Ireland isn’t going to be the next Calcutta or Mumbai. It isn’t trying to be the back office customer care contact center Mecca of the Western world. Which is probably just as well.
What it does want to do is build its position as a leading European provider of the next business stage up from contact centers – contact center plus, if you like – offering serious technical support and a whole range of services way beyond giving simple solutions to straightforward customer inquiries. Some are operated by outsourced suppliers but most in Ireland are managed by the companies they serve.
Here, staff are dealing with the entire internal communications system for vast, multi-national operations. They are handling not only traditional Helpdesk calls, but providing technical support to their own staff and business-to-business, dealing with HR issues like recruitment and sick leave, payroll systems, company accounts as well as in-company communications about policy and strategy, staff and customer information and the intranet function.
In its now sophisticated telecoms sector, Ireland boasts 66 contact centres for a range of companies that include 3Com, American Airlines, AOL, Dell, eBay, GE Insurance, Google, Hewlett Packard, IBM, MBNA, Oracle, Starwood Hotels, Symantec and Xerox – and that’s just an arbitrary sample.
These centres – Europeans call them Shared Services Centres, but most Americans will be more familiar with the term Managed Services – are where Ireland sees its growth potential, though the Irish have no intention of turning their backs on ordinary contact center investments serving banking and catalog customers for example.
Technology is changing the product. Just answering the phone isn’t enough these days. To be successful, the centers need to serve the world in a host of functions.
A Customer Backlash May Boost Ireland’s Efforts
A recent survey of 1,000 UK adults by contact center industry analysts ContactBabel found that 142 had switched supplier because their existing one used an offshore service, while three in four said they felt more negatively towards their supplier if they used offshore agents.
Steve Morrell, principal analyst at ContactBabel said in the report: “If UK businesses do not address the concerns of their customers, the level of customer defection will increase and their profits will decline further. ”
Therein lies a problem – and for Ireland, an opportunity. In India, university graduates, attracted by the prestige of contact center jobs, earn perhaps ten times the average wage but still cost their employers only a tenth of a European or US-based operation.
Hypothetically, that means a typical bank with 12 million customers and revenues of $400 per customer each year would save over $17 million by replacing 1,000 of its expensive call centre staff with 1,000 in India. The downside is that same hypothetical bank would need only about one per cent of its customers to defect to another bank in protest to have lost all those savings instantly.
“Ireland is the only native English-speaking member of the Eurozone,” points out Brendan Haplin, International Media Manager at the IDA, the Irish government agency which seeks inward investment from around the globe. “Ireland offers a first class advanced telecommunications infrastructure that includes vital bandwidth and hosting capacity, and we back this all with solid IDA support, both financial and practical.”
The Appeal? Language and Low Taxes?
The landscape in Ireland – corporate and cultural – has attracted far more than its fair share of not only European but US business as well. “Ireland has changed radically from 10 or 20 years ago,” Haplin says. “We now have between 60 and 70 shared services centers that are multi-lingual, pan-European and trans-Atlantic.”
We’re talking about major companies the size and scale of IBM or Dell. On the whole, these organisations are extremely happy with the quality of staff, the quality of life and the delivery of service they have found in Ireland. They bring in selected technical experts from the States and then use locally selected personnel to develop and expand the skills base.
These big operators are evidence of success, not only because they stay there but because they can point to significant cost reduction, increased efficiencies, better quality customer service and a real drive in sales which ultimately delivers better returns to shareholders.
Ireland, adds Haplin, offers an appealing package, complete with low corporate tax of just 12.5% It works hard to minimise bureaucracy and instead to engineer a low-risk, quick start-up, high-performance knowledge economy. “We have a well developed environment for call center and shared services operations because we have all the basic ingredients in place: the skills and knowledge, the experience and availability of IT-literate and multi-lingual staff and the global strategic fit that provides facilities for companies to ‘follow the sun’ on a 24-hour model.”
A Population Increase Bodes Well for Employers
While Ireland may merit a spot on a company’s shortlist of potential offshore locations today, what about tomorrow? Will the right talent – an enough of it – be available? According to Dr William Harris, Director General of the Science Foundation of Ireland, the answer is a resounding ‘yes.’ “The key element in creating knowledge is intangible assets such as expertise, insight, talent, passion, imagination and persistence.
“Investing in such abilities, we believe, is the best predictor of success Ireland could have,” Harris adds. “Ireland has a wealth of young talent ready to make science and engineering the next great wave of Irish innovation.”
Ireland is one of very few European countries showing an increase in its population, and some 260,000 people, 12.6% of the total workforce, are employed in business services. While the population of workers declines in other countries, boding real problems up ahead, Ireland looks to growing a youthful talent pool on a par with that of the US.
[SIDEBAR] The Irish Landscape: Poised To Compete
Ireland has changed and changed dramatically. Gone are those sad depictions of lovelorn girls waving their tearful goodbyes to men who were set for a life in the New Worlds of America or Australia? They’d make their fortunes and return to build a castle and raise a family in Kilkenny.
In the last couple of decades the Celtic Tiger has been thrusting its way through the jungles of the world economy. He’s getting plumper, healthier and more voracious with every paw print he makes.
The Environment Is Hospitable
The quality of life is a fabulous balance of stunning scenery and great leisure options. Golf courses, angling, cycling, camping, hiking and finding deserted bays along the rugged coastline are just a few possibilities to ponder.
Real estate is cheap (except in central Dublin) and land plentiful. Gasoline is about half the price it is in the UK and corporate tax of 12.5% sits alongside the US’s 39.5% or the UK’s 30% Though Value Added Tax runs at 21 per cent, it won’t have much of an impact on companies whose profits are based on export outside the EU and the government has simplified the paperwork. If 85 per cent of your goods or services are for export, then you will be exempted, so you don’t have to fill in forms to reclaim VAT.
The Irish are renowned – and rightly – for their warm welcome, and that extends not only to a pint of Guinness with a passing stranger but to those who have come to stay longer.
Unlike some of their European neighbours, the Irish don’t resent the arrival of migrant workers but welcome them with open arms as a real and useful addition to the native skills base.
Location and Politics Provide a Counterbalance
Air travel is reasonable but needs more development. The main airport is close to Dublin and offers about 100 direct destinations worldwide. There is a second international airport at Shannon and smaller mostly short-haul facilities at Cork, Belfast and Londonderry. Most international flights are out of Dublin or Shannon.
In terms of moving goods, ferry services are strong but the distance from mainland Europe makes them slow. Although a crossing from Dublin to Holyhead on the Welsh coast is less than two hours, Normandy is 19 hours away. From Belfast and Larne in the north, there are faster crossings to Scotland and England.
A long history of a sluggish, agricultural economy meant Ireland was slow to move into the 20th, never mind the 21st, century. Outside of a few main cities, it remains a wonderfully unspoilt but also under-developed rural society.
Ireland came into the European Union with Objective One status, meaning that its under-developed economic state entitled it to a whole package of major infrastructure grants to help it move forward rapidly. Its heavy rural culture saw the benefits of the Common Agricultural Policy, instantly enabling farmers to access guaranteed markets and guaranteed prices for their produce, even if a lot of it did end up dumped on butter mountains and in milk lakes. Almost half of the EU’s entire 44.5 billion Euro budget is spent on agricultural subsidies of one kind or another.
The maze of minor country roads lend Ireland much of its charm but aren’t much use for heavy lorries carrying large loads of produce to marketplaces across the world. European Union money helped extend a main road and motorway infrastructure that was essential for economic growth.
All of this helped encourage new investors from other countries to set up facilities in Ireland. The government encouraged them with appealing packages that drew in the likes of Dell, Xerox, Baxter International, Hertz and a host of others before they even got onto contact centers.
But all that Eurozone assistance has gone now. The surge of the Celtic Tiger, the reality of economic growth, has forced Ireland to move from being subsidised by the European Union to being a subsidy provider to other emerging nations, including some of the 10 new countries whose joining has taken the European bloc to 25 in total.