To sign a lease or buy a building for a new call center after selecting the right city or metro area when the domestic and global economic trends, and demand for your products and services are very difficult to accurately predict, requires a seer's vision and a leader's courage.

No one wants to be left with an empty multimillion dollar facility. Yet no one wants to disappoint and annoy customers or clients who will take their money elsewhere if they or their customers are on hold for too long because you didn't have the call centers and the live agents to serve them.

If you are in this difficult position and have postponed opening a new call center or are closing existing centers, you're not alone. Many companies, especially in the high-tech, IT, help desk, telco, retail and even in the booming financial services fields, have iced call center expansions; others have completely shut down call centers.

Some companies' outsourcer partners have delayed new call centers and closed others because existing business dried up and the outsourcers have been seeking subtenants to take over call centers for programs that never materialized (see box on Richland Pointe).

Ron Cariola, senior vice president of Equis (Philadelphia, PA), reports that his firm's new call center work is slowing down. His firm is helping telco giant SBC dispose of a 1,000-seat call center in Tampa, FL.

"There is a general industry-wide corporate capital holdback until the economic picture becomes clearer," says Cariola.

On the other hand, there are other call centers, in-house and service bureaus, which are expanding call centers. Kurt Rosene, senior vice president of The Alter Group (Skokie, IL), says several clients have told the development firm that they need 30 to 40 call centers over the next year.

Rosene sees growth from cellular, financial services and insurance clients. The cellular service market is far from tapped out, he points out, with US cellphone ownership far less than in European countries.

"These companies' businesses hinge on attracting customers and loyalty," Rosene points out. "If they can't service their customers with call centers, they'll lose them."

If your business is growing and you are looking at opening new call centers, you may need to factor into your planning and real estate decision that many of your customers who are calling live agents today may switch to Web self-service in the future.

According to Susan Arledge, principal with Arledge Power Real Estate (Dallas, TX), Internet bookings have diminished the need for reservations businesses, such as airlines, auto rental firms and hotels, to expand their call centers. Executives are not complaining; it costs pennies to conduct a transaction with Web self-service compared with the dollars for a phone call.

However, there is not enough data yet to help companies predict how many calls will be diverted to self-service. And there are call center functions that customers will prefer to have a live person handle.

"Companies don't yet know how many people will be making Internet reservations versus talking to a live person," Arledge points out. "This issue is still being analyzed by these companies when they are making projections before opening new call centers. And while there are some functions like reservations that customers will self-service, most won't do tech support and customer service on-line without help from live agents."

When people do wish to speak to a live agent they want a brighter, more intelligent, quick-to-respond person on the other end, without having to wait 20 minutes on hold.

Companies are now looking for locations that have a higher quality, better educated workforce within commuting distance of their proposed call centers, reports John Castro, vice president of Arledge Power Real Estate. They have to look for attributes such as a two- or four-year college within that radius and not every community offers this.

"The company that is looking to expand their call center must evaluate the labor markets and determine where there is available labor at the skillsets they require," Castro says. "Just as some communities offer a greater selection of available real estate, there are those communities with an abundance of technology employment and schools offering technical education. At the same time, there are communities that have a less educated workforce but they are more loyal or eager to work."

As the demands on call centers grow and we learn more about making them function efficiently, many of the buildings they have been in are now obsolete. Companies are looking for new homes for their call centers. Many are consolidating smaller older facilities into new, modern and attractive facilities.

The Alter Group's Rosene reports that there are still a lot of call centers that do not have the right furniture, air and light systems to help retain their employees. The centers also may not have enough parking or have backup power and fiber.

"These call centers were in locations that suddenly became an integral part of their operation," Rosene points out. "Now their managers are looking at their situation and realizing they need to get into a state-of-the-art facility."

For example, Verizon Wireless announced plans on February 21, 2001, to open four call centers in new cities, expand eight existing facilities, move four to larger sites locally and close five centers. The move, part of a $100 million call center improvement plan, will boost the number of customer service staff up from 13,800 to 14,700 by year end.

WorldTravel BTI, one of the country's largest travel agencies, merged two local reservations call centers in the Dallas, TX, area into one; The Staubach Company (Dallas, TX) handled the site selection. The new center, which opened in March 2001 with 145 agents, has approximately 25 more workstations than the two other older locations combined.

The new call center permitted the firm to move from a low-walled and high noise-level reservation environment into one with a high-tech and high-touch feel, with walls painted in warm colors, higher-walled cubicles to give agents more privacy, work surface and storage, and window views. There's a cyber cafe and coffee bars located throughout the building.

"Our Dallas-area agents are in a more professional and better functioning facility," says Sarah Gilmore, director of operations.

The Upside of Downside: More Space, Stable Costs

If you're able to open a new call center either through demand expansion or by consolidation, one of the big upsides of the current market is that you may have more property choices in your desired labor markets.

The retail bust, with such long-known brand names like Montgomery Ward and Bradlees permanently closing their doors, the vacating of smaller older stores by WalMart, plus less known store closures, coupled with business consolidations and the dot com deaths, have left many more buildings available to call centers.

To sign a lease or buy a building for a new call center after selecting the right city or metro area when the domestic and global economic trends, and demand for your products and services are very difficult to accurately predict, requires a seer's vision and a leader's courage.

No one wants to be left with an empty multimillion dollar facility. Yet no one wants to disappoint and annoy customers or clients who will take their money elsewhere if they or their customers are on hold for too long because you didn't have the call centers and the live agents to serve them.

If you are in this difficult position and have postponed opening a new call center or are closing existing centers, you're not alone. Many companies, especially in the high-tech, IT, help desk, telco, retail and even in the booming financial services fields, have iced call center expansions; others have completely shut down call centers.

Some companies' outsourcer partners have delayed new call centers and closed others because existing business dried up and the outsourcers have been seeking subtenants to take over call centers for programs that never materialized (see box on Richland Pointe).

Ron Cariola, senior vice president of Equis (Philadelphia, PA), reports that his firm's new call center work is slowing down. His firm is helping telco giant SBC dispose of a 1,000-seat call center in Tampa, FL.

"There is a general industry-wide corporate capital holdback until the economic picture becomes clearer," says Cariola.

On the other hand, there are other call centers, in-house and service bureaus, which are expanding call centers. Kurt Rosene, senior vice president of The Alter Group (Skokie, IL), says several clients have told the development firm that they need 30 to 40 call centers over the next year.

Rosene sees growth from cellular, financial services and insurance clients. The cellular service market is far from tapped out, he points out, with US cellphone ownership far less than in European countries.

"These companies' businesses hinge on attracting customers and loyalty," Rosene points out. "If they can't service their customers with call centers, they'll lose them."

If your business is growing and you are looking at opening new call centers, you may need to factor into your planning and real estate decision that many of your customers who are calling live agents today may switch to Web self-service in the future.

According to Susan Arledge, principal with Arledge Power Real Estate (Dallas, TX), Internet bookings have diminished the need for reservations businesses, such as airlines, auto rental firms and hotels, to expand their call centers. Executives are not complaining; it costs pennies to conduct a transaction with Web self-service compared with the dollars for a phone call.

However, there is not enough data yet to help companies predict how many calls will be diverted to self-service. And there are call center functions that customers will prefer to have a live person handle.

"Companies don't yet know how many people will be making Internet reservations versus talking to a live person," Arledge points out. "This issue is still being analyzed by these companies when they are making projections before opening new call centers. And while there are some functions like reservations that customers will self-service, most won't do tech support and customer service on-line without help from live agents."

When people do wish to speak to a live agent they want a brighter, more intelligent, quick-to-respond person on the other end, without having to wait 20 minutes on hold.

Companies are now looking for locations that have a higher quality, better educated workforce within commuting distance of their proposed call centers, reports John Castro, vice president of Arledge Power Real Estate. They have to look for attributes such as a two- or four-year college within that radius and not every community offers this.

"The company that is looking to expand their call center must evaluate the labor markets and determine where there is available labor at the skillsets they require," Castro says. "Just as some communities offer a greater selection of available real estate, there are those communities with an abundance of technology employment and schools offering technical education. At the same time, there are communities that have a less educated workforce but they are more loyal or eager to work."

As the demands on call centers grow and we learn more about making them function efficiently, many of the buildings they have been in are now obsolete. Companies are looking for new homes for their call centers. Many are consolidating smaller older facilities into new, modern and attractive facilities.

The Alter Group's Rosene reports that there are still a lot of call centers that do not have the right furniture, air and light systems to help retain their employees. The centers also may not have enough parking or have backup power and fiber.

"These call centers were in locations that suddenly became an integral part of their operation," Rosene points out. "Now their managers are looking at their situation and realizing they need to get into a state-of-the-art facility."

For example, Verizon Wireless announced plans on February 21, 2001, to open four call centers in new cities, expand eight existing facilities, move four to larger sites locally and close five centers. The move, part of a $100 million call center improvement plan, will boost the number of customer service staff up from 13,800 to 14,700 by year end.

WorldTravel BTI, one of the country's largest travel agencies, merged two local reservations call centers in the Dallas, TX, area into one; The Staubach Company (Dallas, TX) handled the site selection. The new center, which opened in March 2001 with 145 agents, has approximately 25 more workstations than the two other older locations combined.

The new call center permitted the firm to move from a low-walled and high noise-level reservation environment into one with a high-tech and high-touch feel, with walls painted in warm colors, higher-walled cubicles to give agents more privacy, work surface and storage, and window views. There's a cyber cafe and coffee bars located throughout the building.

"Our Dallas-area agents are in a more professional and better functioning facility," says Sarah Gilmore, director of operations.

The Upside of Downside: More Space, Stable Costs

If you're able to open a new call center either through demand expansion or by consolidation, one of the big upsides of the current market is that you may have more property choices in your desired labor markets.

The retail bust, with such long-known brand names like Montgomery Ward and Bradlees permanently closing their doors, the vacating of smaller older stores by WalMart, plus less known store closures, coupled with business consolidations and the dot com deaths, have left many more buildings available to call centers.