the state of service & support in china

The State of Service & Support in China

Presented by Dr. Baumin Lee President, Teleweb Inc.

April 27, 2005

Bio – Dr. Baumin Lee China MII CRM Committee Deputy Director MII Federation of Informationization Promotion Expert Consultant China Academy of Labor and Social Security Chief Auditor MII Call Center Professional Jon Standard Commi Expert Taiwan Call Center Development Association Director 1998-present Teleweb Inc. CIO 2002-present Shanghai Teleweb Technology President 1998-2005 05Info Inc. CTO 1996,iPlanet Inc. Technical Director 1997-1998 ， Tandem Corp. Technical Manager 1988-1995 Bell Labs MTS 1983-1987, National Regulatory Research Institute Research Associate The Ohio State University, ISE Department P.HD. The Ohio State University Adjunct Professor

OUTLINE Technical Support and Help Desk

Outsourcing Market The People’s Republic of China China Call Center Market Status China Call Center/Technical Support

Challenges Trend in Call Center Technology China SCP Experience Characteristics of China Support Centers China support Centers SWOT Analysis Leading China Outsourcing Call Center –

95Teleweb Inc. Introduction

Technical Support and Help Desk Outsourcing Market

$14. 00B$21. 50B

$0. 00

$10. 00

$20. 00

$30. 00

Technical Support and Help Desk BusinessProcess Outsourc ing Projected Growth

International Data Corporation (IDC) predicts that the compounded annual growth rate (CAGR) for help desk outsourcing over the next five years will be 11.2%. According to IDC, the market for technical support and help desk business process outsourcing is expected to grow from $14.0 billion in 2002 to $21.5 billion in 2007.

Dolla

rs in

Billi

on

2002 2007

Source: Gartner Dataquest

Technical Support and Help Desk Outsourcing Market

$0. 00

$5. 00

$10. 00

$15. 00

$20. 00

$25. 00

Worldwide Technical Support and Help DeskOutsourcing Revenue

Techni cal SupportHel p Desk SupportTotal

2002 2003 2004 2005 2006 2007

Source: IDC 12/2002

Business Process Outsourcing Market

$0

$50

$100

$150

$200

$250

1

Worldwide Business P rocess Outsourc ing(BPO) Market

Gartner’s most recent projection for the worldwide BPO market predicted a $234 billion opportunity by 2005, with the market growing at a compound annual growth rate of 14% between 2000 and 2005.

2000 2005

Source: Gartner Dataquest

Market for Offshore Outsourcing

0

0. 5

1

1. 5

2

2. 5

3

3. 5

Mill

ions

of j

obs

3.3 million jobs to go offshoreOver the next 13 years, 3.3 million U.S. service industry jobs and $136 billion in wages will move offshore to countries like India, Russia, China, and the Philippines. The IT industry will lead the initial overseas exodus.

Source: 2002 Forrester Research, Inc.

THE PEOPLE’S REPUBLIC OF CHINA

Population of 1.3 billion people in 2004, expected to grow to 1.5 billion in 2020

3.7 million square miles: 22 provinces, 3 municipalities, and 5 autonomous regions

Socialist Market Economy in 1976 One Country, Two Systems

Tiananmen Square in 1989 GDP grew 8% and export grew 12% annually in 1978 –

1992 WTO in 2002 and Olympics in 2008, World Trade Show

2010 Open door policy to keep economic development on track

China Political, Economic, and Social Environment

Political Environment•economic system reform and establishment of socialist market economic system•Government Service Department have all established service-type call center, •and this becomes a powerful growth field of China’s call center industry•the political environment of China has been gradually improvedEconomic Environment•China has maintained an annual increase rate of 9%, Estimated by experts, The contribution of China’s economic growth to the world GDP is 14%, only after U.S. (20.7%) •The financial revenue of the whole country has reached 2.17 trillion Yuan with an increase of 278.7 billion Yuan than that of last year•The 2008 Beijing Olympics and 2010 Shanghai World Fair will continuously promote the development of China’s economySocial Environment•China is a society that values human relations and face-to-face communication. The concept of conducting business activities by phone hasn’t been broadly accepted. •The service style of call center strengthens the customer relationship and is expanding its social foundation in China•The call center for tele-shopping and e-commerce still lacks support from direct users•The social and individual credit system of China hasn’t established at present..

China IT & Software Industry China’s mobile phone market has overtaken the US and is now

the biggest in the world with more than 190 million subscribers at the end of 2003.

China is planning to spend more than $120 billion over the next five years developing its telecom and IT industries.

The number of Internet users in China at the end of 2003 has reached 85 million and will be 150 million by 2005. Now China is the world’s second-largest Internet user base.

China software market is expected to achieve a compound growth rate (CAGR) of 36.9%, reaching US$7.7 billion in 2006.

ERP applications will grow at a CAGR of 32% to reach US$3.6 billion by 2005. The CRM market is expected to grow at a CAGR of 37%, to reach US$2.7 billion by 2005.

China Call Center Industry Snapshot

125,900+ call center seats Compound annual growth rate >16% Industry value estimate US$2.1 billion 60% have been operating for <4 years Non services call centers < 20% Outsourcing call centers < 16% Average CSR salary US$3500 Annual loaded salary less than US$4000 >88% Call Center consulting and training market

>US$500M

China Vs. Worldwide Call Center Industry Infrastructure

0%20%40%60%80%

100%

Global China

27%

73%14.37%

85.63%

System Integration

Outsourcing, Consulting & training

Source ： CTIForum

Market Engineering Seats Forecasts for the China Call

Center Services Market

Source: CTIForum 2004

2004-2006 China Call Center Seats Forecast

0

50000

100000

150000

200000

2003 2004 2005 2006

Num

ber o

f Sea

ts

0.00%

5.00%

10.00%

15.00%

20.00%

Per

cent

座席增长率

ssG

Market Drivers

Rank Driver 1 Year 2-3 Years

4-5 Years

1 Reduction in telephone service tariff High Medium Low

2 Explosive growth in the telecom services market

High Medium Low

3 Establishment of call centers by banking, and finance industries

Medium Medium Low

4 Increasing intensity of competition drives need to improve customer service

Medium Medium High

5 Reduction in call center equipment costs drive demand

Medium Medium Low

Source: Frost & Sullivan

Market Restraints

Rank

Restraints 1 Year 2-3 Years

4-5 Years

1 Cost issues deter potential customers

High Medium Low

2 Companies need to prepare their business for Call

Center implementation

Medium Medium Low

3 Failure to show economic return

Medium Medium Low

Source: Frost & Sullivan

China Call Center Market: Market Restraints Ranked in Order of Impact, 2001-2005

Trends in China Service Center

Market is still relatively immature

China Service Centers tend to be small

China Service Centers not always tightly managed

Customer service most common business functions

Major technology Gaps

Majority are planning to upgrade their Technology

Low uptake of external QA programs

Outsourcing is fastest growing sector

Major issues with accessibility of skilled HR resources

What Are the Challenges Lack of resources/industry know-how on technology and

people management Price competition on system integrators and outsourcing

call centers The doubtful effects for call center consulting The traditional concepts from high level management. Call

Center managers have difficulties on high quality people hiring, training, applying advanced technology, etc.

Internal Process is too long to kick off projects

Trends in Call Center/Technical Support Technology

Multi-Media Contact Center

IP Call Center

Voice Web Portal (Self-Services)

Knowledge Workers

Integrated Contact Centers Across Companies & Cross Border

Channels of Customer Contact are Expanding

Existing Technology

ACD 67% 48% 78%

81% 68% 82% 67% 70%

IVR 28% 33 73 35 51 35 46 43

CTI 26% 28 49 18 28 22 26 28

Customer Contact/CRM Software

42% 33 68 43 45 43 47 46

Workforce Management 18% 10 26 17 19 18 18 18

Speech Recognition 1% 2 14 0 8 4 0 4

Call Recording 15% 30 50 35 49 37 28 35

Voice & Data Recording & Quality Monitoring

5% 0 51 4 7 7 4 11

IP Telephony 5% 2 24 1 16 1 1 7

Predictive Dialer 6% 7 29 2 21 6 6 11

E-learning system 6% 0 30 10 11 5 6 10

Chin

a

HK Indi

a

Mal

aysia

Philip

pine

s Sing

apor

e

Thai

lan

d All A

sia

Coun

trie

s

Source: callcenters.net 2003

Equipment Enhancement PlanPurchasing or Upgrading ACD, IVR & CTI

in the Next 12 Months

0%10%20%30%40%50%

China HK India Malaysia Philippines

Singapore

Thailand All Asian Countries Combined

ACD 21% 6% 34% 11% 28% 18% 31% 21%IVR 16% 10% 42% 8% 35% 18% 25% 22%CTI 16% 8% 31% 9% 9% 8% 16% 14%

CRM, WFM, and PD Enhancement Plan

China HK India Malaysia

Philippines

Singapore

Thailand All Asian Countries Combined

CRM 14% 12% 33% 8% 15% 26% 22% 18%WFM 6% 4% 22% 3% 18% 6% 12% 10%PD 7% 4% 22% 2% 4% 4% 6% 7%

0%5%

10%15%20%25%30%35%

VoIP and Speech Recognition Enhancement Plan

China HK India Malaysia Philippines Singapore Thailand All Asian Countries Combined

VoIP 3% 2% 16% 2% 4% 6% 5% 5%SRS 3% 1% 19% 2% 4% 10% 5% 6%

Purchasing or Upgrading VoIPTelephony & Speech Recognition in

the Next 12 Months

0%

5%

10%

15%

20%

Decision Making

0%

10%

20%

30%

40%

50%

60%

70%


Call Center Manager 38% 64% 18% 30% 53% 29% 28% 46% Finance

manager/Director 7% 15% 9% 19% 6% 4% 6% 19%Marketing Manager 4% 7% 20% 14% 0% 8% 2% 11%

IT Manager 7% 5% 20% 12% 13% 24% 5% 15%Special Project Team 1% 1% 9% 2% 6% 24% 2% 6%

Senior Manager 31% 11% 19% 18% 23% 14% 53% 25%

Call Center Issues Faced in Next 12 Months

0%

5%

10%

15%

20%

25%


Agent’s lack of skills 5% 0% 5% 1% 0% 8% 17% 5% Budget/high expenses 2% 4% 3% 15% 4% 18% 7% 7%

Technology/System Issues 13% 7% 11% 7% 11% 12% 22% 12%

Competition & client retention 5% 3% 11% 3% 4% 2% 6% 5%

Customer Dissatisfaction 2% 1% 5% 12% 4% 10% 6% 5%Insufficient Employees 9% 11% 0% 3% 0% 5% 12% 7%

Turnover Rate 1% 1% 11% 4% 6% 14% 2% 5%

Current China Service Center Operations Issues

Labour shortage Staff Motivation and Training Managing Growth and System integration Need to demonstrate ROI Sunk Costs restraining purchases Lack of management skills/experiences Poor technology/system issues Standardized operation procedures CRM implementation Language Capabilities

95Teleweb SCP KPIsSCP Elem

Name of Element SCP Metrics 95Teleweb Metrics

3.02 Response Time 80% within 5 minutes 80%/20 seconds

3.03 Initial Call Back Response Time

80% customers get callback within 2 hours

24 hours

3.04 Resolution Time Company Specific 3 min

3.06 First Contact Resolution Company specific >=97%

3.07 Customer Abandon Rate <=8% <=4%

3.08 Electronic Support Request Acknowledgment

80% within 1 hours NA

3.09 Electronic Support Response Time

80% email get response along with potential resolution within 2 hours

24 hours

2004 Audit Results

Benchmark Comparison

Characteristics of China Support Centers

1. Corporate Culture and Environment2. Employee Training, Staffing, and Incentives3. Levels of Customer Service4. Incorporating Customer Feedback5. Interdepartmental Relationship and Consistency

Across Channels6. Measuring Customer Centricity and Links between

Contact center Performance and the bottom line7. Tools and Technology

1. Corporate Culture and Environment

Motivation for the organization to become customer centric, including barriers that the organization had to overcome

Customer service philosophy How culture has aided or worked against the contact

center’s focus on customers How company leaders internally demonstrate their

commitment to customer centricity How companies ensure that each contact with the

customer is made with warmth and appropriate intimacy

Individual responsibility in the contact center for resolving customer complaints

2. Employee Training, Staffing and Incentives

Developing necessary qualities in customer-centric technical support agents

Attracting, hiring, retaining, and motivating support talent that have both people skills and technical skills

Optimizing staffing levels in the contact center to provide the level of customer service that customers desire, while balancing the company’s cost and resource requirements

Ensuring the contact center performance management system supports the employee and management behavior necessary to deliver the optimal customer experience

3. Levels of Customer Services

Providing mass customization Segmenting customers and determining levels of

service Managing growth in the customer base Exceeding the expectations of customers Explaining service commitments to customers

4. Incorporating Customer Feedback

Soliciting customer comments Soliciting perceptions of competitors’ performance as

well as of company performance Determining the attributes that contribute to customer

loyalty Demonstrating a link between a customer-centric

approach and increased customer loyalty Sharing, posting, and updating contact center

performance measures Having a future orientation toward customer needs

5. Interdepartmental Relationships and Consistency Across Contact

Channels

Contact center relationship with other areas of the company

Process for resolving conflict between departments Assurance that customer contacts and service delivery

are consistent across all contact channels The process by which front-line service collaborates

with back-office process

6. Measuring Customer Centricity and Links between Contact Center

Performance and the Bottom Line

Measuring success in the contact center Ensuring customer contact representatives and center

measures are balanced Balancing efficiency measures with softer measures of

customer centricity Tracking internal metrics that are predictors of

increases or decreases in overall company success or customer satisfaction

Measuring ROI on customer-centric initiatives Constructing a business case to justify the strategic plan

for customer centricity

7. Tools and Technology

Existing technology in place Assurance that everyone in the organization has

a complete picture of the customer at all times Role of knowledge management systems to

enable customer centricity Self-service technology

Future Directions of China Call Centers

More centralization – to achieve cost savings and increase efficiencies

From cost center to profit center – Inbound to outbound Incorporation of new technologies/applications

Speech recognition and web collaboration: investigations now, implementation next 12 to 24 months

CTI: often linked to longer term CRM implementations. CRM: some planning & implementation over next 12 to 24

months VoIP: limited planning at present, seen as longer term (2-4

years) for implementation. Quality concerns delaying adoption



Challenges Trend in Call Center Technology China SCP Experience Characteristics of China Support Centers China support Centers SWOT Analysis Leading China Outsourcing Call Center -

95Info Inc. Introduction

China Now on The Radar

• Distrust of legal system• U.S. ignorance/perception of China• Weak English skills• Slower development of business relationships• Corruption/piracy /trust• Critical shortage of skilled IT resources• Management of internal opposition to WTO

reforms

• WTO opening up markets• Very large domestic market• 2008 Olympics• U.S. investment focus• Cooperation with India / Accepting Indian

providers• Finding creative ways to take on large

projects• Mass producing skilled IT professionals

Threats/Risks

• Political stability. • Strong government support• Very large domestic market• Economic environment• Attractive after entry into WTO• Non-Latin language skills• Infrastructure – leapfrogs• Hong Kong — gateway for the more timid• Cost of human resources: 20-40% cheaper

than India• Reverse brain drain• Strong Linux skills

• Intellectual-property protection and piracy• Education level• Lack of process• Poor levels of English• Poor technical innovators• IT companies small• Weak marketers• Weak R&D budgets and efforts• Lack of international name brands • Lack of innovative software products

Weakness (Challenges)Strengths

Opportunities



Challenges Trend in Call Center Technology China SCP Experience Characteristics of China Support Centers China support Centers SWOT Analysis Leading China Outsourcing Call Center -

95Info Inc. Introduction

Company Overview Founded in 1998, joint venture between

Teleweb Inc. and CPTT group.

700 staff (CSRs, Supervisors, managers, project management, account management, CRM developers, IT technician) and some offshore management

Regional sales (Beijing, Guangzhou, Shanghai, Xian)

High-profile and active board of directors

High-profile brand clients (~200)

Client Lists:

Company ProfileA global provider of IT and business process outsourcing solutions to Fortune 1000 corporations, Chinese enterprises, and service organizations.

Ability to integrate customer services into a flexible, total single-point-of-contact solution is a key element of 95Info’s success.

Strong commitment to quality and has been delivering IT service solutions for over 6 years in China.

Partnerships with some of the best-in-class corporations provide 95Info with unparalleled experience in providing IT support solutions:

Help Desk/Call Center Services

Technical/Management Staffing

Professional Services/System Integration

Training Programs

Internationally Recognized Client Base affording significant growth potential and highly respected references

Multiple Service Offerings that provide expanded business opportunities with existing clients for new services

Technically Proficient Employee base that enables us to compete more effectively for sophisticated IT support services

Recognition for Delivery of Quality services in the form of ISO9001:2000and SCP certifications, the international standard for quality assurance and operating consistency

Advanced Technology infrastructure featuring state-of-the-art call center enabling the company to maintain a leading provider of the IT support services

Strong financial position and solid balance sheet

Key Competitive Strengths

95Teleweb is leading the Pack(source : Anderson Consulting)

Unicom

High

Low Company Resources

High

Competition Landscape in Beijing & Shanghai

ITS

800 Teleservices

Bell South

Bertelsmann

@network

TCY

Haier

ChinaMotion

Compaq-Start

Shanghai Post

& Telecom269Hong Fan

Great Infotech

Size of CircleCompetitors’ current market performance

Company ResourcesBased on parent company size and resources and connection with industries in China

Call Center ExpertiseBased on call center operation experience ,outsourcing experience, and breadth of services managed

Operation in Beijing Operation in Shanghai Operation in both Not in operation yet

CCID

95Teleweb

Expertis

e

SykesShanghai

Call Center & CRM leading Service Provide– Industry Scope: Telecom, Insurance, Securities,

Banking, IT, Auto, Pharmaceutical, Durable Goods Client list: Microsoft, Nokia, Alcatel, Nortel, D&B,

China Unicom, China Life Insurance, VW, Legend, Tai-Kang and Tai-Ping Insurance, Sony-Ericsson, China Railroad Telecom, China Telecom and China Netcom, etc.

World-Class Service: 2004 & 2005 China Best Outsourcing Call Center Service Award.

Continuous development and update of solution packages

Proven management team to deliver satisfactory services

Professional team to keep close ties with clients/prospect

Comprehensive and sophisticated call center training curricula and certification programs

Achievements To Date

Market Positioning Multi-channel Customer Service solutions: Vertical Markets

High-tech Manufacturers Automotive Manufacturers Telecom/Financial

Business Model BPO Consulting/Training/System Integration Enterprise CRM Application implementations

Solution Suite Customer Relationship Management Telemarketing with e-fulfillment

Quality Awards and CertificationsISO9001:2000 Certification

First outsourcing company in China to receive ISO certification CFIP:2004 Best China Outsourcing Call Center Award

The first outsourcing company to receive MII CFIP the Best large call center award, the best call center manager award, and the best call center service agent award

sina.com Survey 2004: Five star awards among 21 automobile care line centers

Zol.com survey: 2004 Number 1 and 2 best mobile handset call centers among 20 mobile call centers

Sony-Ericsson 2004 Number 1 best call center among global 35 call centers

“The number one call center outsourcing service provider in China based on market share, company resources and expertise.” - Anderson consulting, 2001SCP certification: 2004

First outsourcing call center in China to seek SCP certification

“One of the leading call center service providers in China” – IDC 2003

Our Impressive Customer List

Thank You!

AQ&Q U E S T I O N SA N S W E R S

Baumin Lee

(86) 13701215695 (86) 56801060 ext. 5308

[email protected]

the state of service & support in china

Documents

22x1ash support

introduction technical

state of service support

technical manager1988

technical director1997

center market statuschina

worldwide bpo market

compound annual growth