Industry news

Over the next five years the call/contact centre industry will undergo enormous change. Consumer and business customers will no longer have to deal with accent problems and call queue waiting. The cost of customer service, technical support, telesales and telemarketing will be greatly reduced while being enhanced with more efficiency and control. Today’s labour-intensive environment will change dramatically and will be augmented by a new state-of-the-art Artificial Intelligence (AI) technology based on the latest research and government security applications.

Within the next year a few early adopters - mostly savvy outsource vendors as well as self-source companies - will implement the use of AI within their call/contact centres and will expose the industry to its true power and capabilities. I predict that within two years 25% of call/contact centres will be employing some level of AI. Within five years, the industry will become reliant on AI as a resource for servicing customers. Yes, there will still be the need for human agents; however, AI will reduce that number greatly from today’s market size at a much reduced price and cost. And most human agents will be providing back-up to the AI front-end contact systems versus being on the front end today. No, the AI system won’t provide for all calls, so back-up to a human agent is required for a portion of the contacts. But in time, the AI system will learn and be modified to accommodate a majority of the calls through fruition.

What will drive the adoption of this new flavour of AI? The same two dynamics that have driven changes in the past: lowering overall cost and improving the customer experience.

Today’s Environment

The technology and practices employed today for servicing customers are not much different from what they were 15-20 years ago. Yes, technology has evolved and the systems employed are more advanced, but still it’s basically the same. This holds true for operational practices as well. Bottom line: we’re still completely reliant on human labour forces to deliver customer service for most of the industry.

There are Interactive Voice Response systems (IVRs) which provide a low percentage of coverage beyond traffic management, but these are limited in function and restricted by how far they can maintain required customer satisfaction levels. Most IVRs only provide front-end traffic management to a human agent today and the percentage of full customer service is very low for IVR-only support.

The Internet also offered some advancement in operations and technology but we’re still doing the same basic things that we did 15-20 years ago. Internet, or Voice Over IP (VOIP) has lowered the cost of communications, but this still has not changed the industry.

There has not been a “Next Big Thing” in the customer service and call/contact centre market within the past 15-20 years. Some would argue that offshore, springing forward some 8-10 years ago was a big thing, but it didn’t really move the market forward into a changing evolution. Offshoring merely lowered the cost to a degree - but also introduced problems related to accent, attrition and control. Bottom line: the customer service and call/contact centre footprint hasn’t really changed much during the past 15-20 years.

The Next Big Thing

A definition of a Next Big Thing would include something employed on a grand scale which would change an industry completely. Current AI technology which is available today for call/contact centres and customer service will do just that. This technology has been under development for decades for various other reasons, such as national defense, national intelligence, national security and some commercial applications.

Today, there is an offering available which is designed to replace the human agent in a multitude of applications in the customer service arena. This technology is basically an avatar which sounds, speaks, listens, thinks and reacts much like a human. Designed to function like an agent or rep within a call or contact centre, this technology can perform at amazing levels today for a fraction of the cost of a human agent, while still providing acceptable customer satisfaction.

AI goes way beyond IVRs and Interactive Virtual Communications (IVCs), which are basically script-oriented and deal with fixed responses. Even the smartest IVRs today can’t match up to the AI solution available now. AI passes the IVR by speaking, listening, thinking and reacting to the responses outside of standard fixed scripting and responses. AI does this within conversational modes and does not sound like an automated IVR or recording.

AI also resides in a cloud and eliminates reliance on high-cost communications, which eliminates standard clogs in an Automated Call Distributor (ACD), eliminates most metric problems in a call centre and can eliminate most brick and mortar costs associated with human labour. AI can eliminate most Key Performance Indicators (KPIs), including abandonment rates on an inbound queue, average speed of answer (ASA), average hold time (AHT), etc. because it resides in the cloud and can answer almost any number of calls coming in at the same time without hold time. This also applies to outbound calls, as AI can make thousands of calls at the same time versus having to trudge through an agent available queue to do an outbound call. AI can be used in a mixed inbound and outbound scenario within the cloud or within an ACD, where outbound calls can be made during light inbound periods according to scheduled time zones. Most important, AI can solve most of the unpredicted inbound call waves which can bury a call centre in an instant.

AI will also eliminate the need for workforce management systems at the level required today, as well as workflow management as this can be “trained” into the AI system and modified more easily than training a huge human work force. The AI’s modifications can be a fraction of the cost of training human agents as well as much less time to train hundreds or thousands of agents. Human Resource expenses, recruiting costs and attrition management costs will be greatly reduced due to less human agents required, as well as customer satisfaction management, or quality control, as AI can record every session and literally learn from its experiences with guidance, approval and modifications from management. Current AI technology can also communicate over various channels, such as voice, chat, e-mail, text and IM.

Summary

AI will be the next big thing in the call/contact centre and customer service industry. This is not Star Wars, nor some other fictional high tech dream. It’s here today and is growing like wildfire. The adoption rate of those business, education and government organisations that have conducted pilots has been very high due to a ROI of less than six months and a TCO that has been documented to be as high as 60%.

Like most unusual technologies, it will start out slowly but will take the market by storm once the early adopters prove its true value. These adopters will be the big winners in this technology infusion, getting a jump on their competition. Especially in the outsourcing industry. It is already being used by many of the early adopters in the self-sourcing community and has proven itself quickly. The capabilities and cost savings will drive this new technology forward on a natural course. This will only take one to two years from today to get established and within five years will encompass the entire market.

Source: http://www.outsourcemagazine.co.uk/articles/item/3601-the-next-big-thing-to-hit-callcontact-centres-and-customer-service

Electricity North West has outsourced its IT to Indian offshorer Wipro Technologies in a five-year deal.

The utility firm owns, operates and maintains the electricity distribution network throughout the North West of England.

Wipro will set-up new data centres and configure "high availability infrastructure" for the electricity firm's operations.

Electricity North West will move to a more virtualised infrastructure, and upgrade key business applications.

Wipro will provide the fully managed IT services using remote infrastructure management systems, based on the ITIL v3 service integration model.

The value of the deal has not been disclosed. The contract comes as another utility, Anglian Water, has chosen to drop CSC after a 15-year relationship and sign-up Capgemini for a new five-year IT services contract.

Utility companies are increasingly looking towards implementing smart grids to control the distribution of gas and electricity. But a recent survey found that many are not yet ready to support smart grid intelligence, reaquiring better systems integration for the masses of data they will have to manage.

Anglian Water has dropped CSC after a 15-year IT outsourcing relationship, and chosen Capgemini to run its IT infrastructure and core business applications.

Anglian, which serves 6m homes and businesses in eastern England, has signed a five-year contract with Capgemini for an undisclosed sum.

CSC signed its original ten-year contract with Anglian in 1995 for around £200 million. It was then paid a greatly reduced £38 million to run Anglian's systems for a further five years in 2005. Phil Carnelley, analyst at TechMarketView said, “The deal with Capgemini is also for 5 years, so we can assume that ‘even more for even less’ will be the name of the game.”

The contract involves both cash and intellectual property. Capgemini had studied the way Anglian had rolled out its core SAP business platform, and the two organisations had agreed a commercial arrangement to enable Capgemini to utilise Anglian's intellectual property within Capgemini's SAP UK Water Template, designed for use in deploying SAP at other water industry clients.

The transfer of Anglian’s IT to Capgemini has already begun and is scheduled to be completed by February next year.

Chris Boucher, director of information services at Anglian Water, said, "Capgemini clearly has the business and technical skills and experience, and the capacity for innovation that can help drive our business forwards."

Other factors behind Anglian Water’s decision, said Boucher, included Capgemini’s "collaborative approach, its commitment to quality and its cost-effective proposals".

Capgemini will look after Anglian Water's IT infrastructure from its data centres in Swindon and Bristol. Applications management will be managed from sites in the UK and India, and a dedicated IT help desk will be located at a Capgemini facility in Romania.

Source: http://www.computerworlduk.com/news/outsourcing/3247161/anglian-water-cuts-off-csc-after-15-years/

David Cameron will today set out a vision of London's East End becoming a hi-tech rival to Silicon Valley on the US west coast, disclosing Google, Facebook and a host of cutting-edge firms have committed to invest in the Olympic Park.

In a speech today, the prime minister will announce that he is introducing a new entrepreneurial visa as well as allowing more intra-company transfers – moves that will blow a hole in his plan for an immigration cap.

Cameron will also disclose that he will look at a potentially far-reaching change to intellectual property rights after Google told him UK laws are far more restrictive than the US.

The prime minister will say he is determined to create the right environment for the thriving start-ups already flourishing in London's Old Street and Shoreditch areas to grow into multimillion pound global businesses.

He will say: "Silicon Valley is the leading place in the world for hi-tech growth and innovation. But there's no reason why it has to be so predominant.

"Our ambition is to bring together the creativity and energy of Shoreditch and the incredible possibilities of the Olympic Park to help make east London one of the world's great technology centres."

Cameron's team, in a round of meetings with hi-tech firms and venture capitalists, has won support for his vision.

Google, Facebook, Intel and McKinsey & Co are among the companies that will commit to invest in the future of the area. Google had told him the company could not have been formed in the UK.

He will say: "The service they provide depends on taking a snapshot of all the content on the internet at any one time and they feel our copyright system is not as friendly to this sort of innovation as it is in the United States.

"Over there, they have what are called 'fair-use' provisions, which some people believe gives companies more breathing space to create new products and services."

In the two main commitments to east London, Google will create an Innovation Hub for its researchers to come together with developers and academics to create the next generation of applications and services. Facebook will create a permanent home for its Developer Garage programme, which brings together the most talented UK developers and entrepreneurs.

Cameron's decision on intra-company transfers will mean that employees of multinationals who move to work in British branches, potentially numbering in their thousands, will be exempt from the permanent immigration cap to be introduced in April. Out of the 36,490 skilled workers who came to Britain from outside Europe last year, 22,000 came on intra-company transfers. More than half of the ICT visas went to three Indian IT companies and the British IT industry has been pressing for them to be included in the cap. The largest single group of unemployed graduates is in IT.

The decision follows fierce lobbying by big employers including Nissan, Toyota and Honda who threatened to close UK plants if they cannot move staff freely.

The announcement is thought to be the result of a deal between the business secretary, Vince Cable, who wanted a more flexible cap, and the home secretary, Theresa May. UK Border Agency officials have been concerned that the route has been used, particularly by Indian IT companies, to undercut British graduate salaries.

Cameron was lobbied by the Indian government on the issue during his recent visit.

The decision means it will be harder for the government to get net migration – 196,000 last year – down to the "tens of thousands" promised by the next general election.

Home Office sources said the formula leaves the door open for a limit to be placed on intra-company transfers outside the formal immigration cap. One option is to limit the visas to 12 months – which would have blocked all but 6,000 of last year's arrivals. Another option is to require a minimum salary of £45,000 which would also curb numbers.

In a speech today, the prime minister will announce that he is introducing a new entrepreneurial visa as well as allowing more intra-company transfers – moves that will blow a hole in his plan for an immigration cap.

Cameron will also disclose that he will look at a potentially far-reaching change to intellectual property rights after Google told him UK laws are far more restrictive than the US.

The prime minister will say he is determined to create the right environment for the thriving start-ups already flourishing in London's Old Street and Shoreditch areas to grow into multimillion pound global businesses.

He will say: "Silicon Valley is the leading place in the world for hi-tech growth and innovation. But there's no reason why it has to be so predominant.

"Our ambition is to bring together the creativity and energy of Shoreditch and the incredible possibilities of the Olympic Park to help make east London one of the world's great technology centres."

Cameron's team, in a round of meetings with hi-tech firms and venture capitalists, has won support for his vision.

Google, Facebook, Intel and McKinsey & Co are among the companies that will commit to invest in the future of the area. Google had told him the company could not have been formed in the UK.

He will say: "The service they provide depends on taking a snapshot of all the content on the internet at any one time and they feel our copyright system is not as friendly to this sort of innovation as it is in the United States.

"Over there, they have what are called 'fair-use' provisions, which some people believe gives companies more breathing space to create new products and services."

In the two main commitments to east London, Google will create an Innovation Hub for its researchers to come together with developers and academics to create the next generation of applications and services. Facebook will create a permanent home for its Developer Garage programme, which brings together the most talented UK developers and entrepreneurs.

Cameron's decision on intra-company transfers will mean that employees of multinationals who move to work in British branches, potentially numbering in their thousands, will be exempt from the permanent immigration cap to be introduced in April. Out of the 36,490 skilled workers who came to Britain from outside Europe last year, 22,000 came on intra-company transfers. More than half of the ICT visas went to three Indian IT companies and the British IT industry has been pressing for them to be included in the cap. The largest single group of unemployed graduates is in IT.

The decision follows fierce lobbying by big employers including Nissan, Toyota and Honda who threatened to close UK plants if they cannot move staff freely.

The announcement is thought to be the result of a deal between the business secretary, Vince Cable, who wanted a more flexible cap, and the home secretary, Theresa May. UK Border Agency officials have been concerned that the route has been used, particularly by Indian IT companies, to undercut British graduate salaries.

Cameron was lobbied by the Indian government on the issue during his recent visit.

The decision means it will be harder for the government to get net migration – 196,000 last year – down to the "tens of thousands" promised by the next general election.

Home Office sources said the formula leaves the door open for a limit to be placed on intra-company transfers outside the formal immigration cap. One option is to limit the visas to 12 months – which would have blocked all but 6,000 of last year's arrivals. Another option is to require a minimum salary of £45,000 which would also curb numbers.

Source: http://www.bbc.co.uk/news/uk-england-london-11689437

Britain's services sector activity unexpectedly gathered pace in October, but companies also cut jobs and were more subdued about the outlook for next year in the face of austerity measures.

Markit/CIPS's latest PMI services survey is likely to reinforce expectations that the Bank of England will vote not to inject more stimulus into the economy this week but leave that option open.

The headline business activity index rose to 53.2 last month from 52.8 in September, the highest reading since June and confounding forecasts for a dip to 52.5.

Improvement was led by a rise in new business, although the expectations index fell a full point and the employment index slipped back below the 50-level that separates expansion from contraction as firms braced for tough conditions ahead.

"On both output and new orders measures, rates of expansion remain soft compared to long-run averages, as companies continue to digest the true effects on the economy of the coalition government's Comprehensive Spending Review," said Paul Smith, senior economist at Markit.

"The latest data therefore suggest that the sector is set to make a below-par contribution to GDP in the coming months."

Nonetheless, BoE policymakers are also likely to be concerned by news of growing inflation pressures in the services sector, with firms ramping up their prices at the fastest pace in two years in response to increases in energy and wage costs.

Wednesday's PMI data, which covers firms that make up around 40pc of GDP, came after an unexpectedly robust survey of manufacturing activity and surprisingly weak construction PMI data this week.

On balance, the figures suggest Britain's economy made a solid start to the final quarter of this year.

However, the survey also showed that companies remain cautious about the outlook and want to see how the £83bn of spending cuts laid out by the government last month will affect people's spending decisions.

"A number of respondents reported the deferral of client spending, reflecting continued uncertainty over the impact of government spending cuts on the economy," Markit said.

"Such concerns again dominated service providers' expectations, with business confidence remaining historically subdued."

The business expectations index fell a full point from 66.2 in September.

Source: http://www.telegraph.co.uk/finance/economics/8107201/UK-services-sectors-surprise-growth-balanced-by-job-cuts-subdued-outlook.html

Outsourcing group Serco has withdrawn plans to pass on the impact of government spending cuts to its suppliers in the face of heated protests and "discussions" with central government.

The firm said it now wished to "apologise unreservedly" to its suppliers and has retracted letters asking for a rebate of 2.5% it unexpectedly demanded and non-payment of which it said could end commercial relationships. The firm had told its supply chain it needed to make the sacrifice to help pass savings back on in turn to the government.

Its finance director Andrew Jenner had written to suppliers, "I am asking you to offer us a rebate of 2.5% (exclusive of VAT) on Serco's full-year spend with you for the 2010 calendar year in the form of a credit note. Like the government, we are looking to determine who our real partners are that we can rely upon.

"Your response will no doubt indicate your commitment to our partnership, but will also be something I will seriously consider in our working relationship as Serco continues to grow."

Now Serco – whose contracts on behalf of Whitehall include running prisons, the maintenance of a number of RAF bases and the operation of London's Docklands Light Railway – says in a statement that it had been working with the Cabinet Office as part of the government's efficiency programme, which "has involved discussions with our leading suppliers".

"As a result our plans evolved and we decided not to seek or accept any contributions from our suppliers, who had recently received letters asking for rebates... As a company that values our relationships with all our supply chain partners, large and small, we deeply regret this action and apologise unreservedly to them for the concern that this has caused."

Source: http://www.publictechnology.net/sector/central-gov/serco-backs-down-plans-pass-spending-cuts-burden-suppliers

Online grocery retailer Ocado is deploying Google Apps for Business for 1,250 staff, with the aim of cutting costs and improving productivity.

Ocado said the cloud-based product suite will facilitate remote working, improve productivity and boost internal communication for head office staff and regional managers. Staff will be able to log in from any secure internet connection to access their emails, documents, calendar and other internal information.

Hosted in Google’s secure cloud, staff will have access to tools such as Google Talk and Google Docs. Ocado will also use Google Sites to develop a branded web landing page for staff. Ocado’s marketing team will be able to use this page to produce internal announcements in video form, using Google Video.

Ocado says Google Apps will reduce its IT costs - saving on servers, back-up space, support and maintenance - whilst in the longer term eradicating costly upgrades and licence fees. Ocado will also use the Postini Message Security feature included in Google Apps to replace its legacy spam filter system, leading to further cost savings.

Jon Rudoe, head of retail at Ocado, said, “At Ocado we aren’t afraid to challenge conventions and do things differently. We love the fact that Google Apps continues to innovate and develop new features and are excited about the benefits we expect to see across the business.”

Source: http://www.computerworlduk.com/news/cloud-computing/3246996/ocado-moves-into-the-cloud-with-google-apps/

Birmingham & Solihull Mental Health NHS Foundation Trust has started using a package it claims has let it save as much as 24% on price in a bid to cut technology cuts.

David Thomas, Head of Procurement at the Trust, said: “When we compiled prices for a random selection of recently bought products and compared them using this product, it demonstrated we could have saved an average of 10% on price. This more than justified the investment.”

Early use has found that on one major purchase the lowest price quoted was 3% higher than expected; use of that data allowed the Trust to save over £1,000, for instance.

The system is also reported to have shaved off 20% of the time the IT team had previously been spending manually benchmarking supplier prices.

Computer giant Dell has announced a deal to buy cloud-computing company Boomi for an undisclosed price.

Dell has been looking to acquire cloud computing technology and recently lost a bidding war with Hewlett-Packard for cloud firm 3Par, despite being the preferred bidder.

Steve Felice, president of Dell's consumer and small and medium-sized businesses division, said: “This deal will help businesses reap the full benefits of cloud computing. Twenty-six years ago we helped accelerate the move to client-server computing. Today we'll help drive a similar transformation with customers turning to the cloud to drive costs down and innovation up."

Cloud computing can allow businesses to cut data storage costs by delivering software, data storage and other services to customers via the internet and many large computer makers are looking to buy into the technology.

Bank of Ireland (BoI) has signed a five-year infrastructure deal with IBM after a previous seven-year contract with HP expired recently.

The financial terms of the deal have not been disclosed, but the contract with HP signed in April 2003 was worth $600m, according to HP's statement at the time.

There have been no significant changes to BoI’s infrastructure since then. The only addition to the new group-wide contract is the bank’s capital market’s division, which a BoI spokesperson described as “quite small in the overall scheme of things”.

The bank selected IBM for exclusive contract negotiations after protracted competitive tendering.

"The signing of this contract marks the culmination of a lengthy process, during which Bank of Ireland assessed a number of potential service providers," said Larry Kiernan, BoI’s head of group IT in a statement.The bank will continue to work with HP on handover tasks" he added.

The monetary value of the contract was not the only determining factor in choosing IBM, said a BoI spokesperson.