THE DTI'S inquiry into the call-centre industry, announced last month by Patricia Hewitt, will have plenty to get its teeth into. Call centres are at the heart of a number of issues, all more interesting than the simplistic 'India eats our jobs' theme that has recently been hogging the headlines.
As a new report for the Health and Safety Executive (www.hse.gov.uk) again confirms, much call-centre work is white collar production-line activity - repetitive, fragmented and subject to the iron control of automated systems. As such, call centres exemplify the fundamental sin of Anglo-Saxon management: the separation of work from decision-making, with consequent automatic disengagement of hearts and minds. Exporting these jobs to Asia just makes the separation explicit: 'They are organisationally as well as physically distant,' says Warwick Business School Professor Harry Scarbrough, head of a national research programme on the evolution of business knowledge (www.ebkresearch.org).
This kind of call centre is set up not primarily to create knowledge or value but to process codified and standardised information at the lowest possible cost, he notes. This is what mass production is. In these circumstances, offshoring (in the ugly jargon) to low-cost locations is as inevitable as the fact that any advantage will last only as long as it takes for a competitor to buy the same technology and hire the same operators.
Defending UK call centres on the grounds that UK agents take 25 per cent more calls an hour, as an industry spokesperson tried to do, is almost comically irrelevant. As industry iconoclasts like Vanguard Consulting's John Seddon (www.lean-service.com) have established, at least half the work of most call centres currently consists of trying to fix problems that shouldn't have occurred in the first place and over which they have no control. The proper response is not to fix faster - 'doing the wrong thing righter' - but to prevent the problems happening in the first place. This is almost impossible to do at long range, but in any case the way contracts are drawn up - on the basis of transaction and activity levels rather than value - gives no incentive to prevent problems.
The fact is that in its current shape, the call centre industry is a 'solution' devised by outsourcers and the IT industry (often one and the same) to fix symptoms whose causes they can't reach and have no interest in solving. In this perspective call centre location is sublimely irrelevant. As psychologist Abraham Maslow once remarked, 'If something isn't worth doing well, it isn't worth doing at all.'
Call centres don't have to be damaging and unfulfilling places to work, any more than factories do. Indeed, using the same principles as good factories - thinking of organisations as systems for delivering value to customers and devising measures to support that purpose - a few companies have learned to use call centres as essential instruments for diagnosing issues and improving customer service. IT habitually plays a much less dominant role and people can use their full range of skills. Employees are tightly integrated with the rest of the company and much less likely to be outsourced or exported.
The performance of the majority of call centres calls into question the DTI's boast that they represent 'one of our service sector success stories'. Their 400,000 jobs often provide poor value for customers and employees. They also appear to do little for the productivity of the service sector as a whole.
According to new research by the Advanced Institute of Management (www.aimresearch.org) it is now much-vaunted services that are holding back the UK's productivity performance. Although the overall gap with the US remains at 40 per cent, it is no longer manufacturing which is the main contributor: in fact, apart from machinery and equipment, especially computers, UK factories have now made up most of the difference. At the same time some of the service industries in which the UK is supposed to be most competitive, including retail and financial services - a heavy user of outsourcing and call centres - have been falling back. These two sectors now account for fully one third of the total productivity gap with the US, according to AIM.
In an even wider context, the inevitable export of commodity call centre services to India and elsewhere only highlights the need to accelerate the UK's shift towards a globally successful knowledge-based economy, believes Scarbrough. There is always movement of activities along the value chain as IT systems encode and standardise previously inaccessible knowledge and allow it to be processed anywhere on the globe. What's important is to retain and encourage innovation and knowledge-creating activities.
In the long term, UK call centres will only survive if they are doing something that can't be replicated anywhere else.
The Observer, 18 January 2004