Busting The Myths In The Call Center Business

Filed Under Business |

by Zigfred Diaz

Next to India, the hottest destination for business process outsourcing is undoubtedly the Philippines. A lot of call centers and other business process outsourcing ventures have cropped up all over the country. More than half of the available jobs advertised in the newspapers are business process outsourcing jobs. Instead of being stagnant because of the dwindling dollar, our export sector has exhibited growth due to business brought about by business process outsourcing. With these in mind, it seems that putting up call center seems very lucrative.

With these developments in mind, we initially thought of getting into the call center business. However as we extensively studied the call center business there are several things that we learned that dispelled our misconceptions about call centers and they are the following:

1.) A Call Center business still follows the traditional business processes - A misconception about putting up a call center business is that it spells instant big bucks in a short period of time. This is definitely not true. While it is true that the demand in the market for call center is so huge, however it does not necessarily translate to instant profits.

A feasibility showed to us that it is only in the second year that the call center will start to profit. During the first year the business has to incur losses or only reach a break even similar to any kind of business where it is not expected that you profit immediately. Sacrifices have to be made within a certain period. You also need to have a good management team just as in any other traditional business. A lot of small time call center operations had declared bancruptcy due to mismanagement. What is most important also is that you have a good Human resource department as this is often referred to as the heart of call center operations.

2.) Running a Call center requires intensive Capitalization - There are those who believe that putting up a call center requires only a very small amount of. They think that you can just just rent a small space and link together a bunch of computer in a network and to the internet and then start operating. Operating a call center is not as simple as most people think. You have to burn a lot of money. We were told that the dialing software alone cost more than a million pesos. Aside from the computers themselves you will have to get licensed copies of Windows XP plus you have to set up other stuff like your server, ensure that you have a good, stable internet connection and buy the i.p telephones that agents use.

3.) Starting a call center requires you to intensively market it - There are those who think that since there is so much demand for call centers if they build it, clients will come. This kind of mentality is what causes other small call center operators to close down. The demand is not just for any “call centers” per se, the big demand is for reputable call centers. This means that you have to project yourself as somebody who can deliver services that their clients wants them to deliver. Since you are new in the call center industry, you will have to work hard to establish yourself as “reputable.”

Big players in the industry have no problem with that. Clients immediately sign up to them because the have already established a name. But what about small players ? They usually only get the outbound. (Outbound refers to call center agents calling persons abroad trying to sell something or offering a service while inbound refers to catering to the needs of already existing clients of big companies who are outsourcing their services) There is money to be made in outbound but the problem is most outbound agreements are usually performance basis. So if your agents are good at selling or convincing people to buy your client’s products or services than you make money. If not, then you loose. It may take some time for small players to establish themselves as reputable and trustworthy with the outbound before clients entrust them with the inbound.

Before you join the bandwagon of the business process outsourcing industry especially call center operations keep all of these things in mind.

About the Author:

Zigfred Diaz may not blog about business process outsourcing always, but he blogs on business and entrepreneurship from time to time. He also has some great articles investments, money management and How to invest in the Philippine stock market.