The Impact Of AI On Call Centres

The pandemic and business continuity planning

The pandemic is a severe stress test for the business continuity plans of global corporations. The operators of call centres are playing an important role in meeting that challenge, and it has not been easy. In normal times, if an earthquake hits Bangalore, you can switch capacity to your call centre in Manila. But what do you do when all the call centres around the world that serve your customers are hit – all at the same time?

The big outsourcing call centre companies which serve corporate giants have hundreds of thousands of employees, and many of these people are working from home now. Their employers can make sure they have adequate computer equipment, but staff in developing countries are often handicapped by lack of good internet access, and the lack of a calm environment without interruptions.

The pandemic will prompt another round of discussions about re-shoring call centre jobs to places which are less vulnerable in that way, but cost will remain a huge barrier. The salary of one person in a corporation’s home country will often pay for three people in an offshore location. Or you could employ a graduate in India, China, or the Philippines for the cost of a school leaver in the US or the UK, and keep some change.

Accelerating automation
The pandemic is also reviving talk of automation slashing the number of humans working in call centres. In 2014, the CEO of Telstra, Australia’s largest mobile phone company, made headlines with a forecast that within five years there would be no people in its call centres. It didn’t happen, of course. Peter Monk, GM for Australia of Concentrix, one of the two big global customer engagement companies offering contact centre services, says that employment in call centres has grown modestly in recent years, but that the really significant change has been the shift from voice to digital.

When customer interactions are simple, they can often be automated. A chatbot is perfectly adequate to handle a password change, or the provision of some basic information. And the digitally native younger generations prefer to interact digitally, ideally with short videos. But when there is significant value to be generated and exchanged, a call will often still be better.

Concentrix’ rival for the top spot in contact centre management is the French multinational Teleperformance, whose CEO said in a recent interview, “When chatbots started to arrive about five years ago, I was depressed. But since then our company has never grown so fast. The chatbot does the rational part of the job and the customer expert manages the emotional part.”

Natural language processing (NLP)

Peter Monk is sceptical about vendors’ claims to offer services with artificial intelligence. “Most vendors offer clever natural language processing technology, but it is not yet real AI. Some exceptions are coming through, but the software is still mostly pre-programmed, using lookup tables and knowledge banks.”

One of the more interesting early applications of NLP is systems which can detect the emotional state of a customer on the other end of a phone line, or tapping away on their keyboard. These systems are deployed alongside call centre staff, alerting them if a customer seems to be running out of patience, and suggesting variations on the script. The more sophisticated ones can discern the context of a word or sentence, referring to words and phrases from earlier in an exchange, or even from a previous conversation.

Josh Feast is co-founder and CEO of Cogito, whose “AI coach” helps customer service representatives be more emotionally intelligent on the phone. He thinks that most of us under-estimate “the challenging job of handling numerous calls each day, working with customers’ varied circumstances and communication styles, and dealing with countless policies and procedures. This can cause cognitive overload. AI can help them recognize behavioural signals by providing contextual guidance. The focus has been on automation, so we have yet to realize AI’s power to coach people, helping them reach their full potential.”

IVR, and analytics

Thanks to the increasing sophistication of NLP systems, IVR, or Interactive Voice Response, is making a comeback. When these systems were first introduced a few years ago, they were clunky and awkward, and the voice recognition software was not quite good enough, so they were quickly abandoned.

As with most industry sectors, the other big application of early AI systems is analytics. Phone conversations can be converted to text and analysed, so that companies can track how often each customer has been interacting with them, and what they are saying, with greater and greater richness and depth of understanding. This is a big area of investment for the large call centre operators.

A big industry

The call centre industry is a big one, and what happens to jobs in it will be important. It employs many millions of people around the world, in countries both rich and poor. It began in the West when large telephone systems were developed, and gradually became a major global employer. In the UK, the Birmingham Press and Mail claims to have opened the first centre, but the call centre boom really got going in 1985, when Direct Line became the first company to sell insurance entirely by phone. Today the industry employs around 1.3 million people in the UK, and more than 6 million in the USA.

Entrepreneurs in the developing world soon realised that they could bring a massive cost advantage to the industry. India was the biggest player in this market for many years, but in 2011 the Philippines stole the crown. With no connection to the south-east Asian mainland, the Philippines had failed to attract the foreign investment in manufacturing that was improving living standards in Thailand and Vietnam, but its people speak excellent English, and 1.2 million of them now work in call centres.

Translation and gigs

Artificial intelligence and related technologies are driving two other significant trends within the call centre industry. One is real-time translation, which should accelerate global trade – so long as it isn’t derailed by the pandemic, and populist nationalism. Google’s focus on B2C (business-to-consumer) applications leaves some space for other companies to play in the B2B space, and one of the leaders here is Unbabel, a Portuguese company.

The other is the application of gig economy business models to the call centre industry. Companies like Concentrix, through their ‘Solv’ solution, enable individuals anywhere in the world to get themselves accredited to work on particular types of business, and then log on and log off to work whenever they like. As the support tools improve, there is less and less need for contact centre workers to know much about the products and services of the companies they are representing. This information can be accessed instantaneously from databases in the cloud. They are evaluated more on their client handling skills, their empathy, and their ability to work with continuously evolving technologies.

Designing out the human

More fundamentally, younger companies are designing their business processes so that customers never – or almost never – need to contact a human to obtain their goods and services. The websites and logistics operations of digital disruptors aim to be so intuitive and user-friendly that customers never need to search for the “Contact” link. When this works it generates a tremendous cost advantage. When it fails, it generates huge frustration. The worst problem is when legacy companies, which lack the slick ergonomics of the disruptors’ websites, try to pull off the same trick, and hide their contact links. We consumers are not so easily fooled, and this behaviour will be the downfall of many once-great companies.

The long and the short of it

The Telstra CEO’s remark about call centres going dark within five years was a classic case of Amara’s Law, which observes that we over-estimate the impact of any given technology in the short term, and under-estimate it in the long term. Pre-virus, employment in call centres was growing in single-digit percentages a year. Post-pandemic, assuming the economy recovers, call volumes will probably remain stable, but their share of customer contacts will decline, and the call centre will become more and more a contact centre, handling many more exchanges digitally than by voice.

In the long run, it is a fairly good bet that humans will become as scarce in contact centres as they are becoming in warehouses. The question is, how long will this take. As Peter Monk, the GM of Concentrix Australia says, “Of course, the endgame – in the not too distant future – is that many aspects of even my job can be done pretty much by a machine.”



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