Electronic commerce: The virtual revolution at your fingertips

Time was when Direct Line stole a march on competitors just by offering 24-hour-a-day, seven-day-a-week opening times via the telephone. But now virtually all financial services, to say nothing of catalogues and even supermarkets, are waiting in their call centres for you to ring whenever you choose to do so.

This has caused a virtual revolution in retailing. Well over half the British population would be happy if they never met their bank manager, according to research from Gallup and Bull Information Systems.

But if expectations have been so radically and rapidly changed, the question taxing businesses vying for custom is how are they to ensure that their level of service stands out from the crowd?

The situation is complicated even further when the Web is taken into account. For although the number of people online in the UK is relatively low, the possibility of banking or shopping from the screen, accompanied by the imaginary ease with which this should take place, makes even greater demands on those delivering service. Bull's research also found that almost one-quarter of the 1,000 British adults surveyed said they would like to control their finances via the Internet.

So companies not only have to work out how to deliver their products over the new channels, they also have to extend what the customer can do via existing channels, as well as integrating them altogether.

"The direct revolution is taking a major leap forward," says Gary Colville, manager of enterprise solutions at Aspect Telecommunications. "Those customers who quickly adopted the telephone as a means of doing business are now looking to the Internet and e-mail as their new means of communicating with businesses. The technology to them is irrelevant - they are looking for a consistent, integrated service whatever media they use."

Part of the answer is found in what commentators are calling second-, third- and even fourth-generation call centres. The second generation allows customers to make a number of complex queries with one call. The third generation emerged when calls could be seamlessly routed from one centre to another, meaning both that the customer has to wait less, and that the operator is occupied more efficiently, reducing labour costs.

The fourth-generation call centre will be characterised by another development, integration with the Internet. To the customer, this is likely to be manifest first as the "call-back button" on a Web page, which can be pressed to speak to a real human being. The nice point is that the customer service representative who calls back will already know where you have been looking on the Web pages so that you won't have to tell them what you are looking for all over again.

But it is not only with customer relations that the Web will make an impact. Arguably, its importance will be even more significant in the way it opens up internal processes.

"The Web makes practical technology solutions possible, in a way that really was not viable before," Gary Colville says. "Over the Web, computers are suddenly able to communicate regardless of the hurdles that existed before, whether different operating systems or geographical separation.

"The trick now is to exploit this capability, over an intranet or extranet, imaginatively and skilfully, to deliver a level of service that beats the competitor."

That organisations are well on the way to implementing this high level, state-of-the-art technology is shown in research from Datamonitor. It predicts that the market for Computer Telephony Integration (CTI) technology will grow at a rate of 30 per cent each year between now and 2000, when it will hit the $100m mark. Thirty-eight per cent of Europe's call centre agent positions are in the UK, employing 162,000 people and making it Europe's most developed call centre market. The British lead will be maintained beyond 2002.

Having said that, the utilisation of the Internet as the glue that holds all these services together is some way off yet. But Halifax Direct is one organisation to have managed quite a high level of integration to date. Having the advantage of building a call centre from scratch in Leeds, the IT infrastructure is capable of handling voice, data, electronic and paper documentation in a combination of CTI technology from ETSI and Lucent Technology, with a workflow system from Mosaix. The bank has not only been able to improve customer service, but has also started experimenting with outbound calling to bring in extra returns, mostly by encouraging existing customers to use current accounts more fully.

"While strictly speaking this is not direct selling, the fact that people open an account and then leave it dormant costs the bank money," says Alec Maycock, operations manager.

Eventually, a point will be reached when the differences between the telephone, the computer and the Internet disappear. Browsing a Web page from the mobile, with voice-activated commands, is the service standard of this world.

"In time, CTI will be replaced by computer-based telephony where the computer becomes the telephone, the switch becomes the computer and the data network becomes the voice network," says Fiona Graham, head of Graham Technology's Irish office in Galway.

The question is, will customer service be any better?