January 11, 2005

By Jason Deign, News@Cisco

Communications infrastructure from Cisco Systems® is helping ARINSO, a leading global human resources outsourcing company, create new IP-based contact centers that will dramatically improve productivity while decreasing operating expenses.

ARINSO International, which is headquartered in Brussels and employs 1,400 in 22 countries, also plans to expand into new countries from scratch for just a few thousand dollars each, thanks to an advanced 'contact center in a box' application based on Cisco's IP Communications technology.

The company is one of a number serving the growing trend for businesses to outsource HR functions.

Specialist providers such as ARINSO can carry out personnel processes more cost effectively than their clients, through economies of scale.

Traditionally, however, outsourcing companies have been limited in their flexibility because of the costs of setting up and running service centers to manage HR functions which were formerly performed by their clients in house.

ARINSO has overcome these limitations by using IP switches instead of traditional switches as the basis for its service centers. This means new staff can be 'plugged in' from anywhere, so long as they have access to a network, with all activity being monitored centrally over a VPN.

In theory, service center staff could even work from home.

Up to 75 percent of ARINSO's business is in implementing and integrating HR software from vendors such as SAP or PeopleSoft into clients' IT systems. A further five percent comes from business strategy advice and the company sees tremendous growth potential in business process outsourcing, or BPO.

According to Michel Vereeken, who is in charge of HR service center consultancy at ARINSO, this area of the business is expected to double from 25 percent of revenues at present to 50 percent by 2007.

"We were fortunate to have a historical advantage when we entered this market in the sense that we are a pure HR player, not hampered by investments in BPO infrastructure for finance or IT," he says.

"When we jumped on the bandwagon, it was early for HR but late for BPO in general, so we were able in 2001 to look at voice over IP (VoIP), which was still fairly unproven and not used by any of our competitors.

"I was convinced that in five to seven years traditional switch-based contact centers would be outdated and if we bought into them we would have to move away from them by 2005 or 2006, which would cause us much pain and grief. So we went straight to VoIP."

ARINSO created its first BPO contact center, in Atlanta, in the United States, using in-house skills and bought-in components.

Vereeken said that when a contract came along which required a dozen centers to be built across Europe, "We needed a plug-and-play environment with a live technology footprint. We knew that we wouldn't be able to create this kind of distributed solution ourselves, so we turned to Cisco."

ARINSO currently serves clients, such as Celanese AG, Johnson Diversey and a major car manufacturer, with contact centers in Belgium, France, Germany, Poland, Spain, Sweden, Switzerland, the United Kingdom and the United States, with plans to start operations soon in Canada.

Each contact center is linked, via VPN, to a redundant pair of data centers in Belgium and to a management system which allows managers in Brussels to monitor the activity of every ARINSO agent in the world, just as if they were in the same building.

The flexibility of the technology means that when ARINSO needs to set up a new contact center, all it has to do is hire staff and office space, then ship the requisite number of desks, computers and IP phones.

Vereeken estimates the process can be completed in as little as two weeks, at a cost of around €3,600 or U.S. $2,900 per desk.

"The biggest positive element is that everything is centrally controlled, so we can manage the business with much less resource than you would need for a decentralized set-up," he says.

Another advantage is that ARINSO's low set-up costs means it can afford to run contact centers with just three or four people per country, which allows it to optimize the distribution of its workforce to suit its customers.

Thus, routine client processes and inquiries might be handled by ARINSO staff in remote countries, such as Poland or Spain. When more complex issues arise, however, the query will be transferred over the IP network to a small expert team in the client's home country.

This model means clients can benefit from reduced costs without any loss in the quality of the HR service they receive.

Jason Deign is a freelance journalist located in Barcelona, Spain.