Slow Start for CTI
Japanese Culture Puts Up the Roadblocks
- by Noriko Takezaki -
The conventional business practices of Japanese corporations have come under fire as the economy has floundered. Desperate to keep their heads above the water, many firms here are turning to foreign technology and know-how to help with their business process reengineering (BPR) efforts. One such technology is Computer Telephony Integration (CTI), well known outside Japan for underpinning the boom in call center operations. Nonetheless, CTI has yet to gain a firm foothold within Japanese corporate plans, and the hurdles are as much cultural and social as they are technical.
Initially, it was office CTI products that were introduced to the Japanese market. However, these failed to gain widespread usage, because many Japanese users hesitated - and still hesitate - to use voice mail in the office, saying that the use of voice mail is not an appropriate way to deal with customers. Recently, however, the demand for call center applications has grown - especially in banks and insurance companies, who are expected to face a harsh new era of competition due to acceleration of financial deregulation, opening up their long-protected market. In addition, companies in communications, distribution, and manufacturing are also showing interest in call center applications for their help desk and direct sales activities. Key providers of CTI products include IBM Japan, NCR, and Fujitsu (for hardware), and Vantive, Siebel Systems, and Clarify (for software). According to the market research company Dataquest, the Japanese CTI market was ¥54.8 billion in 1998, but will grow to exceed ¥159 billion in 2002. However, this size is still far smaller than in the US, which has about 65,000 call centers compared to Japan's approximately 6,000. "People here in the industries are not yet aware of CTI's benefits, though the market potential for call center applications is surely huge," says Takahiro Nomura, an independent CTI consultant. "The key to success in this market will depend on how much we [people in the CTI business] can educate call center operators about the necessity and benefits of CTI for achieving operational efficiency." Unique CTI market in Japan Despite this potential, the market in Japan has special requirements. "American CTI vendors tend to bring in their higher-price CTI products for larger call centers, saying that they have sold the products very well in the US," stated Nomura. "But here in Japan, call centers are smaller, and the volume of calls is also much smaller." Nomura also adds, "in such a situation, most people in the call center business are not willing to spend much money for improvement or renewal of their systems. Some even say that they don't need PCs - just some human beings to handle calls." As a result, CTI vendors must understand that the Japanese market is different. One unique feature of the CTI business in Japan is the existence of independent CTI consultants, like Nomura. In the US, using large consulting companies is popular when considering setting up a call center. However, here, since the CTI vendors still serve a niche market, flexible and elaborate customer care is necessary. CTI consultants are therefore needed to help CTI vendors smoothly develop business with customers. The individual CTI consultant can offer sales support for the vendor, database management, software purchasing, and education for the customer, as well as in-depth cooperation with system integrators. But the most important task for CTI consultants is to educate customers, particularly company executives, regarding how to improve their operations by using CTI technology. "Many people still think that CTI is just for telephone banking," says Nomura. "They recognize the term 'CTI,' but don't know how it can be utilized for improving quality of service, customer satisfaction, or business efficiency. Therefore, we have to teach them more details about how CTI technology can be one of the best tools for achieving the 'Moment of Truth' - meaning customer satisfaction." In Japan, this kind of enlightenment is necessary to expand the CTI market, and, for foreign CTI vendors, Nomura recommends full localization of all products to be introduced, since customers here are still conservative. It's not just the culture There are, however, technical difficulties with the full acceptance of CTI products in Japan, namely the difficulty of achieving smooth interconnection between the components that comprise a full-featured CTI system. Each vendor provides different interfaces for their systems, and in the US, the difficulty with interconnectionsbetween systems has been handled by deploying middleware, provided by separate vendors. In Japan, however, middleware is usually developed by hardware vendors and is sold with the vendor's hardware. Accordingly, the middleware market is still not mature, and the difficulty of achieving interconnection remains unsolved. In order to find a solution to this difficulty, several interface protocols have been developed. TAPI (Telephony Application Programming Interface), proposed by Microsoft and Intel in 1993, allows easy connection of telephone systems with PCs. TSAPI (Telephony Service Application Programming Interface), proposed by AT&T and Novell also in 1993, is used with NetWare servers to provide telephony switching services. The latest addition - JTAPI (Java Telephony Application Programming Interface) - was proposed by Sun Microsystems, IBM, Lucent Technologies, Northern Telecom, Intel, and Novell in 1997, and is aimed at achieving telephony control via Internet browser software. Of these protocols, TAPI is the most popular, but has yet to gain wide usage since it lacks flexibility and cannot be applied across the entire range of desired CTI applications. Also, the TAPI coding process is too cumbersome for easy application development. Microsoft, a shadow player in the Japanese CTI market However, Microsoft has been deliberately watching for an opportunity in Japan's CTI market. To provide a solution to the interconnection difficulty and to enable an open, multi-vendor environment in the CTI business, Microsoft Japan has initiated interface standardization activities based on its ActiveX distributed object technology. The ActiveX CT Initiative - the body managing development of this standardization effort - was established last September in Japan, with 15 corporate members and 104 general members as of December 1998. The core members are Nippon Telegraph and Telephone Corp. (NTT), IBM Japan, Lucent Technologies Japan, Nihon Genesys Laboratories, Nihon Unisys, Mitsui & Co. (the distributor of Vantive), Clarify, East (the distributor of Pivotal Software) Fujitsu, NEC, Hitachi, Oki Electric Industry, Iwatsu Electric, and Toyo Engineering, as well as Microsoft. The general members include office application and communication system development vendors, system integrators, and consultants. The Initiative aims to work towards development of standard technical specifications for interfaces between front office applications and communication systems. This initiative is Microsoft Japan's first challenge in the CTI world, and the company's parent has not followed suite in the US. Ryuta Nakamura, Microsoft's industry marketing manager for the ActiveX CT Initiative, explains that this is due to a unique feature in the Japanese call center market. "Japan's call center business is mostly oriented to small- and medium-sized companies who don't want to spend much money on customizing systems. That's why they need standardized, low-price, multi-vendor products. If the market comprised large call centers only, such standardization activities would not be required." The Initiative plans to release version 1.0 of the specifications in September and expects that new version 1.0-compliant products will be released later in 1999. The current sluggish Japanese economy could be a favorable wind for the CTI business' sails, since Japan Inc. desperately needs to change conventional ways of doing business. However, estimates as to when Japanese companies can fully throw off their conservative views are problematic at best. For CTI business players, patience is still a virtue, and should be rewarded in the future with a mature, thriving market.
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