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Dispelling The Misconceptions In The Call Center Business

Feb 24, 2008
The Philippines is currently the next hottest destination for business process outsourcing after India. There are several call centers and other business process outsourcing ventures operating in the country right now. A proof of this is when you look at the classified ads section of every Philippine newspaper, you can notice that more than half of the available jobs pertain to business process outsourcing. Another proof of this is the growth of our export sector despite the dwindling dollar. With these in mind, it looks like getting into the call center business will be 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.) Operating a Call Center still follows the traditional business processes - Contrary to what most people believe, Operating a call center does not spell instant big bucks in a short period of time. Just because the demand in the market is so big and because you are earning dollars does not necessarily follow instant profits.

According to the study presented to us, it is only in the second year that the call center starts to profit. In the first year, losses or a break even has to be incurred first. This is similar to any kind of business. You can't expect to profit immediately. There is a window of time where sacrifices have to be made. Just like any traditional business you have to have a good management team. A lot of small time call center operations have been shutdown due to bad management. Most importantly your Human resource has to be very good as this is one of the most important departments of the 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.

With all these in mind, before you jump into the bandwagon of the business process outsourcing industry especially call center operations, think before you leap !
About the Author
Zigfred Diaz may not write about business process outsourcing all the time, but he writes on business and entrepreneurship from time to time. He also blogs about investments, money management and How to invest in the Philippine stock market.
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