Entrepreneurial Proposal on ClienTEL

This business will provide the inbound and out bound services to the businesses with long term contacts with the client businesses. Services includes in our business are order processing, customer service, toll free response, help desk and inquiry handling.

This report is confidential and is the property of the co-owners listed above. It is intended only for use by the persons to whom it transmitted, and any reproduction or declaration of any of its contents without the prior written consent of the company is prohibited.

A call center is a physical environment dedicated to servicing and interacting with customers or potential customers. It is comprised of agents whose primary dedicated function is to handle inbound and outbound traffic via the telephone and other increasingly available sophisticated channels.

The economy of

Pakistan

has been booming for the last five of years and

Pakistan

has grown at an average rate of 7% per annum. The local companies, therefore, require interacting with their customers in a delightful manner. Therefore, the companies are making their own exclusive call centers that have increased the overall costs of the company and increasing their efficiency. ClienTEL is being created to tap this opportunity to benefit both the local companies and their customers.

ClienTEL will provide the inbound and out bound services to the businesses with long term contacts with the client businesses. Services includes in our business are order processing, customer service, toll free response, help desk and inquiry handling.

It is a six seated call center. The fees of services will be charged as per seat. Because we will operate with in the country so we will charge initially at low margin nearly about break even.

For the advertising of ClienTEL, the marketing manager will meet the clients personally while convincing him via giving a presentation about the services of our call center and distributing the brochures containing the features. One such brochure has been attached to the Appendix of this plan.

Rs. 30,000 in the first year but then profits will start accruing in the coming years. This can be seen in our Financial Plan.

On the whole we anticipate our business to thrive and grow into a 24 seated call center in the next five years.

Pakistan

, Call Center sector is not mature yet and there is a wide potential for growth in this field. Although we have not been successful in the fields of medical transcription, legal transcription, data capture and forms processing but in the last few years, there has been a major boom in outsourcing voice-based call center work in

Pakistan

. These include both domestic and international call centers. So far there are approximately 180 international call centers and more than 30 domestic call centers employing more than 12000 agents. Majority of these call centers have operations in major cities such as Karachi, Lahore and Islamabad.

The government is using all its resources to create the infrastructure required to jumpstart growth in the business process outsourcing sector so the Business Service Providers could concentrate on marketing their services abroad, focus on other sub sectors areas of the industry and get due share in the international Call Center Industry.

IT enabled services are a market of the future. The call center business in the past decade has increased dramatically all over the world.

Pakistan

offers state of the art technology and infrastructure for establishing a world-class call center. Companies in Pakistan are developing hardware and software at lower cost than our competitors. Today, the trained professional call center operators are techno-literate individuals and undergo special language training courses to ensure that callers are unable to detect that they are talking to someone in another part of the world. The number of Call Centers / Support Centers is increasing year by year at a compound growth rate of 10% p.a. There is a great potential for further growth in this industry.

In Pakistan many domestic and foreign oriented call centers are operating in Pakistan. The foreign oriented call centers pursue Business Process Outsourcing (BPO) i.e. they get contracts from companies located in USA and UK and carry out their operations. The domestic call centers are few in numbers. Moreover, they are company specific i.e. every company has its own call center. This adds to the overhead costs of those companies who do not have a diversified customer base and who fail to attract customers. Therefore, many such companies are looking for options that are cost effective and more efficient. This is where Client TEL comes in.

There is no such call center in Pakistan that provides professional call center solutions to local companies. Client TEL would be the first of its kind to undertake such operations. Client TEL will not only provide customer response services to local companies; it will also perform telemarketing function for these companies. Consequently, Client TEL has no direct competitor. However, we anticipate new entrants in a few years after our success providing us the core competency to be the first entrant in this sector.

The Call Center is an IT enabled service that is gaining high attention in modern corporate culture and corporate governance. This sector is capable of earning multi million dollar export revenues to Pakistan. Though the current contribution of IT sector is very negligible but it has the potential to contribute significantly to GDP of our economy.

The above table shows the growth in call center industry for a few regions. Compared to these regions Pakistani call center industry is not gauged to the full extent. Therefore, there is a immense potential in this sector, as the number of educated youth is increasing in the urban centers that can speak fluent English.

In the year 2000, major research firms predicted that by 2003 approximately US$60 billion would be spent on call center services worldwide. India was already employing 16,000 personnel for USA companies two years ago with the claim that Indian call center agents are more reliable and skilled and can operate at a much lower cost per transaction than USA call centers. Pakistan is an excellent example of a nation of many extremely fluent English-speaking and Internet literate people who have the future-thinking entrepreneurial attitude needed by good companies in Pakistan looking for outsourcing their customer support, technical support, telemarketing, accounting and more. Internet is more affordable, and bandwidth is subsidized more. Such encouragements have played a major role in acquiring business in this sector.

A few of the basic reasons that make Pakistan a better choice for Local Call centers are:

Pro- active Government policies encouraging growth in business process outsourcing (e.g. Software technology parks, subsidized rates of bandwidth & internet connectivity).

Huge talent pool, with strong technical background (24 million graduates, over 0.5 million graduates joining the workforce every year).

“A call center is a physical environment dedicated to servicing and interacting with customers or potential customers. It is comprised of agents whose primary dedicated function is to handle inbound and outbound traffic via the telephone and other increasingly available sophisticated channels”

Call centers are dependent on telephony-based equipment that aggregates incoming calls, distributes them over a group of customer’s service representatives (CSRs) and queues the calls when necessary. The access to call centers is through 0800 free phone numbers. The typical services are airline booking/ confirmation, help line, banking, hotels, reservations, medical prescription entries, insurance claims and data entries etc. The customer calls are routed to the call center through VoIP (Voice over Internet Protocol) technology to overseas destination where trained operators respond to the inquiries of the customers. The customer is oblivious to the fact that operator attending the call is located in an overseas destination. The service requires quick response, high quality communication links and efficient handling without any noticeable time delay.

Pakistan is among the ten most populous countries in the world with a population base of approximately 152 million. The country has undergone major economic transformation from a regulated system to one, which has seen approximately 7 years of de-regulation and liberalization and improvements in social and economic indicators across the board.

The GNP per capita is US$ 836 per annum, which translates into competitive human resource cost structure for this industry.

An enterprise can be a proprietorship or a partnership and even it can be registered under company law with Securities and Exchange Commission of Pakistan. Selection totally depends upon the choice of the entrepreneur. As per the size of the call center discussed in this report a partnership is recommended.

What will make Pakistan’s local call center choice for main Pakistan’s companies or even one of the typical call center choice locations of the different cities? It is the fantastic potential of well-educated, English speaking, people-friendly citizens of Pakistan, and the huge pool of those who have taken advantage of the opportunities of the Internet against many odds. The people, the Internet, VoIP long distance calling solution, and encouragement by the government can make the local call center choice, a reality.

The suggested size of the call center is 6 seats (extendable to 24) with following configurations.

This will include inbound calls, e-mail service and customer support (order taking, customer enquires, order tracking, etc.)

The total project cost will be Rs.2000000. It is totally equity financed by all the partners as follows:

A Call Center is a sophisticated voice operations center that provides a full range of high-volume, inbound or outbound call-handling services, including customer support, operator services, directory assistance, multilingual customer support, credit services, card services, inbound and outbound telemarketing, interactive voice response and web-based services.

A call center can be used for telemarketing, sales, customer support, or other business related activity. The call center may contain a few or hundreds of agents who handle calls to relay business information.

Call center consists of a complex of telecommunication infrastructures, computer supports and human resources organized to manage effectively and efficiently the incoming and outgoing telephone calls of a given organization. The activity of a call center is performed chiefly by skilled operators who, using telephone and computer, interact with the exterior making or receiving calls to manage various services.

In Pakistan, the access to call centers is normally through 0800 Free Phone numbers, hotels, reservations, medical prescription entries, insurance claims, data entries etc. The customer calls are routed to a call center where trained agents respond to the inquiries of the customers.

There are many possible categories by which the market could be segmented. We can differentiate call center operation by to its type of operation i.e., local or international; by its size or by its type of service. Given below is the description of these types with reference to their operation in Pakistan.

An inbound center is one that handles calls coming in from outside, most often through toll free numbers. These calls are primarily service and support calls, and inbound sales.

Inbound call centers represent a large percentage of the in-house call centers. Due to the long term nature of inbound services organizations are more inclined to establish in-house call centers to provide inbound services. This segment yields long term benefits resulting in more stable revenue generation.

Many outsourcing call centers have also ventured into this segment since this is a cost effective method to provide customers with multiple touch point support for small and medium size businesses. Since there are few regulations for inbound services it is also easier to train agents and provide a faster turn around.

Outbound market mainly consists of telemarketing programs. Although large companies provide these services in-house, outsourcers have a large share of the market in this service area. Outbound campaigns typically are for a shorter duration and widely available, the competition in this sector is relatively higher compared to inbound services. Many outsourcing call centers specialize in providing outbound telemarketing programs. This market segment is highly lucrative where the revenues are generated as a percentage of sales made for the client, but at the same time based on the expertise of the call center the revenues generated through this sector can fluctuate over time.

The integrated call management systems in the outbound call center facilities use, systematic calls to consumers and transfer successful connections to a designated marketing representative (MR) who is dedicated and has been trained for the specific client application. As a call is presented to the MR, the consumer's name, address, and other available information are simultaneously presented on the MR's workstation along with a client's customized script.

ClienTEL call center will operate both as an inbound as well as an outbound call center.

A web enabled call center improves the e-commerce initiatives by offering high quality customer service. Various features offered by Web enabled call center are:

Customer Service – CSRs are required to attend any call from the customers of clientele.

Customer Callback – that helps the visitors of the client's website request a callback from the CSRs by simply clicking and entering their name, telephone information and time for call.

Email Management – This manages high-volume email inquiries directed to client's mailbox or produced via a Website. The incoming messages are tracked and provided an appropriate auto reply message to the customers letting them know that their email has been received.

Telemarketing – CSRs are required to call potential customers of clientele and try to convince them for buying and using the client’s product.

The large-scale emergence of call centers, noticeably during the last decade, has been enabled by technological advances in the area of Information and Communication Technology (ICT). First came PABX's (Private Automatic Branch Exchanges, or simply PBX), which are the telephone exchanges within companies. A PABX connects, via trunks (telephone lines), the public telephone network to telephones within the call centers. These, in turn, are started by telephone agents, often called CSR's for Customer Service Representatives, or simply rep's" for short. Intermediary between the PABX and the agents is the ACD (Automatic Call Distribution) switch, whose role is to distribute calls among idle qualified agents. A secondary responsibility of the ACD is the archival collection of operational data, which is of prime importance as far as call center research is concerned. While there exists a vast telecommunications literature on the physics of telephone-track and the hardware (technology) of call centers, our survey focuses on the service contact between customers and agents, sometimes referred to as the service's moment of truth".

Advances in information technology have contributed as importantly as telecommunication to the accelerated evolution of call centers. To wit, rather than search for a paper _le in a central archive, that renders impossible an immediate or even fast handling of a task related to that _le, nowadays an agent can access, almost instantaneously, the needed _le in the company's data base. A new trend in ICT is the access of customer files in an automatic way. The relevant technology is CTI (Computer Telephony Integration), which does exactly what its name suggests. In fact, this can go further. Consider, for example, a customer who seeks technical support from a telephone help-desk. That customer can be often automatically identified by the PABX, using ANI (Automatic Number Identification). This triggers the CTI to search for the customer's history _le; information from the _le then pops up on the agent's computer screen, detailing all potentially relevant support for the present transaction, as well as pointers for likely responses to the support request. Having identified the customer's need, this could all culminate in an almost instantaneous automatic email or fax that resolves the customer's problem. In a business setting, CTI and ANI are used to identify, for example, cross- or up-selling opportunities and, hence, routing of the call to an appropriately skilled agent.

With an estimated 5,000 Telemarketing, Tele services agencies and Call Center providers in the United States and over 800 in Australia, the search for a partner can be time consuming and frustrating this posse a huge market potential in coming days. As per a market study by Call Center Journal, in 2004, the outsourced inbound U.S. call center industry was worth over $25 billion and is expected to be worth around $42 billion by 2006. The business potential lies in U.S.A., UK, Canada and other Western economies. It is estimated that approximately 80 notable organizations and other less known call centers operate in Pakistan, operating 5-100 seats. Of all the call centers, 60% operate less than 20 seats, 30% operate 20-50 seats and 10% operate 51-100 seats.

There are Government sponsored plans to set up call center hotel of 1500-2000 seats where the infrastructure would be provided and the seats could be leased to various users with their own management. The call center industry in Pakistan is still very young with 80% of such operations having set up in the last 2 years.

Companies with high customer interaction i.e. service providers like banks, etc.

Large companies with high volume of inbound calls like airline booking/confirmation, help lines for insurance companies etc.

Call Centre services are provided to clients customers on the basis of a long term contract (running up to 2-4 years or more). Therefore, we will approach to clients directly. This may be affected through establishing a branch office / subsidiary in Karachi or any other big city market. It is also advisable to appoint a local person as a senior / head executive of the office as it helps to increase comfort level of the target customer(s). Further, in order to attract initial customers, it may be worthwhile to operate on Build-Own - Operate- Transfer basis. Companies may also bear in mind that it is easier to sell services by having a functional ‘proof of concept'. In other words, a functional call center is operating closer to service levels expected by the customer. Such concerns may be common as call centers represent interaction in real time and companies would not appreciate any faux pas in such interactions.

For the advertising of our call center the marketing manager meet personally to the client and convincing him through giving him a presentation about the services of our call center and distributing the brochures containing the features. But most of our marketing is in-house on telephone and e-mails.

For the promotion of our call center we invite personally a client to see physically the environment of our call center and telling them how we convince the customer of our client. We will pay their transportation charges while visiting our call center.

The fees of services will be charged as per seat. Because we will operate with in the country so we will charge initially at low margin nearly about break even.

In the future it is expected that we will make joint venture with some foreign firm whenever we will enter in the international market.

The initial management team depends on the founder themselves, with little back- up. As we grow, we will take on additional consulting help, plus graphic/editorial, sales, and marketing.

The organization has to be very flat in the beginning, with each of the founders responsible for his own work and management.

The required area for the proposed capacity of 6 seats is 500sq. feet covered area for call operators and an additional 200sq. feet for executive offices and meeting room etc.

This space should be available in Lahore at around Rs.15000 per month. But, at the beginning we are using 128-B Block Faisal Town house in Lahore as our office.

Telephone line all free of distortion, Electricity, Natural Gas and a clear rooftop (for the installation of VSAT equipment).

Description	No of Employees	Salary/ month	Annual Salary
Network Administrator	1	15,000	180,000
Supervisor	1	25,000	300,000
Operators	6	10,000	720,000
Accounts Officer	1	8,000	96,000
Office boy	1	3,500	42,000
Total	9		1,038,000

It is evident from our Performa income statement that ClienTEL is incurring loss in the very first year. Therefore, ClienTEL might not be able to sustain such losses in the preceding years. Although, the principals anticipate huge profits in the next years but this dream might not materialize. If this happens there is a profound chance of ClienTEL getting default.

At the moment there is no direct competitor of ClienTEL but there is a profound chance of call centers for local industry within a span of a couple of years. This would add to the worries of ClienTEL. The competition would increase and ClienTEL would have to offer better services at a cheaper price. Thus, the profit margin of ClienTEL would get squeezed. There also is a possibility of international call centers tapping the local market. This can further aggravate the situation for ClienTEL.

There is also a great possibility of a market risk for ClienTEL. This means that the market is unable to accept a firm that offers a unique and an innovative service. ClienTEL might not be able to get sufficient number of contracts from the local firms to make enough profits to sustain for a longer term. This might be one of the reasons why call centers operating in Pakistan have not yet hit the local market.

Human resource is at the heart of a call center. The personnel working in a call center ought to have excellent communication skills with a convincing ability in a polite manner. ClienTEL today requires persons that are outspoken in Urdu and a local language. This seems to be a piece of cake looking at the humongous population of Pakistan. But there still is a possibility of ClienTEL to hire inefficient CSRs as there is no proper HR Department. If this happens, this would be a great danger for ClienTEL.

Description	No of Units	Price/ Unit (Rs.)	Total Cost (Rs.)
Router	1	105,000	105,000
Network Switch	1	77,000	77,000
Voice Interface Card	1	58,000	58,000
LAN Equipment		20,000	22,000
LAN Server	1	38,000	38,000
Client Computers	8	22,000	176,000
Misc. Equipment (Generator & UPS)		450,000	450,000
Total			926,000

Description	No of Units	Price/ Unit (Rs.)	Total cost (Rs.)
Furniture		25,000	200,000
Air Conditioner	2	35,000	70,000
Computers for Executives	2	25,000	50,000
Executive Notebooks	1	10,000	10,000
Fax Machine	1	10,000	10,000
Total			340,000

Description	No of Employees	Salary/ month (Rs.)	Annual Salary (Rs.)
Network Administrator	1	15,000	180,000
Operators	6	10,000	720,000
Accounts Officer	1	8,000	96,000
Office boy	1	3,500	42,000
Total	9		1,038,000

	Year 1	Year 2	Year 3
Sales/Revenue	800,000	1,666,600	2,500,000
Cost of Goods Sold	500,000	1,000,000	1,500,000
Gross Profit	300,000	666,600	1,000,000
Administrative Expenses	150,000	200,000	225,000
Marketing Expenses	150,000	150,000	150,000
Operating Profit	0	316,600	625,000
Other Expenses and Provisions	30,000	21,000	50,000
Profit before Taxation	-30,000	295,600	575,000
Provision for Taxes	0	0	0
Profit After Taxation	-30,000	295,600	575,000

The following graph below shows the “Profit After Taxation” for coming years for ClienTEL.