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Company: ITESA People ConvergenceTM
Position: CEO and Managing Consultant
Web Site: www.itesa.com |
Expert areas:
As CEO of ITESA People ConvergenceTM, Keith Fiveson embodies a new vision in actionable, data-driven (IQ), people focused (EQ) sourcing services, to radically improve the efficiency and effectiveness of an operation from start to finish. Having founded the company on the principle that millions of dollars and time are wasted every year in misguided sourcing decisions, Mr. Fiveson has since overseen the building of the ITESA vision, team, and partnerships globally, and has a client legacy with multi-million dollar sourcing engagements with clients like McGraw-Hill, GE, Apple, Minacs, Microsoft and many others. | |
Prior to ITESA, Mr. Fiveson ran the global business development organization at CosmoCom (RNDC), serving as an executive team member who developed multi-million dollar deals with British Telecom, SAIC and Siebel. He also served as the Director of Call Center Solutions/Consulting at Concert, the British Telecom/AT&T global venture, running a team of consultants that focused on developing call center people, process and technology infrastructure in over 40 countries. Previous to that, Mr. Fiveson held senior executive roles in Call Center Consulting at MCI Communications, now Verizon, helping drive the firms Enhanced Voice Services (EVS) platform and value-added capabilities, with accounts like American Express, Citicorp, Merrill Lynch, GE, Aetna, and other fortune 500 companies.
Mr. Fiveson is a published industry leader, holds many advisory positions, and is an active member of the American Teleservices Association, Direct Marketing Association and Society Of Consumer Affair Professionals. He has experience in channel marketing, direct response marketing, sales culture, business development, and manufacturing, having founded and sold companies in these disciplines.
Global site selection Q&A
With the growing number of call centers, contact centers, business process outsourcing (BPO) operations, IT-enabled services and outsourcing operations popping up around the world, you would think location selection would be an easy task. But, as anyone who has been assigned the duty of site selection knows, it is quite the contrary. The process of selecting a location for a new call center or business process operation can be a confusing process. To make matters worse, the location selected may prove unsatisfactory due to the shortcomings of the selection effort.
Good location decisions require a careful and systematic analysis of the facts. At the heart of the process is a systematic approach, which recognizes the requirements of your company's people, its operation and ability to perform. Consequently, every site location opportunity should begin by taking a close look at the operation to clearly define project requirements. From these requirements the best location can be selected from among all the possible locations. It's as simple and as complex as that! For years I've been accused of "asking too many questions". As such, our global consulting approach, which is recognized by site selection professionals globally, uses the 5W's and an H methodology to bring a firm through a 15-step process. Teacher always said "trust the process", so here goes.
1. Why and what are we locating?
As the manager you must decide what the project is all about. For example, the strategic direction of the firm might require another operation for growing demand for a particular product or service. Your new operation will supplement current voice, processing or data support needs. Perhaps your new operation will help accelerate current processes and back office production. Or are you seeking expansion into another market and looking for an operation to provide regional support? The initial stage of the project will outline and define both short-term and long-term considerations. Short-term issues include the expected startup date, labor pool requirements and call/process volume needs to determine the number of seats, building size, etc. Long-term issues include the scope of future expansions and voice or data integration requirements with other global operations in different locations.
2. Who is leading the charge? (Project team)
Be it a build, buy, outsource or a new operation the purchasing, finance, marketing, IT management, human resources, and operations groups need to be involved. Having everyone on board at the beginning will ensure that each of these disciplines is involved in the selecting and expansion methodology for the new location. The assigned "Team Leader" will outline responsibilities for gathering and analyzing data and for presenting results to the rest of the group. Pick individuals that are good leaders, problem solvers, and will keep the project on schedule. It is essential that team leaders are given sufficient time away from other tasks to manage the project. Typically an average of 30 hours per week over the course of the project will be spent on managing and development. The early stages of the project will define requirements, due dates and thresholds for mid-term project review, and then again in the later stages when a final selection is made. Don't overload team members with unrelated "busy work" not relevant to the objectives.
3. When? (Project scheduling)
Realistic goals mean that you don't get too ambitious with your move-in schedule. A good rule of thumb is that you budget six to eight months from the beginning of the site selection effort to find the right location, build-out, buy or outsource. Start with the end in mind to effectively manage time, financials and commitments. Work backward from the start-up date. Determine how much time is available for site selection, to better understand what needs to be fast-tracked, or requires additional resources (such as more employees on the site selection team).
4. The what or where? (Location criteria)
What drivers are important for location selection? This strategic question will change based on the company's business, vertical or horizontal focus. It's not just about low cost labor, customer access or close proximity to recreational activities for clients or executives. The availability of a skilled workforce, technology infrastructure and long-range geo-political or economic incentives will also drive the process. All possible factors, people and departmental needs must be considered. Involve all members of the team to develop a list of factors they believe are important to the success of the operation. Remember, only factors that vary geographically are of interest here. For example, transportation costs, government incentives, availability of people (education, proximity) are important. The costs for people to support the operation are important as it varies geographically; expatriate salaries, local managers, etc are also included in the analysis. Have the team meet frequently to review and refine the list of factors. The objective is to weed out factors that are not necessary (proximity to beaches or recreation may be in this category) and identify those factors that will truly drive the location decision. Most companies will find that a relatively small number of factors will emerge, perhaps as few as 10.
5. How to measure? (Research methodology)
Quantitative and qualitative measures are drawn for a macro-level analysis to determine approximately where in the world the new facility should be located. Looking at key factors such corporate strategy, expansion plans, labor costs, transportation costs, electric power costs, and taxes. Intangible factors such as unemployment rates, university research and quality of life relating to the retention or attraction of workers may be considered here as well. Once a favorable area is defined, the next phase is a micro-level analysis to determine the best community and building or land site for the proposed facility. The objective of this effort is to determine the community and specific land or site that best satisfy the operating requirements of the proposed facility. Cost factors examined may include the cost to buy or lease a facility, utility infrastructure and worker training. Intangible factors include utility reliability, site neighbors and potential for future growth. Again, quality of life issues such as schools and housing may be considered along with labor/management relations and the attitude of the community toward your particular project. Analysis of data should involve the use of spreadsheets for both phase 1 and 2 studies. Design spreadsheets around key factors defined in the location criteria. Spreadsheets promote "apples to apples" comparisons of different locations. In addition, study progress is measured at a glance by counting the number of blank cells.
6. Where? Look at specific cities
As we saw in Part 1 the objective of Phase 1 is to narrow the search from a large region (e.g. Asia Pacific region) to a smaller geographic area (e.g. portions of India or a multi-state area like Mumbai, Pune or Bangalore). Trial cities are selected for this purpose. A trial city is selected to represent the metropolitan area and the geographic region surrounding it. Project requirements are applied to each location to determine geographically variable operating characteristics for the proposed center. In a typical study 5-10 trial cities are selected. In selecting trial locations, consider such factors as volume and sources of people, resources and support requirements for the location. Limit trial cities to that part of the country that is most logical. For example, if language accent is an issue, select a group of cities in northern India versus southern India. You would not want to have a group of cities in a country that could not support the English language or its variations.
7. What? Gather data
Part 1 ran through a list of data points required - dictated by the location criteria established during internal meetings - much earlier in the process. Much of the data will come from state and local economic development organizations, either as printed material or via the Internet. Contacts for these organizations can be found in site selection magazines or through reputable organizations. It is easy to gather data. However, gathering good data remains an art. Care should be given in requesting information to ensure that the data points are uniform and comparable from country to country and state to state. You may wish to tap government publications, seek out labor and wage statistics and talk with local companies in the area to understand the labor cost estimates, benefits, cost of living, etc.
8. Where? Analyze all of the data in-house
In many cases, data will likely roll in faster than it can be processed. Don't panic; draw on the expertise of team members to process information into various spreadsheets. The representative from human resources should handle labor data while someone from operations can process technology or infrastructure data. Keep an open eye for gaps and inconsistencies in the data and then remedy the shortcomings by restating the questions and asking the economic development organizations you're working with to focus on the particular problem. If you still have gaps, don't be afraid to ask other companies in the areas for input. This is a small industry and people are willing to help others.
9. How? Recommend favorable areas
When you are ready, bring together an executive meeting to review the findings of the favorable area site analysis. In addition to recommendations as to the geographic area most favorable for the new center, this meeting should include a complete review of your project requirements, location criteria, and a discussion of how the research methodology was established. Proceeding to Phase 2 without a consensus on these items is not recommended. The Phase 1 study has as its objective the clear identification of a geographic region, which best satisfies the operating requirements of the proposed contact center or BPO facility. The purpose of the Phase 2 study is to identify the best locale for the new operation. Steps 10 - 15 are all part of Phase 2.
10. Where? Narrow the field
The first step in Phase 2 is to screen cities/communities within the Favorable Countries in order to identify where you need to go and whom you need to talk with. Selection of cities/communities is generally based on factors that are important to the project, such as telecom and power redundancy, access to highways, labor availability, proximity to an airport with commercial service, avoidance of competitors or, in some cases, in proximity to industry hubs, and the community's overall reputation as a location for educated talent to support and service your contact center or BPO operation. Available buildings that meet basic project requirements may also be a consideration in screening specific cities/communities. Based on the building you may find tax incentives.
11. When? The essential site visit
The purpose of the site visit is to find reasons to exclude communities from further consideration. Listen and watch out for anything that is not done with the highest of integrity. A critical approach to city/community evaluation will help the team avoid being overly influenced by things not essential to the project, such as fancy dinners staged by local economic development officials. Cities and communities that survive a critical evaluation are worthy of serious consideration. A site visit investigation team consisting of two team members, preferably the team leaders, is recommended. Community visits should not be split between different investigating teams. The same team should investigate all communities to assure continuity in data gathering and in subjective assessments of cities/communities. The team should spend one or two days in each city/community and repeat visits should be made if the first trip leaves lingering doubts. Site visit investigations should include meetings with state and local development officials, telecom and utility company representatives, environmental regulators, local employers, local school officials and landowners or representatives. Ask lots of specific questions and don't accept vague and misleading answers; they could be an attempt to gloss over a community's shortcoming.
12. What? Analysis and weighting...
Favorable area analysis compares trial cities in order to identify the best region; the Phase 2 analysis compares and contrasts specific cities/communities and sites to determine the best location for the proposed contact center/BPO. While some communities are eliminated due to obvious shortcomings, the best location may not jump to the top of the list. Therefore, plan to develop a short list of two or three recommended communities.
13. Who? Make recommendations
Review, review, review at the executive meeting. Look at the findings of the Community/Site analysis. Again, group consensus is important. In addition to the recommendations, the team needs to take time to review project assumptions and the research methodology that was used. The meeting should also include a review of the reasons communities were eliminated from further consideration. This will help to educate the team on the logic that went into the recommendations.
14. One last time…Tour the community
Prior to a final decision the entire team should tour the short-listed communities. The tour agenda should include many of the activities of the initial field investigation, including confidential interviews with local employers, a community tour, meetings with telecom and utility companies, and a tour of the local colleges. One day per community is recommended in order to give team members time to absorb and reflect on the community experience. Be sure to tour the area without a guide or ask your guide not to exclude some of the more questionable areas of the city. An objective of the community tour is for team members to see first hand that the data which formed the basis for the recommendations are accurate and complete.
15. How much? Negotiate incentives
The subject of development incentives will work its way into the conversation often during the location decision process. It is only now at the end of Phase 2, when the best geographic region and a short list of viable communities and sites have been established, that incentive weighs heavily on the final selection. Emphasis on incentives prior to this point may steer the contact center/operation to a location that is not well suited to the requirements of the company. Short-term benefits of an attractive incentive package may evolve into a long-term failure of the facility. However, once a short list of viable locations is established, team members can negotiate in earnest for the best incentive package.
The key to success
This article presents a framework for selecting the best location for a new contact center or BPO. Within this framework, selection of the right location hinges on many factors, but none is more important than commitment to the process. When it comes to location selection, all too frequently companies shortchange the decision process, which inadvertently undermines the effort. Stay on course by clearly defining the project, setting realistic goals and, most importantly, allocating the necessary resources, such as a large enough site selection team, to complete the job. When these rules are followed good things are likely to happen. Happy hunting.
Why use a consultant?
If your company is willing to devote sufficient time, money and human resources to solve the problem and you feel that you can arrive at a fair and balanced answer to your diligence effort you should not hire a consultant. However, location selection is an involved process. Many managers who take on the location selection task often realize that there is a long learning curve which yields frustration long before it yields tangible results. Consultant organizations bring speed and efficiency to the problem. Consultant reports are comprehensive yet concise. The process allows a non-biased approach toward evaluating countries and key cities. Recommendations are arrived at more economically than when internal resources are utilized. Consultants also protect the confidentiality of clients thereby insulating managers from a barrage of unsolicited materials from those who would sway the location decision.