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Call Centers Grow On Demand

CALL CENTERS GROW ON DEMAND

BY REHAB EL- BAKRY

Egypt has high potential to be an offshore call center destination. That was the message presented at a worldwide industry gathering in Cairo last month. The Offshore Customer Management International Conference highlighted just how far Egypt’s call center industry has come in just a few years, and pointed out what more needs to be done.

Call centers – specialized facilities that handle inbound and outbound telephone calls for clients – have become big business, with the worldwide market growing at over 20 percent per year. Canadian research firm XMG projects the industry’s worth will hit $76.3 billion by 2008, with India and the Philippines claiming the lion’s share of offshore accounts.

Since Egypt’s first call centers opened six years ago, the number of agent positions has grown exponentially. Today, some half dozen call centers with an estimated 3,000 agent positions manage both domestic and international accounts, and industry insiders expect that number to triple by 2009. And that’s good news for everyone involved.

But as the industry has grown, instead of branching out to secure their own niche, its players have increased their collaboration to market Egypt as an offshore call center destination. “We’ve all been working very hard for the past two years to increase the profile of Egypt on the international level in order to secure more international offshoring contracts,” says Adel Danish, CEO and chairman of Xceed Contact Center, an affiliate of Telecom Egypt. “We’ve been working together to ensure our presence in international exhibitions and working very closely with the government because we recognize that in order for us to grow our businesses individually, we first have to make Egypt a recognized location.”

After all, explains Khaled Shash, managing director of Raya Contact Center, multinational companies (MNCs) shopping for an offshore call center tend to follow their competitors. If one MNC contracts a call center in a country, others prefer to follow their lead rather than venture into a new, untested location. “If this were not the case, then we wouldn’t have thousands of call centers in India, the majority of which are working almost exclusively for offshore clients,” he says.

But to get a piece of the offshore pie, Shash argues, Egypt must first be branded as an offshore destination. “We can say that 70 percent of the effort right now is about promoting Egypt, [which comes before] promoting your company.”

And there’s a lot for Egypt to promote. “When you think about it, we have all the right ingredients to give other offshore destinations a serious run for their money,” Danish says. He explains that Egypt has high-quality telecommunications infrastructure, which is among the most advanced in the developing world because the entire network has been recently built or upgraded. It also has an educated workforce able to provide services in multiple languages, a large number of fresh graduates and the management skills to handle international contracts.

More significantly, perhaps, Egypt has a government that recognizes the potential this industry has for job creation and revenue generation, and is working to support it. “The government has worked very closely with us providing the needed regulatory framework, addressing issues such as permits, facilitating our participation in international exhibitions and providing the needed accreditation,” says Danish. “This support has been essential in the growth of the industry and in our ability to position Egypt in the international market.”

But if Egypt is to succeed, says Tamer Badrawi, managing director of the Call Center Company (C3), it must play on its natural advantages. The US, for instance, accounts for almost 60 percent of offshoring clients, yet its long-standing preference for India – a relationship that dates back over 15 years – makes it a tough market to crack. Instead, Badrawi sees Europe as a natural partner for Egypt. “We’re only three to four hours’ flying away from most destinations in Europe, versus 18 or 19 hours of flying to get to India, for example,” he says. “This is very important because if [a client] needs to fly over for training or to assess an account, they can literally take a flight first thing in the morning and leave in the early evening. This is a competitive advantage.”

But a more enviable advantage for Egypt is the language card. Egyptian call centers are able to provide services in a variety of languages including Arabic, English, French, German, Spanish, Italian, Greek, Portuguese and Russian. This gives it a decisive lead when competing for the multilingual markets such as Europe, says Shash. “India offers English services, countries in North Africa like Morocco and Tunisia offer services in French, but we can offer services in eight or nine languages, which gives companies offering [customer support] in different countries or languages the ability to outsource their offshore services to one destination that can offer them the full package, rather than dividing the service or contract between several off-shore locations.”

In addition, Egyptians generally have more neutral accents than their counterparts in India, the Far East or North Africa – a point that has not gone unnoticed by MNCs and international clients looking to offshore their inbound or outbound services. “When it comes to offshore call centers, the accent in which you provide the service is a very important factor,” notes Shash. “If the person on the other end of the line can’t place the accent, then that’s good. We can offer that in Egypt.”

Enterprise software giant Oracle, which has contracted offshore call centers around the world to handle diverse tasks, was attracted to Egypt’s location and level of service. “We selected Egypt because we had a hole in our coverage for call center services between Europe and India,” explains Graeme Mair, Oracle’s vice president for global product support. “Egypt was the perfect location. We found that the service had the same level of efficiency, professionalism and cost-effectiveness as other destinations that have been in this sector for a lot longer.”

While most industries in Egypt shy away from competition, local call center operators that Business Monthly spoke to say bring it on. Shash points out that the larger the industry grows, the more able it will be to attract large international clients. “In order for us to land more offshoring clients we need to have more call centers that offer this service,” he says. “That’s why one of the main goals is to have more call centers in the market so that when we travel abroad, we can argue that we have an industry and not just a handful of high-quality call centers.”

He says those working in the industry would be happy to see a multinational call center either partner up with one of the local ones or to invest and build their own call center in Egypt. This, he says, would send a clear message to international clients seeking offshore destinations that Egypt is on the map and force international industry watchers to “sit up and take notice.”

There’s no doubt that A.T. Kearney has noticed Egypt’s growth. Each year, the American management consultant firm publishes an index that ranks the world’s top 40 most attractive destinations for offshoring service activities factoring in cost, people skills and availability, and business environment. Egypt entered the list for the first time in 2005 at 12th place. By next year, Badrawi confidently predicts, it will rank within the top seven.

According to London-based research company Datamonitor, Egypt’s call center industry is growing at 50-60 percent per year. With that type of growth, it’s not surprising that call centers are struggling to keep up with demand. “I had the opportunity to land a contract, but the company needed 12,000 agents in a matter of two months and the simple truth is I can’t do that right now,” says Shash. “Right now, we could find a few hundred English-speaking agents in a matter of a few weeks, French- and German-speaking agents in a month or so, but we’re still not at the point where we can handle such a huge contract.”

He says it’s very important for call centers to recognize what they can and can’t handle.

Badrawi agrees, explaining that the industry’s main challenge is to convince potential clients that Egypt “is a place that you can trust with your business.” While the government can support call centers in this endeavor, it cannot control their actions. One bad contract by a maverick firm could ruin it for everyone. “We all want to grow, but it would be detrimental for all of us if a single one of us took up a contract and failed to deliver on it.”

For now at least, Egypt’s call centers demonstrate an unusual level of cooperation and camaraderie, recognizing that what’s good for one is in the benefit of all. “We cheer one another on because this is the best interest of the sector at the moment,” says Danish. “Right now, we’re at the phase where everything any of us does is a step towards placing Egypt higher on the map... but as the industry develops further we will each carve our own niche in the market.”

OFFSHORE CALL CENTERS Xceed, the nation’s only public sector call center, was launched in 2001 to provide inbound and outbound services to Telecom Egypt (TE). It soon diversified and now has more than 1,200 agents working on both domestic and international accounts, including TE, Microsoft, General Motors and Oracle. Call Center Company (C3) started offering service in 2003 with five agents. Today, the company has more than 450 agents and expects to exceed 900 by the end of the year. Unlike other call centers in Egypt, C3 began by offering services in French, and later added English, Arabic and Spanish. Raya Contact Center was established in 2001to provide call center services for Microsoft and SMEs, and later developed to provide service for its parent company, Raya Holding. It has over 950 agents and recently relocated its facility to Sixth of October City to accommodate an expected growth in the number of clients. Egyptian Contact Center Operators (ECCO), a subsidiary of the National Telecommunications Company (NTC), was established in 2001 to handle both local and international accounts. It provides inbound and outbound services. Equant was established by France Telecom Group in 2001 as part of its call center network to provide support services for its clients. It handles technical support, bill review and outbound research for the group.

DIAL FOR TRADING Egypt’s fast-growing call center industry is creating a high demand on skilled labor, but in order to capitalize on this demand the country will need to equip its workforce with the right tools. In 2004, the Ministry of Communications & Information Technology (MCIT) took a proactive approach to the industry’s development by investing heavily in the certification of both agents and call centers. Since then, it has trained over 1,000 agents each year on behalf of all call centers, familiarizing them with telecommunications technology, upgrading their computer skills, developing their phone etiquette and fine tuning their language skills. “For us, training is a very important component and a large part of our expenditure,” explains Tamer Badrawi, managing director of the Call Center Company (C3). “So the fact that [the government] offers us internationally certified training for our agents allows us to cut our cost and gives our agents the best training. And that in turn allows us to give our clients the best service possible and lets us focus on keeping our existing clients and seeking new ones.” MCIT’s training program has provided a pool of skilled labor from which call centers can select candidates for more specialized training. “We have a pool of potential agents to select from, all of whom have the basic information as well as a grasp of the technical concepts involved in this industry,” explains Khaled Shash, managing director of Raya Contact Center. He says in-house training is used to build on the skills the agents acquire during their government-funded training and certification program. “Our next step will be training the upper management levels because they are the ones who will be able to raise the quality of the performance of their individual teams.” There is no underestimating the importance of a good training program, asserts Adel Danish, CEO and chairman of Xceed Contact Center, who believes MCIT’s training program has helped keep the attrition rate of agents in Egypt far lower than in other call center destinations. “The attrition rate is a very important variable because every time an agent leaves it translates into an investment that goes down the drain,” he explains. In many countries, working as a call center agent is seen as a short- to medium-term job; most agents leave after six to 18 months due to the stress and repetition of the job. In India, the attrition rate can be as high as 80 percent, which means that call centers there must hire an entirely new team every year. “In our case, Egyptians tend to view being a call center agent positively,” says Danish. “Our attrition rate is less than 12 percent, whereas the international average is between 40 and 60 percent per year.” It’s a tough job, admits Badrawi, who notes that if an agent survives the first three months, chances are they will stay onboard for some time. “That’s why the selection process is really important, because the fact is not everyone can handle sitting in a chair for eight hours taking orders or complaints or [providing] support,” he says. Egypt’s call center work environment is better than that of its competitors, claims Badrawi, explaining that Egyptian call centers offer their agents on the job training, decent pay, and the possibility of both vertical and horizontal promotion. “Because we consider this a highly technical job, we offer a good range of pay,” he says. “Not only does this allow us to seek highly qualified people for the job and helps us to keep them, but it also sends the message to our clients of the caliber of service we can provide them.” In other offshore destinations like India, the salary of an agent can range from $0.50 per hour to $4 per hour. Egypt is considered a mid-range offshore destination with agents paid on average a little over $2 per hour, and starting salaries between £E 1,500 and £E 1,800. “One of the good things is that this is the average [salary] for all of us in Egypt, which keeps the quality consistent... [which] keeps Egypt’s branding message consistent.”

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