It is very difficult to get new customer as there is a  wide choice of banks available today.

Ways for retaining & adding new customers.
  1. Provide new offers and attractive schemes.
  2. Provide personalised service to customers.
  3. Penetrate deeper in the market both Rural and Urban.
  4. Opening new branches.
Today customer satisfaction is also known as customer delight. Whatever may be the name, the fact is, customer expect this to be basic requirement to bank with a particular bank. Customers are now looking for not just customer satisfaction, but also for personalised touch. Gone are the days, where you would stand in the queue for depositing a cheque or withdrawing cash. Now automated service like an ATM can do this. Although the innovation of ATM has revolutionized the way you deposit or withdraw money, it has one negative impact. It has cause the banker to loose personalised touch with the customer.

Now banks are working on a concept called 'HNI' (High network individual) or 'RM' (Relationship manager).  Its intention is to pick and choose all the customers who are doing good business for the bank and providing them with personalised touch. So now a customer feels important because he has a name of an individual (RM) who will service his specific needs. He does not need to call an automated system (IVR) and get to a customer service representative who will help him. He can directly call his RM and get his issue resolved. An RM will also proactively call the customer to inform him of any issue with his account. This makes the customer feel important and wants to continue to stay with the bank.

Why do customers decide to discontinue doing business with Bank.
  1. No personalised touch.
  2. Calling into the call center is frustrating as the IVR (Interactive voice responses) is very confusing & time consuming.
  3. No one was able to resolve his issue as there is no single point of ownership for him.
  4. Very difficult to reach a call center Representative and have to wait for long time in queue.
  5. Dispute on extra charges levied by bank.
  6. Repeated interaction with bank, but NO resolution.

Call Center Jobs

Call center is a booming industry especially in countries like India, Philippines, China etc. Millions of people are being employed in this industries every year. Many individuals have made a career out of this profession. There are individuals who are earning big salaries even as a Agent. Its weird but a fresher joining a call center as a agent would probably make more money than a Fresher Engineer. Being an agent is not the only job in a call center. There are various job roles that you could aim for in a call center.


Agent - This is the most common job opportunity you could have in a call center. An agent is a person who man's the phone. Calls coming in to the call center are attended by this individual. He speaks to the customer and understands his need, he then provided the relevant information/service to the caller on the phone. Practically speaking you dont really needs any qualifications certificate for working in a call center as an agent. You probably need to be a graduate with a good communication skill (You will also be trained on soft skills, call handling etc).


Team Leader (TL) - A team leader is basically a supervisor for a group of agent. He is responsible for a set of agent. Typically there is 1 TL for 10 agents, but this number may vary depending on the type of call center. A Team leader is responsible to manage his set of agents and make sure that the agents in his team get all that is needed to perform optimally in the the calls they are taking. Team lead is also responsible to arrange for team meetings, pep talks, manage escallations of calls etc. A little bit of managerial experience will help in this role, but typically an agent is promoted to the role of a Team leave based on his experiance and tenure in the company.


Group Leader (GL) - A group leader manages a set of TL's. Typically 10 TL's would report to a GL. The group leader is responsible to provide guidance and assisstance to TL's so that they are able to achieve  the targets/company goals. Targets could mean Right party contact, Customer satisfaction percentage, Sales percentage, collection amount etc. Person having suffient experience as a TL may qualify for the post of a GL.


Quality Analyst (QA) - An QA is a person who is responsible to maintain quality of customer interaction. His job is to listen to call between agent and customer and analyse if the interaction was good, average or bad. Based on the analysis he would then coach the Agent and provide him review and guidance on how to improve. 


Call center manager (CCM)- This person is responsible for over all target achivement of the contact center. All the GL's report to Call center manager. This role would involve viewing daily, weekly, monthly, quaterly, half yearly, yearly performace of the call center with respect to the goals of the company. Call center manager would be responsible for a particular division/product of the company. Example one CCM is reponsible for the Credit card division of the compnay while antother CCM would be responsible for Mortgage loans.


Center Head - A Center Head is responsible for the over performace and management of call center as a whole. This would involve all the process/projects within the company call center. Example a finance company has many division like Credit card, Mortgage, Home Loan, Personal Loan. All of these fall in the perview of a Center Head.

Best Time to Call (Dialer)


What is 'Best time to call' (BTTC) and why is it needed in a call center?








BTTC is a performance most of the Collection contact center would want to achieve. This simply means, when is the best time of the day to call, to be able to reach a 'Right Party contact'? The aim of all the contact centers is to call the right person. If the right person is contacted, there is a high possibility that he will make the payment. If a wrong contact is contacted, the chances of getting the payment are very low. Example – ABC Company is calling Mr. Tom to remind him of his payment on the Credit card. Incase Tom receives the call, the chances of him making the payment is high. If his brother or any family member takes the call, all they will do is take a message for Tom. So my goal as a contact center manager is to get the right person (Right party contact) at the right time (BTTC).

The concept of BTTC is applicable to Outbound dialing only (AOD). In case I do not get the right party, I would need to call him again and again, until I get him on the phone. I want to avoid this and make sure that whenever I make the call, I get the correct person on the Phone. Another thing to remember is that this is a contact center, so it's not just few customers/prospect to call, its tons of them.


How do I set my best time to call logic?

There are ready made software's available in the market provided by vendors such as Avaya, Aspect, Nortel etc. But these are expensive solution and claim to increase the performance by 25 to 30%. Do you need to purchase these software's? Probably not, If you have a good logic written to achieve this yourself. I know of many contact centers that are excelling in this, without using software's available in the market. The way you will do this is by looking at the history of a particular contact. I would suggest using at least 90days (3months) of historical data. Try to embed the below in your logic to determine BTTC. You can do this by importing this data in a database and running stored procedures or any other interface to get this data. Alternatively you can also use tools as simple as excel.
  1. In my working hour (probably 8am to 10pm) how many times the contact/customer was dialed. From these, what time did I get a 'Right Party contact' (RPC) and when did I get 'Wrong party contact' (WPC).
  2. Now select all the times when RPC was made.
  3. Compare the RPC with the various days in the week, month, year etc.
  4. Using point 3 above, categorize the records to be called as BTTC in your calling table.
  5. Set schedules, either manual or through a predictive dialer and dial those records in that BTTC hour only.
  6. Reanalyze the logic for the next day dialing. This is a ongoing process.
Advantages of using BTTC

  1. Lower cost – You need to dial less which means you are paying less to the telecom company. Also you don't need as many agents.
  2. Get more for less – Now that you are calling the right person at the right time, your collections and performance will increase.
  3. Customer Satisfaction – Customer will appreciate you calling them at times when they are relaxed and better frame of mind.

Call centers in India

India has always been a preferred location for setting up a outsourced call center. The reasons for this are many. Compared to other outsourced destination like Philippines, China, Malaysia; India has a wide population of educated people speaking English. Although Hindi is the National language of India, many people especially the ones staying in major cities like Bangalore, Mumbai, Chennai, Delhi, Calcutta etc speak English. In fact offices and companies in India use English as the language of communication both written and spoken. This brings a major advantage to India. Besides this other factors like cheap and professional labor, low infrastructure cost etc makes India a preferred location for outsourcing contact centers from countries like U.S, Canada, U.K etc.

Main reasons for contact center growth in India.
  1. English advantage

    Without this advantage, countries like U.S, Canada, U.K would have never thought of coming to India to setup their contact centers or to outsource their operations to India. Indian's speak English with perfect grammar and pronunciations. The English in India carries a flat accent, this makes it easy for other country citizens to communicate with call center representatives. Indian are in almost all industries round the world, so many times the individual speaking to an Indian, sitting in India call center does not realize that the call has landed to India. This is a great advantage. Some contact centers running operations in India have asked agents to use English names instead of Indian names. Example Swati becomes Suzanne and Sanjay becomes Steve.

  2. Low cost 

    Setting up a call center would involve many factors as you may have seen in my previous articles. The major cost in a call center is labor. An average agent in U.S would be paid a monthly salary of 4,000 US dollars plus other company benefits. On the other hand an agent in India gets paid Rs.15,000 equal to  350 US dollars. Multiply this with the number of agents in a call center and you will be amazed with the figure. A call center with 1000 agents in the U.S would cost yearly expense of 50,000,000 USD. Same job outsourced to India will cost 4,200,000 USD. A saving of 45,800,000 USD per year. This is huge saving for companies, which translates to profit.

  3. Low infrastructure cost

    India is a country with vast population and large landscapes. The cost of infrastructure is not as high when compared to countries in Europe and America. Besides this, India has a huge manpower of IT professional. Setting up a contact center here is cheap and easy. Besides companies like VSNL, TATA provide under cable links (IPLC) connecting Asia continent with America and U.K. This makes it easy to establish voice networks. India is far more advanced and growing to become super power of the world. Some people still think India is a country of snake charmers and have elephants walking on the road. This is far from the truth. 

  4. Government Support

    Over the last 7 to 10 years the growth in contact center in India has been due to the support from Indian Government. Rules like STPI allows call centers to import good technology without paying import duties. Other benefits in taxes etc. help contact centers in India to be more government friendly for companies from out of India, to come and setup their operation here or to outsource their operations to an Indian company.



  5. Professional workforce

    Compared to a call center outside India, the call centers here employ workforce that are well educated and treat this job as a full time job. Unlike U.S and U.K where call center job is considered to be a part time job.

    Due to the boom in international call centers in India, domestic contact centers have started understanding the benefits a call center brings to their business and hence are concentrating more on this component of their business. In recent years Domestic call centers in India are increasing on a fast pace hence providing job opportunities to millions of non English speaking Indians. These contact centers are run using local languages. There are total of 1,576 languages spoken in India (1991 census). Out of these 22 languages have been given official status by the Government of India.

BPO terms

AO
Application Outsourcing


ASP
Application Service Provider


Basel II -  


New capital accord that has already been agreed to by most modern countries.  It will be a compliance requirement for most financial services players in 2005.  It's a complex, massive change to capital adequacy requirements that are enforced by the central banks of about 110 countries. 

The most important aspect is the new requirement that capital adequacy be at least partially tied to some of the most basic operational risks inherent to the company’s business.

This new accord will strengthen the market request for true strategic outsourcing to avoid major investments where possible. (See also Comprehensive BPO)


BPO

Business Process Outsourcing
Contracting with an external organization to take primary responsibility for providing a business process or function.
BPO goes further than infrastructure or even workforce.  The outsourcing provider takes primary responsibility for ensuring that the process works, interfaces effectively with other company functions, and delivers the outcomes intended.



BPR

Business Process Redesign is "the analysis and design of workflows and processes within and between organizations" (Davenport & Short 1990). 
Teng et al. (1994) define business process redesign as "the critical analysis and radical redesign of existing business processes to achieve breakthrough improvements in performance measures."



Business Process

Davenport & Short (1990) define business process as "a set if logically related tasks performed to achieve a defined business outcome."  A process is "a structured, measured set of activities designed to produce a specified output for a particular customer or market.  It implies a strong emphasis on how work is done within an organization" (Davenport 1993).  In their view processes have two important characteristics: (i) they have customers (internal or external), (ii) they cross organizational boundaries, i.e. they occur across or between organizational subunits.  One technique for identifying business processes in an organization is the value chain method proposed by Porter and Millar (1985). 
Processes are generally identified in terms of beginning and end points, interfaces, and organization units involved, particularly the customer unit.  High Impact processes should have process owners. Examples of processes include: developing a new product, ordering goods from a supplier, creating a marketing plan, processing and paying an insurance claim, etc.


Processes may be defined based on three dimensions (Davenport & Short 1990):
        Entities: processes take place between organizational entities.  They could be interorganizational, interfunctional or interpersonal.
        Objects: processes result in manipulation of objects.  These objects could be physical or informational.
     Activities: processes could involve two types of activities: managerial (e.g. develop a budget) and operational (e.g. fill Out a customer order). 





Business Transformation Outsourcing
In business transformation outsourcing companies look for outsourcing partners not only for running their business processes, but transforming them to unlock hidden business value and deliver transformational change.


Collaborative Outsourcing
Collaborative outsourcing involves a cooperative, flexible relationship with the outsourcing provider offering a broader scope of services.  The company and its partner frequently define these services jointly.  The company may or may not transfer people and assets to the provider.



Comprehensive BPO

Comprehensive BPO providers handle almost all the transactional and administrative processes in a function, or even several functions, such as Marketing, Sales and Customer Contact. Comprehensive BPO prefers global deals, which are typically 7-10 years in length, and are generally over $100 million a year.  These providers will buy client assets and will take on hundreds and sometimes thousands of client staff.

Comprehensive providers strive to make interrelated processes more effective, so they aim to reduce the total cost of a function by introducing best practices – such as requiring direct deposit in an OB sales or increasing the customer retention ratio from 1:50 to 1:10.  They are accountable for cost savings as well as outcomes for an entire function, so clients pay for outcomes, not inputs (as they have traditionally in outsourcing).

Comprehensive providers shoulder 70 percent of the operational risk of the in scope processes because they are responsible for the information technology, transactions, and administrative elements of those processes.  Furthermore, they invest significant amounts of capital in the relationship, and they absorb most client personnel (GMAC example).

Conventional Outsourcing
Conventional outsourcing entails using a niche provider to provide a narrow scope of services through a contractual relationship.  Most frequently companies use the provider’s processes to minimize costs.  They may or may not transfer people and assets to the provider (Telemarketing for example).

Convergence

Supermarket effect of aggregating multiple products and services in a single brand to grab a greater share of the consumer's wallet. 
Most of today's companies even have metrics to measure how well they are doing at grabbing that share of wallet with their converged business models. 
This whole concept has developed from use in the finance industry so that retailers, manufacturers and technology companies are thinking like bankers. Today, it would be difficult to deny the fact that the car people (GMAC), the refrigerator people (GE Capital) and Credit Card people (AMEX) have become three of the largest financial services players in the world. Financial Services will grow in meaning for BPO providers.

CPI
Continuous Process Improvement

Effectiveness

The degree to which the features and capabilities of a certain system or process meet the user's needs.
Effectiveness is about how well an “intervention” is achieving its desired aims.  In practice there are many different outputs that can be used to measure this:
        Process indicators: describing the extent of different forms of activity, and their coverage.
        Outcome indicators: describing how an intervention may change activities.
        Impact indicators: describing the impact of an intervention on activities.
Often there are many methodological challenges associated with compiling such indicators, and assessing what may be attributable to one or more forms of intervention activity.  In general, process indicators are the easiest of the three to monitor and compile over time, and impact indicators are the most difficult to estimate.
The quality of being effective: having the power to produce an effect or effects, producing a decided or decisive effect.  Something can be described as effective if it produces the results that it was intended to.  A person can also be described as effective if they are skilled in a particular way.

Efficiency

The degree to which a system or process performs its designated functions with minimum consumption of resources.

Obtaining the most possible satisfaction from a given amount of resources.  Efficiency for our economy is achieved when we can not increase our satisfaction of wants and needs by producing more of one good and less of another.  This is one of the five economic goals, specifically one of the two micro goals (the other being equity).

The state of resource allocation that exists when the highest level of consumer satisfaction is achieved from the available resources.  In particular, this feat is accomplished when the price buyers are willing and able to pay for a good - based on the satisfaction obtained - is equal to the price sellers need to charge for a good - based on the opportunity cost of production.  In other words, the value (satisfaction) of some thing given up to get a good is the same as the value (satisfaction) of the good produced.  Satisfaction won't increase by producing more of either.

The quality of being efficient: working or operating quickly and effectively in an organized way.

ERP
Enterprise Resource Planning

Extended Enterprise
Concept that a company is made up not just of its employees, its board members, and executives, but also its business partners, its suppliers, and its customers (GM example).

Globalization
The elimination of geographic boundaries. 
Today's market is much less willing to accept a multinational business model.  Instead, the market is becoming much more demanding of a truly global business model - where resources and competencies are deployed without the traditional boundaries of geography, language, currency, culture or even time.
Additional dimensions of globalization are taking their place in the business agenda.  Having a global view of the customer, understanding virtually all dimensions of the relationship that consumer has with the company, has become paramount to the most strategic plans of virtually every major company in the marketplace.
SITELs business model “Think global – Act local” with decentralized Bus and a global umbrella of SWW functions and worldwide standards and best practises enables to deliver truly global services in this new business environment.

Industry Volatility
Regardless of a business' industry or geographic location, challenges are compounded by the fact that they are ongoing, unpredictable, and often unmanageable, making the overall business climate volatile and the need for adaptability paramount.

Informationalization
Companies need to get the right information to the right people at the right time in the right place and right format - so that it becomes value for the respective stakeholders.

ITO
Information Technology Outsourcing

Mass Customization
The final business trend that challenges services today.  Virtually every developed country in the world is awash in choices.  Never before have consumers had such a dizzying choice of virtually everything.  Consumers are being trained on all fronts to expect, and get, what they want, when they want it and wherever they want it. The need for best service, one face to the customer service and value oriented performance is also driven by this challenge.

Niche BPO

Niche BPO providers focus on two to four processes.  For instance, a company focuses on DRTV and OB Sales.  Niche providers will hire the client’s people, but only up to 50 or so.  They will invest modest amounts of capital to release some of the client’s asset value.  For instance, they will invest money migrating assets to their system or they will buy the assets in their specialist process area.

Niche BPO providers are generally domestic, and their deals range from three to five years in length, with a yearly contract value of $5-10 million.  Niche providers aim to make selected processes more efficient, by lowering costs and raising service levels.  They are paid based on outcomes, such as lowering turnover or reducing hiring time from 120 days to 90 days.

In niche outsourcing, risk is typically shared evenly between client and provider.  Although providers will hire the client’s people and be responsible for outcomes, they only make limited investments in capital and only impact a few processes.  Thus, clients continue to shoulder the other processes in a function.  So the other internal processes of client and provider are interdependent.

Offshore
Companies based in a different country with advantageous banking and tax rules.


Outsourcing

The subcontracting of business function(s) to an external organization. 

(See also Transactional BPO)

ROE
Return On Equity

ROI
Return On Investment

ROMI
Return On Minimized Investment

Strategic Outsourcing
A company's decision to outsource a business process that supports a larger business strategy.

Supply Chain Transformation
Managing and transforming the supply chain to achieve significant impact on cost structure, asset management and global integration. 

Typical scope of services includes:
        Lead Logistics Provider (LLP) - strategic management and oversight services for all elements of the supply chain
        Strategic Sourcing
        Process Management
        Fulfillment
        Streamlined Transactional Buying
     Customer Relationship Management

TCO
Total Cost of Ownership

TQM
Total Quality Management

Transactional BPO

Transactional BPO providers handle transactions for only one process.  In marketing, for instance, they do not take over a marketing department; they only perform the OB calls.  These providers will not buy the client’s existing software to liberate capital and will use their own software at their location.  They do not take on the client’s people, their contracts are short (1-2 years), and the contract values are not large ($1-5 million a year). 

Working with transactional providers has many benefits, but the more processes are outsourced, the more fragmented the processes become.  In essence, there still is an in house department to manage.

Transformational Outsourcing

Contracting with an external organization to take primary responsibility for providing a business process or function.

It goes further than services, communications or applications.  The outsourcing provider takes primary responsibility for ensuring that a full process works, interfaces effectively with other company functions, and delivers the outcomes intended. (See also Comprehensive BPO)


Value Based Spending
Trend in business that confronts service companies today.  Companies have spent vast amounts of money on infrastructure / asset and have been doing it for years.  Global and large regional companies all have budgets that truly challenge the imagination of most experts themselves.  Nobody is taking more notice of these budgets than the shareholders of these companies.  More and more, there are mandates for value based spending.  In a nutshell, shareholders are simply fed up with massive infrastructure / asset spending that doesn't produce measurable value.  That doesn't mean the companies were spending foolishly in the past.  It simply means they were spending with different criteria and different expectations.  Today, however, they expect much more from that infrastructure spending than ever before and understand the value that lies in Comprehensive BPO to give them more value for less investment.