Outsourcing is being transformed; new outsourcing destinations, digitalisation, automation and the Internet of Things are only a few of the elements that are shaping it now.
Jeffrey Puritt, president and CEO of TELUS International, which operates delivery centres in eight countries, including Romania and Bulgaria, spoke to Andrew Wrobel about how his company selected the two emerging European countries, as well as about the newest trends in the sector and global outsourcing standards, during the Brexit and Global Expansion Summit in London.
Let me start with Bulgaria and Romania, where TELUS International operates. What made you choose these two countries?
Let me tell you about the wider picture first. We started this business 11 years ago, primarily to enable our parent company TELUS, a Canadian telecoms provider, to grow. As our business needs evolved, one of the requirements we had was to continue to support our parent company in its effort to serve the French-speaking population in Canada. To do this, we looked for somewhere with access to fluently bilingual French and English team members who could support TELUS’ needs.
We embarked on a fairly comprehensive evaluation of the entire world. And, not surprisingly, we looked at opportunities to provide French language skills out of Vietnam, Tunisia, Algeria, Egypt, Madagascar and/or Mauritius. We really did look right around the globe to see where we could find both the language skills that we wanted, as well as all of the other usual attributes that are so important to our business, such as a reliable infrastructure, connectivity and power. We also looked for a receptive business climate to support our long-term capital investments in both infrastructure and team members.
Ultimately, our search led us to Romania, where out of the 20 million or so people in the country, 4.7 million of them report that they speak French fluently. We believed we had found the right place to potentially expand our business.
So you targeted Romania, first?
Yes, but after having settled on Romania, we moved on to the next level of our evaluation analysis and search. We didn’t want to greenfield and start our own business there. Rather, we hoped to find a business that had already set up in the country and could give us a bit of a head start; that would serve to de-risk our investment a little, by leveraging a company which had established core infrastructure components and understood the business environment, the regulatory landscape and so forth.
After looking at almost 40 different companies with operations in Romania, we discovered CallPoint New Europe, which did, indeed, have a small Romanian footprint. Although, and interestingly, it was the newer, smaller sister company of a parent company that they had founded a couple years earlier in Bulgaria.
Were Bulgarians equally fluent in French?
While Bulgaria did not boast as many French speakers as Romania, it did have a number of highly skilled, multilingual agents. So, Bulgaria was almost a “gift with purchase”, if you will, in that by partnering with and acquiring CallPoint, we also acquired offices in Bulgaria. In fact, that office already had a larger footprint there than in Romania.
We began our search back in March of 2012. We concluded our investment in September of 2012. At that time, the business was still quite small, with only about 700 team members in total. That was a little over 500 in Bulgaria and 200 in Romania. Today, four years later, we’re almost 3,500 team members across the two countries. And, the size of our team in Romania is quickly catching up to Bulgaria.
But Bulgaria and Romania are not the first countries you outsourced in, are they?
No, they’re not. We started in 2005 in the Philippines, then expanded to Latin America in 2008, and then to Eastern Europe in 2012.
Central and Eastern Europe are excellent destinations on the delivery side. How do you compare these countries to other countries, globally?
I think we are witnessing a total renaissance of sorts in connection with the growth potential for this industry and through expanding into those countries. I guess this is not surprising because, it’s almost a predictable formula, if you will, that traces a similar outline to the past.
First and foremost, you need access to a skilled labour pool. Secondly, you need a reliable business environment, and reliability has a number of attributes. I mean reliability in terms of an economic climate that’s receptive to foreign direct investment so that companies such as ours have the degree of visibility, the confidence and the certainty that there’ll be an opportunity to generate a return on that investment. I also mean reliability in terms of the infrastructure; whether it’s connectivity, power, airports or roadways and the like.
All of these attributes need to exist in order to support this business model, which requires that we be able to re-route contacts, whether they are voice or non-voice connections, into the location where we have trained individuals with the appropriate language skills. They need to have the requisite skill sets to be able to support our customer and user requirements as well as the infrastructure required to transfer them to where those agents are located.
I think people sometimes underestimate the fact that if the airports and roadways become over-congested, this impedes one’s ability to conduct business at the speed of business. All of a sudden, whatever potential gains one might hope to secure through wage arbitrage evaporate quite quickly.
So it’s more than just inexpensive labour that is important, isn’t it?
Yes, it’s all of those other reliability attributes as well. I think, what we’ve seen in the countries that you listed, is a movement towards having all of those capabilities and, most significantly, producing some of the most talented IT professionals in the world.
As long as there continues to be the requisite economic climate to support foreign direct investment, I think we’re going to see a continued growth, in this industry, in this part of the world.
Do you think that the cultural background is important, things such as accent?
I certainly hear my share of consternation being expressed by people both in and out of the industry with respect to accent sensitivities. People express a desire for native or near-native speakers; they look for suppliers who are willing and able to provide accent neutralisation programmes for their agent population. This is because of perceptions about an agent population’s capability to really provide the required level of support to demanding, discerning customers who may be put off by interactions with agents whose accents are not the same as their own.
I base this opinion on my own personal experience. I also continue to spend a fair bit of time doing call listening in my own centres since, ultimately, it’s a core part of our service; it pays my salary and I want to be mindful of the quality of the product or service that we’re providing.
So what matters is quality?
Well, in my experience over the years, and almost without exception, the only time a customer ever expresses an opinion of any kind, negative or otherwise, about an agent’s accent is when the quality of service is lacking – but that’s human nature.
If you’re being understood, you feel that the individual on the other end of the phone is expressing the requisite level of empathy and understanding, even if they’re not saying yes; even if they are not giving you what it is you want, because perhaps what you’re expecting is unrealistic, for example a full refund for an issue you have caused yourself.
When the agent is sufficiently well-trained and well-supported by technology, processes, policy and management to be able to give the end-user customer a compelling explanation and to understand the situation, to make the customer feel heard and that a path has been opened for resolution, the accent of the agent is irrelevant and it never even comes up.
So customer service is vital?
Yes. Every time the accent issue comes up, it’s in the context of a failure of communication, a failure to properly understand. It’s almost as if we human beings look to rationalise the misunderstanding and, unfortunately, oftentimes the rationalisation takes the form of, “Well, you’re not from here. You don’t understand me. You don’t speak the same language as me, and that’s why you don’t understand what I’m saying. You’re not from my culture, my background, my country. Therefore, you’re not qualified to help me.”
The criticisms take many different forms. The spectrum can be everything from just a simple misunderstanding to outright racism. But the bottom line is, no matter how thickly accented the agent is, if they’re well-trained and they support the customer properly, the accent will be irrelevant.
If you look at the evolution of outsourcing services or business services, if you will, what are the requirements? What do buyers look for?
There’s a growing movement towards a single point of contact. This is certainly a dominant trend where the buyers and businesses that are looking to engage with business service providers are looking, not so much for discrete, individual transaction support, but rather for a more holistic experience. They want more comprehensive end-to-end capability in order to reduce the number of partners they need to interact with so they can deliver a more holistic, end-to-end service experience, as well as to be able to focus fewer resources on fewer relationships so they ensure better outcomes more cost effectively.
Another trend we are seeing is the leveraging of technologies and growing computing capability to deliver an omni-channel experience for end users. This enables them to self-serve over the Web (or otherwise) as they like. They can select multiple channels for communication, whether it’s social media, chat, text, email or voice. We have to ensure that the required data systems are available to an agent population so they know all about the customer the minute they make contact, using whichever one of those channels they prefer. This means, the agent can offer a more meaningful, comprehensive response based on their profile, and all of that takes place in real-time.
So I believe we are also talking about automation, right?
Well, I think we’re in the early days, but it is an irresistible force today; technological evolution is driving automation and I expect we’re going to see a disintermediation of a lot of the more rudimentary, agent-based, support transactions. That’s going to create both pressure and opportunity as we automate a number of those traditional interactions that were historically provided by live-agent support. I think this is creating some concern for the supplier community in terms of the number of team members for whom they may be providing employment but, at the same time, I think it creates an opportunity to exploit and leverage technology trends and to deliver a better outcome for your customers and their end users.
By definition, residual transactions cannot be automated because of their level of complexity. So, one needs to invest in one’s agent population even more to ensure they have the requisite experience, expertise, insight and support to be able to manage those residual, more complex transactions that can’t be automated efficiently and effectively.
Those are most of the trends that I see dominating the industry right now.
So which, out of all these trends, provides opportunities or advantages for further development of basic business services, or outsourcing, and which might be considered threats?
I don’t think these are necessarily mutually exclusive threats or opportunities. If you’re a transaction-centric service provider with a strained balance sheet and a tenuous brand and relationship with your team member base, then a lot of these trends will be hugely problematic and potentially catastrophic.
On the other hand, if you’re mindful of the changes in technology and the expectations from business customers and end-user customers, you have a strong balance sheet and a strong corporate culture and connection with your team members, as well as an ability to recalibrate your investments in both technology and people, training and development, then you can take advantage of these evolutionary trends in technology. In that way, you can continue to support your customers as they look to deliver a better omni-channel experience for their end users.
At the same time, you have the ability to make incremental investments in your team members so they can also handle residual, more complex transactions. I think these trends offer massive opportunities for growth potential.
Do you think that there are some risks or security issues that might be a result of the development of the outsourcing sector?
Yes, there are both, obviously. I think we need to be mindful of the implications around – let’s call it ‘the domestic labour market from whence many of these jobs originate’ – and when they transition to the emerging world. At some point, if there aren’t replacement employment opportunities, then there’s a significant risk of destabilisation with respect to job loss, moving to lower-cost economies.
I believe it’s incumbent upon all of us to be not just mindful of these risks and dynamics, but also to be in a position to do something about it. So, for example, when a domestic company in Western Europe or North America looks to leverage the outsourcing business services model, I believe they have a responsibility to address the potential consequences for their domestic labour force.
How do you mitigate the risks at TELUS?
To give you an example: as some of our lower-skilled, traditional, voice-based care and contact centre agent positions were moving from Canada to first the Philippines, then to Latin America and then to Eastern Europe, new employment opportunities were created. This was by virtue of the incremental profitability that TELUS derived from availing itself of that business model and then reinvesting the savings in new areas of the business, such as Optik TV, our IPTV service offering in Canada, machine learning and the Internet of Things. These are offerings that represent the third wave of services in the communications and connectivity world.
I think this dynamic is not dissimilar from when trains were powered by coal. There was a question, after new power sources were invented / discovered, about whether it was appropriate to keep the fireman, the man who shoveled the coal into the engine, on the payroll doing nothing or should the company refuse to embrace the new, cleaner, more efficient forms of energy. Would they be better to invest in that fireman, to help him up-skill so that he could find meaningful employment doing something else? Is it appropriate to simply say, “Well, we don’t need you anymore, so you’re fired?”
I believe the investment solution is absolutely the right way to go, and I think more and more companies need to be mindful of that. Certainly, it’s the approach TELUS takes, and it has worked well for both our Canadian team members and Canadian customers, who now have more options.
The corollary to this is the security risk where we’re seeing a lot of growing consternation with respect to the accessibility of networks and confidential customer (and patient) information (for example, in the healthcare domain).
As these networks become more distributed and intelligent, they create more opportunity but also more risk of intrusion. If you’re going to move your data out of your own premises; if you’re going to enable transactions across a network that covers the globe, it’s incumbent upon you to recognise the risk and to make the necessary investments in appropriate privacy and security solutions.
So again, I think it’s the collective responsibility of both the supplier and the buyer community to be mindful of those risks and to understand that they need to be able and willing to invest the requisite money, time and planning in order to do their best to inoculate their ecosystem(s) from intrusion.
Recently, the Global Sourcing Association (GSA) introduced new standards that seem relevant both for vendors and buyers. How important do you think that process and the introduction of those standards is?
I think we always have to be measured in our approach to regulation, to self-regulation and to instituting standards that are in the best interests of the ecosystem. I believe the preliminary approach should be a thoughtful one. More and more, we want to make sure there aren’t fly-by-night operators working under what I call the legacy outsourcing 1.0 model. This was basically “your mess for less” built on a basis of exploiting wage arbitration to deliver lower input costs, with very little concern for the client experience. Ultimately, it was a trade-off; you may have reduced your input cost temporarily, but what you ended up with were some decidedly unhappy customers and so you lost 100 per cent of your revenue in pursuit of a 30 per cent cost savings.
Unfortunately today, 20, 30 years into the infancy of this industry, I believe there are many providers who still think that way and, frankly, there are a lot of buyers out there who are still focused only on transaction pricing and unit input cost. They haven’t become as open as the other outsourcers, that I mentioned, who recognise that it’s really the total cost of ownership that matters. It’s important to consider the total lifetime value of the relationship with your end user. As a result of using an outsourcing partner or a business services’ partner with whom you can depend upon, you can avail yourself of the inherent economy of scale and scope that the industry is predicated upon, while increasing that lifetime value.
I strongly believe that having a universally understood, balanced and documented set of guidelines that both buyers and the sellers subscribe to is something that we should support.