Is the call center business still hot?

Every entrepreneur knows about the futility of moving with herds. You see a herd, get worked up by how profitable they look as they come down the highway stampeding all the way and you move quickly to join only to realize that you jumped in too late at too high a cost.

There’s not a hotter business idea these days that will compare with call centers. But can 10-seaters slug it out with the big boys? If you’re a Johnny-come-lately, do you still stand a chance?

Joji Ilagan Bian, a businesswoman from Davao says “Smites” or small and medium-scale IT enterprises are sprouting up and they are banding together to compete with big companies.

“With less resources, it is hard for us to launch campaigns and promote ourselves to clients because most SMCCs rely on brokers who may turn out to be unreliable.”

For this reason, Bian’s firm joined forces with similarly situated SMCCs and formed the Philippine Call Center Alliance Inc. or PhilCall in October 2006.

So far, PhilCall has 25 members–with an average of 40 seats each–including 999 Inc., Synergia Cybercare Inc., VirCommServe Inc., Right Technicomm Inc., Sysgen Outsource Inc., Tech1 Internet and Farmout Central Intouch Inc.

Bian, who is PhilCall interim president, explains that the association was meant to advance SMCCs interest mainly by curbing the problem of dealing with brokers.

“At this early, PhilCall has been able to undertake initial efforts in representing members when making campaigns,” she says. “This move saves our members from the prospect of not getting paid by clients because of unreliable brokers.”

To strengthen PhilCall and make it more effective, the group has also embarked on a campaign to enlist more members with the goal of being able to represent a total of 10,000 seats.

“Our aim is also to professionalize SMCC operation so that we can establish a good reputation that is based on high standards of services as well as of ethics,” Bian says. “We want to flesh out SMCCs from the underground, so to speak.”

That’s an effort that’s much needed in an industry where players are mainly motivated by getting as much return while the going is still good.

Why do I say that? A few years ago, I interviewed many big, medium-sized and small players in the industry and have seen many fail and close shop because they came into the business just to get a slice of the action. Result? Expectations of easy money fizzled as soon as the nitty gritty of doing the business reared its head. The difficulty of marketing their services to clients overseas, managing quality of contact agents, backend operations, IT requirements, rental and office space – it’s not really a walk in the woods. An owner of a 15-seater told me he hasn’t even seen some of his clients personally.

“So, how do you know you will get paid?” I ask incredulously.

“We don’t — until the billing date arrives.”

What a way of doing business. 

Entrepreneurs who join a herd fail because they are just after the gravy. Entrepreneurs who build a business because it’s their passion and it’s where they can contribute to society stand a better chance. They think through it, create strategies, and they are prepared for the tough moments.

As another successful contact-center owner told me, it’s still a hot industry but it takes a lot of hard work now that the first phase is over and somebody who comes in without a good strategy can kiss his investment goodbye in more or less a year.

 This call center agent will probably get a lot of irate callers . Photo credit: AFP

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