IBM ending call-center sprawl; plans OZ megacentre

Customer service had mushroomed out of control at IBM Corp.: Sixty call centers, thousands of 800 numbers and a mish-mash of Web sites were making too many customers see red as they tried doing business with Big Blue.

Thus began a radical consolidation and transformation of the company's call centers a few years back that continues today with a goal of ensuring that IBM sales and support staff can use the Web, e-mail and telephone simultaneously to service customers.

"We're really at the beginning of exploring how to merge telesales and the Web," says Fred Fassman, vice president of IBM call centers, who's responsible for overseeing the reorganization of dozens of IBM sales and customer support centers around the globe.

While few companies have call center operations of this magnitude, the tale of how IBM is tackling its challenges may prove illustrative for others looking to tame their own.

Inside IBM it's called the "teleweb" strategy. A key element is the company's move to put customer relationship management software from Siebel Systems on every salesperson's desktop to keep a centralized customer history database of purchasing and engineer support through all channels. This has made IBM Siebel's biggest customer.

In addition, IBM is about to open up its back-end SAP R/3 enterprise resource planning application so customers can access order history, shipment schedules and other business data without having to phone a sales representative. The Web site - based on IBM's WebSphere product, not surprisingly - is the portal for all this, with separate IBM Web sites such as folded in. Specialized secured extranets for large customers - such as Progress Energy, the state of North Carolina and the Defense Department - can now be accessed through the portal. IBM gets roughly 80 percent of its income from 350 major accounts.

What has consolidation accomplished?

The North American sales support staff for all of this, 7,000 strong, now congregates in four large facilities called Centers in Toronto, Dallas, Phoenix and Smyrna, Georgia. There are only seven 800 numbers instead of thousands. Similar consolidation is under way in South America, Europe and Asia, with megacenters scheduled to open soon in Sydney, Australia and Okinawa, Japan.

The logistics are daunting.

"We do 28 languages in Toronto alone," says Fassman, who notes that this also includes local dialects.

Half-million messages

Last May instituted a "call-back button" next to products so Web customers could input their phone number and have a sales representative call them within seconds. Web e-mail with customers is soaring. IBM last year got about a half million messages, prompting the company to set guidelines requiring a response to each sender within four hours.

The e-commerce focus is lessening IBM's historic dependence on face-to-face sales. The "flying wing-tip brigade" has been clipped to about 25,000 employees from a high of 200,000. The Web site received 99 million visits last year just for self-service and support. This helped IBM avoid about US$2 billion in costs.

But the Centers still remain a place of high-volume calls. Around the world, the centers log 95 sales calls and register $63,000 in sales every minute.

A visit to the Center in Smyrna offers a glimpse into the new Big Blue. The facility - a 156,000-square-foot converted warehouse with high ceilings and modern interior - houses just under 1,000 sales and technical support personnel in hundreds of well-appointed cubicles. Miles of snaking LAN cabling are hidden underneath the flooring.

It's a place where managers, far from walling themselves off in fancy offices, seem more likely to be sitting in the most open area of all, while their sales representatives - all college-educated - work the phones and the Web. Oddly, sound here is muted.

Network bandwidth needs are not, however. IBM, which had been using 12 T-3 lines at the Smyrna facility, just converted to a high-speed metropolitan-area network for access, says Jack Joyner, a senior sales operations specialist. "You've got to commit for quite a lot of bandwidth for this," he notes.

Big team

But don't think this is home for some oversized dot-com company where spike-haired employees make things up as they go along. The center operates more like a football team, where sales representatives know how to pass the ball in formation to minimize disputes about sales turf or who owns an account. If a customer has technical questions that go beyond a sales representative's expertise, the representative never passes the customer over to the technical department. Instead, the technical expert is conferenced in to the customer call.

"We have direct access to the field force and the technical reps, and everyone will remain on one call," says Kenneth Vail, a sales agent.

In addition to the Siebel CRM software, Vail has more than a dozen applications on his desktop to interact with customers on the Web or gain access to a customer history database. Another agent, Randy Haight, says IBM strives not to usurp accounts owned by IBM business partners.

These business partners, such as systems integrators, distributors and resellers, constitute an important customer segment for IBM. Therefore, IBM doesn't want to sell directly into a company where it knows a business partner is the first sales contact.

To help coordinate, all customer data can be presented to the sales agent through IBM's own computer telephony integration product CallPath, which provides a customer history screen-pop when an incoming customer number is transferred to an available agent's phone.

There are challenges to making it all work smoothly, says Jim Hardee, vice president of teleweb sales.

The Web site, which includes a "configurator" tool IBM fashioned to help users design systems, may have pages changing every day. IBM has a policy that Web material has to be reviewed and every new application certified at the corporate level in Armonk, N.Y.

Once that's done, the new product information needs to be uploaded to the server farm for view. Different IBM divisions use a variety of content distribution tools, but Hardee says IBM is considering standardizing on a single one if tests prove it can scale to IBM's needs: several tens of thousands of concurrent users.

Opening communications

As it begins to make use of chat and online callback features, Big Blue is also trying to determine which channels of interaction are the most cost-effective. Customers - and sales agents - seem to prefer communicating through simple voice callback on the Web, rather than chat, Hardee says. "We know the call-back button has improved customer satisfaction," he adds, noting that IBM reached that conclusion by polling its customers online about it.

Avaya's Internet Call Center switched equipment installed at the IBM center facilitates the Web-based callback or text-chat request. This is done by identifying the specific Web page the customer is viewing and routing the request, with the page, to an available representative in the appropriate product group through a Web-based screen-pop on his PC.

For call-back, the Avaya switch is already dialing the customer-submitted number, setting up an outbound conference call for the representative on his Lucent phone.

Like many call centers, IBM's records phone and Web conversations. Although it will take integration work, IBM plans to eventually have the Siebel CRM software recording each interaction by account number, phone number and name.

Although a majority of sales that start on the Web still require phone interaction to complete, IBM would like to see more sales transacted on the Web alone. Toward that end, IBM sometimes offers discounts or incentives such as free shipping for placing orders online.

The Web-enabled call centers seem to be working in Big Blue's favor. While much of the IT industry seems to be wailing about dropping revenue, IBM cheerily reported net income last year rose 16% to $8.1 billion on total revenue of $88.4 billion. Ten percent of that came through the Centers.

And the work goes on, says Thomas Jung, teleweb business development manager: "With the next text chat we're working on, the sales agent will be able to see on his screen all the people at IBM associated with the account ready to do chat."

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