Monday, February 4, 2013

Call Centers...The Story So Far....

I was recently asked by a someone for an upcoming project on contact centres, for the date of the first call centre.
This question stumped me.  I knew of some early ones, but what was the first?  I have done some research and the early results are quite surprising.
The creation myth
Like many revolutionary technologies, the call centre has a creation myth.  This states that call centres as we know them today originate from the Automatic Call Distributor developed in 1973 by US firm Rockwell (the Rockwell Galaxy) to allow Continental Airlines to run a telephone booking system.
As it turns out, this was all good marketing baloney.  Rockwell did indeed develop their ACD in 1973 and it was installed that year.  But it certainly was not the first.
Rockwell’s claim to the first ACD installation may be inaccurate, but they were certainly amongst the first and most successful manufacturers.

Early Automatic Call Distributors (ACD)

But the basic features of the modern call centre can be recognised almost ten years before this, in the mid-1960s. Private Automated Business Exchanges (PABX) began to be used to handle large numbers of customer contacts.
The Oxford English Dictionary defines the term ‘call centre’ as follows:
call centre n. an office staffed and equipped to handle large numbers of telephone calls, using computer technology to assist in the management of calls, supply of information, etc.; esp. such an office providing the centralized customer contact and customer service functions of a large organization.
That computer technology is the Automatic Call Distributor, and its development is closely linked to that of the call centre. ACD systems allow calls to be filtered and assigned to the best possible agents available at the time. An algorithm determines which agent receives which call.
The invention of ACD technology made the concept of a call centre possible. Essentially it replaced the human operator with a far more flexible automated system capable of handling much greater numbers of calls.
The first call centres
The first ACD systems would probably have emerged in the 1950s to handle central operator enquiries at the main telephone companies.  To date we have not been to find any concrete evidence of this so far.

Early adopters

By the early 1970s PABX systems were beginning to include ACD technology, allowing the development of large-scale call centres.
In May 1972, the New Scientist magazine reported that Barclaycard had installed a Plessey PABX at its Northampton processing centre. This included an ACD to allow up to 72 enquiries to be dealt in cyclic order. The agents on this system were able to check the credit card records of Barclaycard’s 1.6 million customers via a microfiche reference system.
At the same time, Barclaycard’s competitors Access installed a computerised system allowing very fast access to customer records. It was an indication of the future direction of contact centres.
In 1972 Gas World reported the installation of an ACD system at British Gas in Wales.  The system had the capacity to handle up to 20,000 calls per week.  This may have been the first multilingual system as it handled both Welsh and English calls.  It was reported that Welsh-speaking customers in Aberystwyth at first found it strange to be telling someone in Wrexham of their problems.
Big names enter the market
Throughout the late 1970s and 1980s technological advances consolidated the importance of call centres to business. Many of today’s big names established themselves in the UK during this period.
Datapoint began working with TSB Phonebank (now Lloyds TSB). [Does anyone know the date when TSB Phonebank started ?]

In 1985, Direct Line was founded by Peter Wood, becoming the first company to sell insurance entirely over the telephone.
Call centre technology allowed these companies to base their entire business model on telephone sales. In the USA, Aspect Telecommunications was founded by Jim Carreker.
Aspect’s systems improved upon the early ACDs. They allowed calls made from touch-tone phones to be routed more efficiently, by distinguishing between types of calls and connecting them to specialised teams of agents. This cut down call waiting times, and allowed call centres to deal with an increase in call volumes brought about by the introduction of toll-free phone numbers.
Aspect’s flagship product was the Aspect CallCenter, somewhat fittingly, as the company went on to become one of the world’s largest manufacturer of dedicated ACDs.
Aspect entered the UK market in 1989, with Microsoft as their first customer. The deregulation of the UK telecoms industry led to a drop in service costs, and as a result the UK contact centre industry became larger than in any other country except the USA.
ACDs systems fuelled innovation, such as the launch of First Direct in 1989. First Direct was the UK’s first direct-banking company, and proclaimed itself ‘the future of banking’ with an unusual television advert made to seem as if it was being broadcast from 2010.
When the term ‘call centre’ was created…
The OED lists the earliest published use of the term ‘call centre’ as being as recent as 1983, in Data Communications, in this sentence:
Each of these ‘*call centers’ is staffed with agents who work with Honeywell intelligent terminals, enabling them to quote rates and compute discounts given to large users.
Dot com mania
In the 1990s the call centre industry continued to grow, spurred on by the rise of the internet. From 1995 onwards internet-based ‘dot com’ companies attracted vast amounts of investment from venture capitalists excited by the potential for rapid growth offered by the online economy.
As websites became the central point of contact and sales for an increasing number of companies, call centres were essential in dealing with customer service and technical support. Unfortunately it didn’t last, and by 2001 the ‘dot com crash’ saw many internet-based companies go bust.

Rise of the offshore call centre
The call centre was still on the rise. By 2003 the industry consisted of 5,320 call centre operations employing 800,000 people in the UK. 500,000 of these people were working in agent positions. The industry had grown by 250% since 1995, and was still growing.
The early 2000s saw a trend for large companies to transfer customer service departments overseas. Cheaper labour costs and in some cases better skills in the workforce made offshore call centres attractive to businesses seeking to cut costs.
Locations in India, the Philippines and South Africa aggressively marketed themselves as offshore call centre destinations. India was particularly popular, as a large number of graduates available for call centre work made for cheaper and technically able agents for technical support phone lines.
Late 2000s: a backlash against offshoring
Offshoring slowed the growth of the industry in the UK. But few companies moved their whole customer service operations overseas, and by midway through the decade a backlash had begun. Customers sometimes had trouble understanding the English spoken by overseas agents. Companies with large offshore call centres attracted negative media coverage for taking jobs away from the UK.
Over the last three years some companies have actively advertised the fact that their call centres are in the UK. NatWest launched an advertising campaign in 2007 based around guaranteeing that customers would speak to agents in the UK rather than overseas. Some companies have also moved customer service operations back to the UK.
The call centre has now been an invaluable business facility for three decades. With the recent rise of social media and technology that may allow call centres to become virtual networks of homeworkers linked by cloud computing, it appears customer service is swiftly evolving.
Call centres are a vitally important source of jobs. As Call Centre Helper reported recently, new figures from ContactBabel show that more than one million people are now employed by contact centres in the UK.