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Q&A with Sykes' Dan Hernandez
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Q&A with Sykes' Dan Hernandez

September 10, 2009
By Brendan B. Read
Senior Contributing Editor

Sykes is a leading business process outsourcing (BPO) firm with more than 45 contact centers in 20 countries employing 33,000 employees, communicating with clients’ customers in 30 languages.

We approached Dan Hernandez, senior vice president, global strategy, on key trends in BPO and how his firm is responding.

BR: What are the top three trends you see happing in BPO i.e. customer service, support and outbound telemarketing?

DH: Given current economic conditions, we see more companies choosing outsourcing as a strategic imperative. Outsourcing helps companies realize a better use of capital, and allows the company to focus on their core competency.

We are also seeing activity in both the business-to-consumer and business-to-business segments within the technology and communications verticals, while mostly business-to-consumer within the financial services vertical.

Companies are also looking for additional cost-cutting measures without hurting the quality of the customer experience. We’re seeing more web-assisted transactions (ePersonal Banker/Advisor), up-to-date data for operational transparency of clients’ customer care (YourView) and using the call center as a data center through such programs as Insight Analytics and Customer Interaction Design. Insight Analytics and Customer Interaction Design deploy simple call monitoring with complex monitoring practices to bring more insightful data to the client for marketing needs and process improvement within the customer experience.

BR: How are the current economic conditions affecting the demand, pricing, quality, contract terms and the supply of BPO services in general? The ability of teleservices to provide the technologies needed to meet clients’ needs and to stay competitive? Has there been a change in what clients are seeking and what is driving this?

DH: We continue to see a demand for outsourcing while companies are looking to transfer fixed costs to variable costs. Outsourcing allows them to do this. Outsourcing also allows them to focus on their core competencies, which is especially crucial in current economy.

ePersonal Banker/Advisor and YourView are just some of the technologies SYKES is putting to use in order to create additional value within the customer experience. We’ve also developed Insight Analytics and Customer Interaction Design to bring actionable data to the client for marketing needs.

SYKES has found that many companies are also looking to consolidate vendors, centralizing call volumes under fewer ‘roofs’. Given this trend, and the recent failure of many businesses, outsourcers with strong financial sheets, such as SYKES, have a strong competitive advantage over those companies with weaker financials.

BR: To cut costs many firms are shifting more of their inbound and especially their outbound work to IVR, and inbound also to web self-service. What impact is this having on the demand for and supply of teleservices? Are you seeing a shift to IVR from your live agent programs?

DH: SYKES continually works with our clients to help them more efficiently and effectively manage the customer experience provided with their customer care solutions. This can include the use of IVR although IVR is more of a conduit and not an end result. Even though IVR has a successful history, and before deploying such technology, SYKES uses solutions such as our Customer Interaction Design, where we can design a call flow based on actionable data retrieved from the customer experience, to make sure the benefits of the IVR are being fully recognized and are delivering a positive customer experience. Other solutions, such as ePersonal Banker/Advisor, a solution that provides web-assisted transactions, are also very effective in increasing the value of the customer experience.

BR: What is happening with BPO nearshoring and offshoring? There seem to be two conflicting trends: American companies especially under increased pressure to keep jobs at home – while costs pressures are driving them nearshore and offshore.

DH: We do not see nearshoring/offshoring to be conflicting trends with onshore support. The geography from which a customer served is a function of our clients’ customer care strategy. For example, if transactions are targeted toward a specific audience, such as Hispanic support, nearshore support can be a great option for developing a customer care solution for the U.S. Hispanic community. Location of support is not strictly decided upon by cost but also on the customer service strategies of our clients.

We encourage our clients to approach their customer care from a ‘rightshore’ perspective, meaning preference of location is driven by cost, agent skill set, and location. While SYKES has experienced significant growth within its global footprint, a large portion of this growth has occurred in the U.S., with seven new centers opening in the past 18 months.

BR: Describe how your firm is coping with the current economic climate in preparing for what appears to be a slow recovery, and to meeting clients’ needs. Outline any new practices, programs, services and cost-saving measures you have taken and the reaction of clients and prospects.

DH: Given what we’ve seen so far, we do not see any threat to our growth objectives. Our plans are very controlled with a revenue growth of 15 percent-20 percent. We continue to see increased demand for outsourcing. We’ve had no adjustments, and continue to keep a strong focus on service and operational excellence.

We do conduct periodic client audits to assess our performance as well as our clients’ business needs and future business challenges. Based upon the survey results, our clients continue to see SYKES as providing excellent value for the money.

BR: Discuss home agent outsourcing. Does SYKES provide it or will you provide it? If yes, please outline and describe what types of clients and programs it is handling, and would these have been handled domestically or nearshore/offshore in traditional centers? If not, why not?

DH: SYKES does provide home agent outsourcing. We have various clients for whom we have deployed this work-at-home agent solution. One of the drivers for this model is better to access to more experienced and educated talent.  For example, in Canada we have a work-at-home agent model to provide healthcare resources. The work-at-home agent model allows us to recruit nurses, a scarce resource, helping us provide expert access to healthcare.

Another driver is cost efficiency. The combination of a more flexible workforce without the capital requirements of brick and mortar infrastructure provides a compelling solution for many clients. We anticipate this trend will continue to grow based upon the market dynamics we have analyzed.

As far as whether these calls would be handled domestically or nearshore/offshore in traditional centers, that is really a function of our clients’ customer care strategies.

Brendan B. Read is TMCnet’s Senior Contributing Editor. To read more of Brendan’s articles, please visit his columnist page.

Edited by Patrick Barnard

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