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Germany’s Back-Office Segment Shows Strong Growth
BPO provider, Sitel has 60,000 staff in 27 countries. It currently has 5 sites in Germany with over 3,000 workers. Sitel’s German operations are set up as multi-channel centers, meaning services can be provided with the help of all relevant media.
Germany Trade and Invest was instrumental in setting up these centers as the body provided market analysis, intelligence and gave guidance on the right locations to set up operations. Sitel’s Marketing Manager for Northern EMEA, Janine Woelki tells SSON how services in Germany has created trust and confidence in the market.
SSON: Why did Sitel choose five locations in Germany to set up the BPO operations?
JW: Looking at EMEA, as a whole, Germany is a very strong market for BPO business. We wanted to cover the German language with German natives. Sitel is a US-based company, so we wanted to provide this language at the best quality level. From a recruitment point of view, Germany is the best place to be. We are in five locations and choose those locations depending 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 sales or second to third level tech agents, we will most likely base them in the Dusseldorf/Krefeld where the skill-set is a bit more basic. When the client requires lower labor cost, we implement those projects in the eastern part, where we operate from Dessau, Wittenberg and Berlin. In Berlin, there’s a good mix, because you can combine the east and west, a very high skill-set but, compared to the western part, a lower level of labor costs.
SSON: What services, Janine, are your centers providing, across the board?
JW: We specialize in customer care, such as client exposition, client retention, and sales and back office services for our clients’ collections.
SSON: Can you talk us through the timeframe of when the centers were established?
JW: The implementation has been spread over the last 18 years. The first German site was opened in 1992 in Dusseldorf. This company was called Client Logic then and in 2007 Client Logic bought Sitel and hence our name today. The last German site to be opened was Berlin in 2008.
SSON: How does Sitel in Germany fit in with you global strategy? I understand you have operations in 27 countries?
JW; That’s correct, yes. Germany reflects one part or region of Sitel’s Global footprint. Sitel is involved in pan-EMEA and multi-site strategy deals, so we can offer multilingual support out of Berlin. The center in Berlin has many different nationalities, similar to London, all in one city. This gives us a big advantage. Also, people tend to be very highly educated in Berlin, because there are a lot of universities there, which is fantastic for us.
We have a very high level of sales expertise in our center in Krefeld. And we also have those low cost options out of Wittenberg or Dessau, for example. So we are very flexible and can react according to our client needs and expectations. Global sourcing or selecting the best option for our clients out of our 110 plus centers worldwide is what we really do well. We can offer five options to support our clients: We can offer onshore, offshore or nearshore options in Poland and Bulgaria. We also offer homeshoring and can operate direct from the client centers,. Generally speaking – we search the most appropriate talent and skills from across the globe to provide the best services to our client 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’s growing every day, so we really need to deliver a good service. When we speak of competition, we mean other BPO providers. The type of competition, whether it is price or staffing 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, like a telecom or a facility. Also the industry is quite young so we have to import talent and expertise.
SSON: That’s an interesting point you bring up there, Janine. It is estimated that 75% of the industry in outsourcing is under 30 years old. How do you find communicating with that age group? Can you give examples of how you communicate with your talent and staff?
JW: We spend a lot of time, effort and money on our training department. This is one part of a system we call Global Operating System (GOS), which is very unique for 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 kind of processes and training methods around the globe. We want to ensure that we provide the same standard or level of quality around the globe to our customers. Every project implementation starts with the training for the agent so, no matter who we recruit, this person will go through a training phase. It’s correct, a lot of our employees are quite young, but this is good, but sometimes challenging.
SSON: In terms of infrastructure, staffing and competition, I’m sure you’ve learned lessons along the way, can you share some of those?
JW: When we choose a location, we have something like a score card in play and we carry a lot of analysis on the market, location and local recruitment, so this helps us a lot initially to determine a good location for Sitel. With regard to Germany, everything was organized quite well and we invested a lot of time there to pick those places, so there are no complaints or regrets.
SSON: We’re hearing more decisions around nearshoring or rural shoring, as 2010 comes to a close, what are your thoughts about bringing work back closer to the customer?
JW: Well, in terms of nearshore options, it’s working extremely well for Sitel. We operate from two locations; Warsaw and Sofia. We have compared Warsaw to Germany and observed that there really isn’t a gap anymore when it comes to quality and cost. However, Sofia is cheaper to operate out of, but theses centers in Poland and Bulgaria are helping us a lot to cover Eastern European languages as well. We have a very strong client base there and also from a pan-EMEA perspective, clients are keen to have one of those nearshore options included in their site set. For us, it’s most likely that we will expand in the Eastern European part of the Baltic’s in the near future, due to the attractiveness of the region.
SSON: I know you can’t discuss the clients that you’re serving, but what countries and verticals are you serving from Germany?
JW: We are very strong on consumer electronics, where we offer a lot of technical support. We are heavily involved in financial services and in telecommunications. Two verticals which we expect to grow are utilities and healthcare.
Regarding country coverage, most of our clients are based in Europe. We currently provide 12 different languages out of Berlin, which covers the whole of Europe. For example we have one client in healthcare in Berlin who has a multi-site strategy, so we serve this client out of Kingston, for example, and the back office service is provided out of Sofia. This is a typical multi-lingual, multi-site client we serve.
SSON: How did Germany Trade & Invest assist Sitel when setting up services in Germany?
JW: There are two examples that come to mind where their assistance stands out. is The first time was in 2001 when Sitel was looking into options in the Eastern part of Germany, shortly after the [Berlin] wall came down. They provided market analysis, or intelligence, gave guidance on the right location and arranged site visits. In the end, we short-listed two cities – one was Berlin and one was Dessau, and Sitel decided on Dessau at the time, because this was the leading city in terms of cost, while Berlin was the leading city regarding quality. A couple of years later, we found ourselves setting up in Berlin. Germany Trade & Invest assisted a second time Second in 2005, when we had to pick a second location in the Eastern part of Germany: Wittenberg.
SSON: How long does it take in your own experience from deciding on a location to fully implementing services there?
JW: Typically it’s roughly six to nine months. Sometimes it can be sooner, Berlin was a quite easy one to do. If you have a plug and play infrastructure, then it’s quite easy for us. It really depends on the infrastructure, because this is what we need in the first place.
SSON: Apart from 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, a bit of 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’re fast approaching 2011, I wondered what the key highlights of 2010 were for you in business, and what are the expectations for Sitel in 2011?
JW: In 2010, I guess everything was centered around the economic downturn, so some of our clients were facing challenges this year from an economic point of view, so it’s always a tough situation to be in if you are a service provider. I think the good thing with Sitel is we have a very diverse client portfolio so we don’t really depend on a few or just one industrial 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 clients with the best Return on Customer Investment (by focusing on reducing costs and increasing revenue while improving customer satisfaction levels). We’re also confident that even more companies will look to outsourcing their customer care as a way of focusing on their own core competencies and reducing costs.
SSON: Janine, thanks so much for that overview.
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