A year or so ago I wrote a couple of columns about Philippines economic development and the impact of globalization on this and other developing countries (Globalization Part 1, Globalization, Part 2). Knowing I wasn't really an expert on the topic and that who knows who might read them, I did a lot of research and struggled mightily to present a balanced treatment of a complex subject. One of the key dilemmas was to reconcile the "knowledge" I had absorbed in academia way back when (most of it with a decidedly leftist bent) with the on-the-ground realities I had been observing as I built my consulting business here in the Philippines.

Those columns generated diverse and sometimes fascinating e-mails from readers around the globe - everything from compliments on my clear explanation of neo-liberalism to earnest requests for sources from college students to bona fide consulting leads to diatribes/attacks from the anti-globalization camp. At least that feedback provided concrete evidence that a few souls out there take the time to read these Pearls.

A lot has happened since I wrote those pieces, both in the Philippines as a nation and in my own rapidly evolving business. Herewith an updated perspective, with particular reference to the currently exploding phenomena of call centers.

e-CRM: The Emerging Call Center Phenomenon

One of the wonders of globalization is that a great deal of today's business can now be conducted over the web, meaning that physical location is no longer a central concern. The computing and telecommunications revolutions have transformed the way work is done everywhere on the planet, particularly in the area of services. Tasks that were previously accomplished at a centralized location like San Francisco or Tokyo can now be done virtually anywhere. Some of the functions that no longer need to be carried out on-site include human resources, customer service, accounting, translation and transcription, and applications programming. The Worldwide Web creates an unprecedented flexibility in business arrangements that is allowing companies to outsource such services, with geographical proximity no longer a key criterion.

Thanks to the Internet, multinational companies now contract such IT-enabled work to locations scattered around the globe. And what are their criteria? They look for an optimal blend of a talented, English speaking work force, good technological infrastructure, and favorable political climate. In short, somewhere like the Philippines.

In this era of rapid globalization, more and more companies are outsourcing the handling of their inbound and outbound calls, as well as customer inquiries through other channels. Those "customer contact points" cover everything from inquiries to complaints to sales to market research. This represents a major shift in strategy, and suggests that top international managers now realize that by outsourcing increasingly complex customer care needs, you can focus on your core competencies.

The term "call center" itself is fast becoming anachronistic given the complex nature of today's technology and communications channels. "Customer contact center" is more appropriate. Sophisticated ACD (automatic call distribution) systems are replacing antiquated PBX-based technology. Some of the latest technologies include:

• Voice Over Internet: Phone calls transmitted over the web with a single telephone line handling both voice and data.
• Text chat: An older technology in which two or more people communicate in real time by typing messages to one another.
• Escorted browsing: The agent sees what the customer sees and directs him or her to specific web pages.
• Virtual conferencing: Real time communication in which you present "slide show" presentations to folks all over the globe while engaging them in interactive dialogue.

The key to call center success is to map out the many forms taken by customer contact and to ensure that they are all integrated into the CRM system. Among other things, sales and marketing must be fully integrated with customer service.

One way of thinking about it is to consider the difference between analog and digital systems. In the analog system of traditional businesses, authority is hierarchical and decision making is "stretched out" across various departments. But in a modern digital system, e-business is based on a digital network that features instantaneous response and the integration and sharing of information across various departments.

The true digital organization doesn't differentiate sales, marketing, and service. Instead, there is a separate division for customer care (the customer contact center) that cuts across sales, marketing, aftersales services, complaints, and market research. Sales is not seen as a discrete event. Instead, it is treated as part of an ongoing interaction process with the customer. Call centers are now big business in Asia, with Australia and Singapore leading the way. The complexity and sophistication of what's going on is illustrated by the call center facility of Bass Hotel and Resorts in Singapore. They work closely with SingTel, which sets up local toll-free numbers in countries like China and India, then routes the calls over SingTel's international network to its local ISDN line. The data stream (which could be voice or digital data such as an e-mail or interactive chat) is downloaded to Bass' ACD system.

But a lot is also happening right here in the Philippines. For example, over 1,000 hard working Filipinos now answer America Online's customer calls and e-mails on a 24/7 basis from specially equipped telecommunications facilities at Clark Special Economic Zone. They answer over 10,000 technical and billing inquiries daily, making up 90% of the company's customer e-mail. These AOL employees are four-year college graduates holding degrees in computer science, accounting, and business. AOL executives have been thrilled with the quality of their Filipino workers, who have proven to be both hard working and extremely loyal. AOL is planning to expand its operations here even further.

Evidence of the boom time in Philippine call centers is all around. In addition to the dedicated customer service centers like AOL, Citibank, and Fujitsu, local players are setting up call centers to serve global clients. e-PLDT recently entered into a joint venture with Salmat, an Australian firm (Contact World). The Lopez Group (through Benpres Holdings Corporation) has invested about US $25 million in its Customer Contact Center, Inc. (known as C3 and pronounced C-cubed). C3 is now completing a new 850-seat call center in Eastwood City Cyberpark in Libis, Metro Manila. Another industry leader is e-Telecare International, Inc., a PSE-listed subsidary of SPI Technologies, Inc. (STI).

A White Color Sweatshop?

I recently overheard a high-powered California venture capitalist passing through town make comments to the effect that call centers were "pretty low on the feeding chain" and that the Philippines should aspire to be more than just a "white collar sweatshop". I have also been engaged in a vigorous cross-Pacific debate with one of my old colleagues from academia who is astounded that I have sold out so completely and collaborating so enthusiastically in the ongoing subjugation of a long-exploited country. Given the rustiness of my ideological debating skills and the fact that the colleague in question has spent the last 20 years weaving complex radical philosophical arguments, I think I am at least holding my own.

Most of my debating points are based on empirical observations and recent conversations with CSR's (customer sales representatives) manning seats in Manila call centers. I start with the empirical observations that the majority of Filipinos live in a state of grinding poverty and that unemployment and underemployment are endemic here. The educational system pumps thousands of new grads out each year, and good jobs are few and far between. The explosion in the call center scene here is creating thousands of new jobs each year in a country which is poor and which is currently flirting with recession in the wake of the Estrada administration's negative impact and the bad things happening in the American economy.

The call center business has been creating new jobs at a rapid pace, and the managers of those facilities are quite selective in filling their slots. They get the crème de la crème, generally requiring a four-year degree from one of the top tier Filipino universities, fluent English with little accent, computer literacy, typing skills of at least 50 words a minute, and a customer-oriented (i.e., friendly) personality. And that's just the criteria for the initial screening.

There's a long waiting list for these jobs, which pay much better than your average white collar job and offer attractive benefits packages. I asked one young CSR if she felt like she was being exploited, and she looked at me like I was crazy: "Oh no, we're not being exploited. I learn so much in this job, and the training programs are a lot better than you can find working in a bank or insurance company. Most of my classmates are working in places like that, and they are jealous of me. The pay is good and my family is proud that I'm providing customer service to American customers. It's one of the best jobs I could possibly get in the Philippines."

Another empirical observation, which has nothing to do with call centers but a lot to do with globalization, has to do with the ongoing Nike wars. One target of international protest has been a Nike sneaker assembly plant in Cambodia. As in most such cases, the protesters focus on the issues of excessively long working hours and the alleged employment of underage youth.

The reality is that the employees of that plant are virtually all female, many former commercial sex workers, and they are thrilled to have finally obtained a decent paying factory job. If the plant closes, they will again be unemployed and most will slide back into the sex trade. Their quality of life will deteriorate, the self-esteem they currently attain from their work will vanish, and some will get AIDS and die. So why couldn't they just stay working in that shoe plant? The fact that the wages are quite low and "exploitative" by American standards is not sufficient justification for putting those workers out of the best jobs they've ever had in their lives.

So - and I guess I am inviting more attacks from anti-globalization forces - my own perspective has shifted just a bit more towards the capitalist model since those earlier columns. I am learning a lot about the call center industry as I research an article for Customer Contact World and prepare to moderate a panel and make a presentation at Customer Contact World Philippines, an upcoming event here in Manila. And the more I learn, the more I am convinced that globalization is not necessarily such a bad thing. Without disputing it's problematic impact in such areas as the environment and undermining the power of national governments in developing countries, it is also creating jobs that would not otherwise exist. Jobs such as those in the Philippines' call centers are not so bad from the perspective of the typical Filipino college graduate.

One could argue (and many do) that the multinationals are just playing off Third World countries against one another. Indeed, in the call center industry, countries in Asia and elsewhere are actively jockeying for position. The Philippines is in direct competition with India in particular for outsourcing business, including call centers, applications programming, medical transcription, and other services.

However, sitting on the sidelines is not a very good option. You either play the game or you don't. And I would argue that countries like the Philippines had better learn the rules of globalization and identify their own market niches. And there is no time to waste. The challenge for the Philippines is to capitalize on its inherent advantages and leverage them into a competitive edge on the international economic scene. By doing so, the country has the potential to significantly improve its level of economic development and enhance the quality of life of its people.

Customer Contact World Philippines is part of an ongoing series of call center events taking place in Asia and elsewhere. It will be held at the Makati Shangri-La on July 11-13, 2001 (see http://www.ccworldnet.com for details).