May 2009 Archives

As Americans set out for the Memorial Day weekend I wonder how many realize that this is in a reality a somber holiday, originally started to honor the Union soldiers who died in the Civil War that greatest of American tragedies, whose political aftershocks continue to this present day, and expanded (rightfully) to all fallen American service personnel. When I was a Cub Scout I took part in the local Memorial Day parade, marching to my town's largest cemetery where an honor guard fired a 21-gun salute with their rifles, and racing with the other boys to pick up the shell casings.

Unfortunately as with all human endeavors there are the vermin who seek to exploit and abuse the respect that we have for those who fight for our freedom by seeking funds for bogus veterans' organizations via telemarketing. The Federal Trade Commission has caught a few in its traps. The FTC, joined by 48 states, brought 76 enforcement actions against 32 fundraising companies, 22 non-profits or purported to be ones on whose behalf fund were solicited, and 31 individuals in "Operation False Charity". These include two FTC actions against alleged sham non-profits and the telemarketers who made deceptive claims about these so-called charities--including supposedly for veterans. The FTC alleged that three sham non-profit organizations, American Veterans Relief Foundation, Inc. (AVRF), Coalition of Police and Sheriffs, Inc. (COPS), and Disabled Firefighters Fund (DFF) "were created almost entirely to provide profits for the individual defendants and the for-profit fundraisers they hired."

The FTC contends that solicitors calling on behalf of AVRF falsely claimed that the money they were raising would support the families of soldiers fighting overseas through a program it called "Operation Home Front." In fact, AVRF spent virtually no money assisting military families. AVRF's bogus "Operation Home Front" is not connected to the genuine non-profit Operation Homefront, Inc., a national organization with 30 chapters across the country that provides real support to the families of troops and gets high ratings from watchdog groups.

If there is a hereafter there should be a special nasty place for companies who manipulate individuals' instincts to give and help, not just for veterans and in this instance but for all worthy causes whose would-be donors are victims of deliberate misrepresentation. Barring that the authorities should go further by having them arrested, charge them with fraud and if pled or found guilty sentence them to the vilest community service assignments there are: like picking garbage and cleaning cesspools, septic tanks, stables and zoo pens in 100-degree heat while wearing the finest cold-rolled steel 'jewelry'. Or if criminal prosecutions are not feasible, giving the defendants the 'option' of paying the penalty by such 'barter' and strongly encouraging them to take it.

Yet what is more disturbing, yet more commonplace unfortunately are the misrepresentations made by telemarketers calling on behalf of legitimate organizations, to try and boost their incomes and what the public consensus appears to be a too-low take (15 percent) by charities. One of news stories about CDG closing down several of its contact centers also includes mention of action by the FTC against it. To cite the South Florida Business Journal: "The company's tactics have come under scrutiny from the Federal Trade Commission and others who allege CDG exaggerates the amount of donations that go toward charitable causes."

In defense of CDG and other teleservices firms charities point out that while these companies do extract most of the money raised from donors--up to 85 percent--what they have left over is more than what they had before.

Chuck Hurley, chief executive of Mothers Against Drunk Driving told the Long Island Business News, in a story published Oct.10, 2008, that MADD national tried more 'down-home methods of fundraising', but they failed. MADD national in 2005 lost money on golf tournaments, made a mere $585 after expenses on walking, running and biking events and earned only $326 on dinners and luncheons.

"'If you think it's easy to raise money for a nonprofit organization, even one as important as MADD, you're new to this,'" said Hurley.

Charities run the risk in today's environment of losing credibility with the average donor, who contributes via telemarketing, and in being restricted in their efforts by further legislation to curb fraud and misrepresentation, such as removing their exemption from Do Not Call lists. In response there needs to be reform of charity fundraising via telemarketing, ideally a combination of stiff penalties including aggressive criminal prosecution to reflect the vileness of the fraud when it takes place, find ways to remove the temptation of misrepresentation, and a review of practices and costs to increase returns to worthy organizations.

To make such meaningful actions happen organizations like the American Teleservices Association, the Direct Marketing Association, and the Canadian Marketing Association and the charities need to step up to the (collection) plate to come up with best practices that can become codes and practices and standards that in turn form the basis of laws. They also have the collective clout to make this happen.

By making worthy causes more worthy to donate, more people, such as our veterans, can get the help they need, which is the least we can do for those who have and continue to serve us, and in doing so making our world a better place.

If staying afloat in rough economic waters were not enough, small-midsized businesses (SMBs) are experiencing frustration and inefficiency when it comes to integrating data management and business software (i.e. ERP, CRM) that have been intended to help them manage costs and grow revenues. With the hefty chunk of change those solutions command, at a time where every dollar spent must have the maximum value extracted, these need to start pulling their weight.

A new white paper sponsored by Sage and published on TMCnet reveals that customizing applications for particular needs ranks the top--63 percent--of common software problems. This is followed way behind by duplicate data entry points and coordinating software updates each at 32 percent.

"Many SMBs are utilizing contact management and accounting software but most don't have a solution that provides visibility and insights from data," says the paper. "And they're finding that customization and data management across different systems can be very challenging."

The paper also found that an overwhelming majority of SMBs use ERP software--79 percent--to manage sales, manufacturing, distribution, and HR. A sizable minority--38 percent--use CRM applications.

Yet while ERP and CRM solutions complement each other, fewer than 1 in 10 SMBs believe they are seamlessly integrated. Most feel that they have some room for improvements when it comes to data sharing.

The Sage white paper makes the case for integrating these solutions. It has very helpful recommendations to help SMBs obtain greater ROI from ERP and CRM.

"What can seamless CRM and ERP integration do for my business?" asks the paper.
SIMPLIFY EVERYTHING. Bridge your ERP and CRM software into one unified solution that can deliver a consistent user experience."

That experience, helping to ensure that every time when a customer interacts with your organization is consistent and successful, is what being successful in business is about.

In what cynics say is another death knell for nearshore contact centers in Canada, and one more piece of evidence that beneath globalization is headquarters nationalism, online auction giant eBay is closing its Canadian contact center, which is located in Burnaby, British Columbia; Burnaby is part of the Metro Vancouver area.

Yet this move is one more illustration why traditional bricks-and-mortar centers are obsolete...

The Canadian Press reports that 700 agents will lose their jobs by the end of September as eBay pulls its work back across the border: to its Salt Lake City offices plus to other offices worldwide.

"While it is a difficult decision to close our Vancouver facility, we believe that consolidating our North America customer service operations will help accelerate our efforts to continually exceed buyer and seller expectations," the wire service quoted Chad O'Meara, vice-president of customer service for eBay Marketplaces.

It is too bad to see eBay shutter its shop. Despite the fanfare around the 2010 Winter Olympics, British Columbia including Metro Vancouver has been hard hit by the downturn and can ill-afford to lose this employment.

Naturally the eBay closure has become one more issue in the provincial election, which will take place May 12. The Globe and Mail reported that Opposition New Democratic Leader Carole James pointed to it as evidence to support her party's claim that Liberal Leader and sitting premier Gordon Campbell and his government has not been doing enough on the economy.

"'I'd like to see him take some time to talk to those [eBay] workers,'" she said. "'Gordon Campbell continues to say everything is fine while we continue to see these kinds of job losses, we see forest workers lose their job, we see some of the worst job losses in the country, here in British Columbia. So the first thing is to acknowledge there is a problem.'"

In response Campbell said B.C. businesses are going through difficult times but his government's tax regimes have helped ensure things aren't worse.

"'For the 700 people, that is not a good thing... I understand how difficult it will be for them, but I think they know we have done everything we can,'" the Liberal leader told the newspaper.

eBay is only the latest contact center to pull out of Canada, including British Columbia. West slammed the doors on its Victoria area center last year. Convergys and Dell have closed centers as well.

In fairness to eBay the closing is in many respects understandable. The firm, like many others has been rocked by a tough economy, even for low-priced goods sold on auction and through its online merchants. Its latest financial report, released in April, cited the downturn behind a drop in net income in 1Q 2009 to $357 million from $460 million in 1Q 2008.

By the same token Convergys, Dell, and West have also had to look at ways to cut costs. Padlocking redundant facilities when there is spare capacity elsewhere makes sense.

The high and unstable Canadian dollar related to the U.S. currency has made closing Canadian contact centers a viable option. It has climbed from as low as 62-65 cents in 2001-2002 to parity and higher in mid 2008. After dropping to 78 cents recently it has climbed back up to 86 cents. Site selectors figure that 80 cents is the highest Canadian currency can go to make it worth while to set up and keep nearshore contact centers there.

Yes Canadian workers are somewhat better educated, have a strong work ethic, and the government-sponsored healthcare system removes the benefits costs and makes working part-time more appealing. Yet those advantages are not for many firms enough to make up the spread and offset the comfort factor of locating/keeping operations on home territory.

It is this last issue that sticks in the craw, rightly or wrongly, of Canadians, Irish, and others that have seen American companies pull back Stateside in tough times and not just in contact centers either: these moves have been occurring in IT and in manufacturing as well. And it is causing resentment leading to possible political action.

The Globe and Mail reports that Canada is threatening legal action to force United States Steel Corp to resume production at two Ontario steel mills it acquired in its takeover of Stelco in 2007. The paper said that U.S. Steel, which took its first quarterly loss in five years due to auto production declines, is laying off more than 9,000 employees at six North America facilities.

"When U.S. Steel acquired Stelco Inc. in 2007, it committed to a series of undertakings regarding, among others, capital expenditures, research and development and production," said federal Industry Minister Tony Clement in a statement. "U.S. Steel has recently cut production and laid off employees at its Canadian operations.

"I am concerned by the actions of U.S. Steel in cutting operations in Canada and by the impact this will have on its workers. While I recognize that these are challenging economic times, we expect the company to live up to its commitments.

"I have sent U.S. Steel a demand letter under section 39 of the Investment Canada Act, asking the company to comply with its undertakings. A demand letter is the first step in the enforcement process under the Investment Canada Act."

No one is going to expect similar action with eBay, but what it does do is make the economic development agencies leery about attracting and keeping contact centers, especially when there are incentives involved even if and when the currency differential widens for a long period of time, or to serve domestic customers.

Canadian and American communities have seen contact centers pack up when the goodies stop coming. One development agency official called the process by the name of a prominent teleservices company.

In the case of brand name firms like eBay, and Dell closing operations, no matter the PR sends a signal, rightly or wrongly, to customers that all may not be well with them, making them leery about being customers. And that's not a good thing in today's economy,

eBay's Burnaby contact center is one of the coolest designwise and operationally I've ever seen, with plenty of light, curving space, glare-free interiors and virtually no sound; the agents use e-mail rather than voice. Yet in some ways it is the last of an era; the equivalent of the Pennsylvania Railroad's T-1 steam locomotive which appeared just as diesels were beginning to take over and the S.S. United States ocean liner that sail as travelers took to the skies.

For the future of contact centers is not in bricks-and-mortar facilities but in agents' homes where more can be accomplished for less: today's business mantra. Home agent programs i.e. telework can achieve gains of $10,000 to $20,000 per agent/year.

That may be the way forward for eBay, and for other companies caught up in the financial squeeze of both the downturn and a strong Canadian dollar. When Convergys shuttered operations in Alberta, it hired a number of the laid off staff as home-based agents.

eBay should do likewise, which may enable keeping some if not all of its Canadian workers while maintaining its presence in Canada. It can get some help from TransLink, Metro Vancouver's transit agency whose buses and nearby rapid transit line serve the eBay site. It offers an online telework kit.

While eBay is on a cost-saving run it should shutter its Salt Lake City site and move the agents there home too. The Salt Lake City area has become the center of a galaxy of home agent operations, the most prominent of which is JetBlue.

After all, eBay is the ultimate home-based business. What is more appropriate than contacts being handled at home, and at home and abroad?