Germany’s back-office segment shows strong growth
A BPO provider, Sitel has 60,000 employees in 27 countries. It currently has 5 sites in Germany with more than 3,000 workers. Sitel’s German operations are set up as multi-channel hubs, which means that services can be delivered with the help of all relevant media.
Germany Trade and Invest was instrumental in creating these centers, as the body provided market analysis, intelligence and guidance on suitable locations to set up operations. Janine Woelki, Sitel’s Marketing Director for North EMEA, tells SSON how services in Germany have built trust in the market.
SSON: Why did Sitel choose five locations in Germany to set up BPO operations?
JW: Looking at EMEA, as a whole, Germany is a very strong market for the BPO business. We wanted to cover the German language with German native speakers. Sitel is a US based company, so we wanted to offer this language at the highest level of quality. From a recruitment point of view, Germany is the best place to be. We’re in five locations and we pick those locations based on the project we get.
For example, where we operate from Dusseldorf/Krefeld, labor costs are higher, but from a recruitment perspective, there is a more defined skill set. If we have a project where there is a high percentage of second to third level sales or tech agents, we will most likely base them in Düsseldorf/Krefeld where the skill set is a bit more basic. When the client requires lower labor costs, we implement those projects in the eastern part, where we operate from Dessau, Wittenberg and Berlin. In Berlin, there is a good mix, because you can mix the east and the west, a very high skill set but, compared to the western part, a lower level of labor costs.
SSON: What services, Janine, do your centers provide in general?
JW: We specialize in customer support such as customer exposure, customer retention, and sales and back office services for our customer’s collections.
SSON: Can you tell us about the time period in which the centers were established?
JW: Implementation has spread over the last 18 years. The first German site was opened in 1992 in Dusseldorf. This company was then called Client Logic and in 2007 Client Logic bought Sitel and hence our current name. The last German site to open was Berlin in 2008.
SSON: How does Sitel in Germany fit in with your global strategy? I understand you have operations in 27 countries.
JW; That is correct, yes. Germany reflects a part or region of Sitel’s global footprint. Sitel participates in strategic pan-EMEA and multi-site agreements, so we can offer multilingual support from Berlin. The center of Berlin has many different nationalities, similar to London, all in one city. This gives us a great advantage. Also, people tend to be very highly educated in Berlin, because there are a lot of universities there, which is great for us.
We have a very high level of sales experience at our center in Krefeld. And we also have those low-cost options from Wittenberg or Dessau, for example. That is why we are very flexible and can react according to the needs and expectations of our clients. Global sourcing or selecting the best fit for our customers from our 110+ locations around the world is what we really do well. We can offer five options to support our customers: We can offer onshore, offshore or near-shore options in Poland and Bulgaria. We also offer Homeshoring and can operate directly from client centers. Generally speaking, we search for the most appropriate talent and skills around the world to best serve our clients’ needs.
SSON: Thanks for that overview, Janine. What challenges, from an organizational point of view, did Sitel face along the way when implementing services in Germany?
JW: We face a lot of competition in eastern Germany and it is growing every day, so we really need to provide a good service. When we talk about competition, we mean other BPO providers. The type of competition, whether price or personnel, depends on the project. Every project is different and every requirement is different.
Another challenge when you have a new location is developing the infrastructure, such as a telecommunications or facility. Also, the industry is quite young, so we have to import talent and experience.
SSON: That’s an interesting point you bring up, Janine. It is estimated that 75% of the outsourcing industry is less than 30 years old. How do you find communication with that age group? Can you give examples of how you communicate with your talent and staff?
JW: We invest a lot of time, effort and money in our training department. This is a part of a system we call the Global Operating System (GOS), which is very unique to Sitel, based on 30 years of experience. We provide a toolbox, a set of processes and methodology that can ensure that we use the same type of training processes and methods around the world. We want to make sure that we provide the same standard or level of quality to our customers around the world. The implementation of each project begins with the training of the agent, so no matter who we recruit, this person will go through a training phase. That’s right, many of our employees are quite young, but this is good, but sometimes it’s a challenge.
SSON: In terms of infrastructure, staffing and competence, I’m sure you’ve learned lessons along the way, can you share some of them?
JW: When we choose a location, we have something of a scorecard in play and we do a lot of analysis around the market, location and local hiring, so this helps us a lot initially in determining a good location for Sitel. Regarding Germany, everything was quite well organized and we spent a lot of time there to choose those places, so there are no complaints or regrets.
SSON: We are hearing more decisions on nearshoring or rural shoring, as 2010 comes to a close, what are your thoughts about bringing work closer to the client again?
JW: Well, in terms of nearshore options, it’s working extremely well for Sitel. We operate from two locations; Warsaw and Sofia. We compare Warsaw with Germany and see that there really is no gap when it comes to quality and cost. However, Sofia is cheaper to operate, but these centers in Poland and Bulgaria are also helping us a lot to cover Eastern European languages. We have a very strong customer base there and also from a pan-EMEA perspective, customers are keen to have one of those near-shore options included in their suite of sites. For us, we will most likely expand into the Eastern European part of the Baltic in the near future, due to the attractiveness of the region.
SSON: I know you can’t talk about the clients you serve, but what countries and verticals do you serve from Germany?
JW: We are very strong in consumer electronics, where we offer a lot of technical support. We are heavily involved in financial services and telecommunications. Two verticals that we expect to see grow are public services and healthcare.
Regarding country coverage, most of our clients are in Europe. We currently offer 12 different languages outside of Berlin, which covers all of Europe. For example, we have a client in healthcare in Berlin who has a multi-site strategy, so we serve this client from Kingston, for example, and back office is provided from Sofia. This is a typical multilingual, multisite client we serve.
SSON: How did Germany Trade & Invest help Sitel to set up services in Germany?
JW: There are two examples that come to mind where your attendance stands out. en The first time was in 2001 when Sitel was looking for options in the eastern part of Germany, shortly after the [Berlin] the wall came down. They provided market analysis or intelligence, provided guidance on the correct location, and arranged site visits. In the end, we shortlisted two cities: one was Berlin and the other was Dessau, and Sitel decided on Dessau at that time, because it was the leading city in terms of cost, while Berlin was the leading city in quality. A couple of years later, we found ourselves settling down in Berlin. Germany Trade & Invest attended Second for the second time in 2005, when we had to choose a second location in the eastern part of Germany: Wittenberg.
SSON: Based on your own experience, how long does it take from deciding on a location to fully implementing services there?
JW: Usually it is about six to nine months. Sometimes it can be earlier, Berlin was quite easy to do. If you have a plug and play infrastructure, then it’s pretty easy for us. It really depends on the infrastructure, because this is what we need in the first place.
SSON: Besides lower costs, what key requirements do you consider when looking for a new location? Can you cite the main reasons for selecting Germany?
JW: The languages, of course. Multilingual capabilities is what we need. Also, some cultural context and the right agents with the best skill set. This is the most important thing, if we decide on the location.
SSON: Finally Janine, we are fast approaching 2011. I was wondering what were the highlights of 2010 for you in business and what are the expectations for Sitel in 2011?
JW: In 2010, I guess it was all about the economic downturn, so some of our customers faced challenges this year financially, so it’s always a tough situation if you’re a service provider. I think the good thing about Sitel is that we have a very diverse client base, so we’re not really dependent on a few or just one industry vertical. For 2011, it’s all about growing and being a strong player within the market. This means that we will continue to provide our customers with the best return on customer investment (by focusing on reducing costs and increasing revenue while improving customer satisfaction levels). We are also confident that even more companies will look to outsource their customer support as a way to focus on their own core competencies and reduce costs.
SSON: Janine, thank you very much for that overview..