You have been chosen with the task of finding the best location for your company’s new customer service center, back office or call center. Immediately you have to think about all the factors affecting this decision.
Is your search is Global? Do you offshore, nearshore, onshore, blended shore, bestshore? Confusing? Some of the best reading I have found on offshoring is the Jones, Lang, LaSalle report, “Deciding Where To Offshore.”
This report introduces its Global Offshoring Index, which comprises data from 45 variables reviewing operating costs, human capital, business environment, infrastructure real estate and market. The report compares 20 cities across four global regions and is very well done. The report can be accessed at www.joneslanglasalle.org.
Another great tool is the A.T. Kearney Global Services Location Index, which ranks 40 countries. Go to www.atkearney.com/shared_res./pdf/GSLI_Figures.pdf
By the way, keep in mind that according to the Everest Research Institute, the total outsourcing market is $362 billion of which customer care is $12 billion, or just 3 percent (see chart).
Keeping Your Search Domestic
If your search is not global, there are several factors to be evaluated. Start with these questions. What is the purpose on the new center? Will it be a cost center or revenue center? What processes will be conducted at this site? What skills are required? What are the educational requirements for the workers?
Typically, the labor costs are 65 percent to 70 percent of the center’s budget. This is the single largest expense; therefore, you must be able to answer key questions about the operation. No guessing is allowed.
I have conducted hundreds of site searches since 1970 and the labor factor still remains the most important part of the equation, and it always will. Consider establishing an internal team comprised of representatives from human resources, information technology, finance, real estate, marketing, sales, etc. Each of these units will have a perspective on how the center should function.
You may also choose to engage outside expertise to either work with the team or to handle the entire process for you. There are several national site consultants who can offer you objective, external, non-biased expertise within the timeframes outlined for the project. When considering consultants, make certain that they have expertise in call centers.
Now that you have decided on a team and/or consultant approach, the selection criteria must be established with each factor having a ranking by order of importance.
Generally, the site location factors will include:
* Population (size and projected growth of area).
* Labor Availability (size of labor force within 20 to 30 miles).
* Labor Impacts (unemployment, underemployment, business closings).
* Labor Sources (military bases, universities, community colleges, retirees).
* Labor Quality (quantification of worker productivity, attendance, attrition, etc.)
* Labor Costs (entry level/average compensation/benefits for similar jobs in the area).
* Labor Skills (languages spoken, specific company skill sets required).
* Labor Competition (similar operations in the area).
* Labor Commute Patterns (within 20 to 30 miles, public transportation).
* Education (graduation rates and numbers, quality, national test comparisons).
* Educational Resources (community college customized training programs).
* Income Levels (household and median).
* Business Costs (worker’s compensation, utilities, unionization, taxes, fees, legislation).
* Business Climate (business initiatives/leadership, project support, legislation).
* Telecommunications (T-1, 3 availability, SONET rings, continuity, points of presence).
* Telecommunications Carriers (local, network. installation/maintenance personnel).
* Internet (high-speed access, reliability, costs, VOIP).
* Real Estate (costs of Class A, B and C space; business parks; campuses build to suit).
* Available Facilities (plug and play, large one-story spaces, parking capacity, security).
· Postal/Courier Services (availability and frequency of delivery based on your needs).
· You should establish a priority ranking for each of these categories, and in some cases sub-categories. Use a scale of 1 to 10 with 10 being the most important. You should then rank each area you are reviewing using these factors.
Remember, you could be reviewing dozens of areas at this point. There are more than 3,000 counties in the United States. After this step has been completed, your search should narrow to just a few areas — maybe the top four to six communities.
Another criteria that has taken on greater importance in recent years is time to market — how soon you can be operational in this area. In many searches that I have conducted, clients have emphatically stated that they must be operational and taking calls within 60 to 90 days. This single factor will eliminate many areas.
Data Sources
You may be wondering where you obtain all of this information. There are several public and private sources for all of the identified factors. Some more common public free sources are:
* U.S. Census Bureau, www.census.gov (population information).
* QuickFacts, http://Quickfacts.census.gov (state county information).
* American FactFinder, http://Factfinder.census.gov (state county information).
* Statistics Canada, www.statcan.ca (information on Canada).
* U.S. Department of Labor, www.bls.gov (labor information).
* Call Center Sites.net, www.callcentersites.net (call center locations and buildings).
* Dataplace, www.dataplace.org (information on cities and counties).
* American Career Infonet, www.acinet.org (information on job careers).
* Expansion Management, www.expansionmanagement.com, (Education Quotient™).
Also, every state has a department of economic development that will provide you with demographic and economic information. Be as specific as you can with your requests. Local economic development groups are invaluable and real estate brokers can provide you with data on available buildings and sites.
There are other sources, but these will assist you greatly in getting started and narrowing the choices.
After these steps have been taken and you are down to the final two to three communities, it is now time to schedule a visit to tour the areas. During these tours, which should be coordinated with state and local officials, you should talk to employers in the area, tour potential sites, visit with local officials, discuss the project with the community college and, of course, discuss incentives.
Incentives cannot — and should not — make your business case. In other words, if you need incentives to make your business case then you are creating a problem for your company and the community. Incentives assist in mitigating the expenses associated with your expansion and are not the reason for your expansion.
You will need to evaluate each area’s package of incentives and understand the consequences in each area. Some areas may even seek personal and corporate guarantees based on the level and scope of your project.
Finally you have a decision to make. Be clear and honest in your decision, and most of all be fair. The site location process can be a complex series of actions. Hopefully, these guidelines will make it easier for you and your company.
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