Adapt and thrive

Smart Business Philadelphia, Feb 01, 2006 by Hampshire, Kristen

Surviving in a modern marketplace is no easy task, especially when your business focuses on serving others. Changing customer needs, regulatory issues, labor costs, evolving technology and competitive pressure all can work against your chances for success.

John Brennan, chairman, president and CEO of Newtown, Pa.based ICT Group Inc. understands the challenges an unpredictable marketplace presents, and he knows you have to adapt to survive and adapt to thrive.

ICT is in the business of managing other companies' customer relationships, and Brennan understands the same strategies he helps his clients with also apply to steering his own organization through a market rippled with competitive and legislative changes.

By using a strategy of proactively making changes to adapt to the marketplace, Brennan has led ICT first through a turnaround and then on a path of steady growth. From 2000 to 2005, he took ICT from $198 million in annual revenue to $384 million, and by continually adapting to new challenges, he hopes to continue this growth trend.

Adapt to survive

One of Brennan's first adaptations was done to survive.

Initially, ICT Group was a marketing support organization for hightech companies, providing sales leads and managing customer databases. Brennan entered the picture in 1986 as head of "change management" after a client that represented a majority of ICT's business decided to move services in-house.

"With outsourcing, you not only compete with other outsourcing firms, you compete with in-house resources as well," Brennan says.

A new direction was needed to reverse ICT's fortunes.

"We needed to turn things in a new direction to alleviate losses as soon as possible and do what we need to do to get business in here fast," Brennan says.

He noticed large corporations such Time Life and American Express had established in-house call centers to solicit customers, but most of them never launched significant internal telesales operations.

"[Telesales] ended up being something that was done off-hours," he says.

This presented ICT with the opportunity it needed.

The company expanded into the building telemarketing field during a time when few companies had the call-center resources necessary to carry out effective telemarketing campaigns. Direct mail was evolving into direct marketing over the telephone, and ICT took advantage of the change.

"We went after that, and we were able to break even because there was such a demand for those services at the time," he says. "I looked at telemarketing as a strategy: How do I build this business and how do I cut ICT's losses?"

Brennan invested in technology and developed contact centers staffed with personnel practiced in handling customer service matters. ICT identified a customer need and filled it, and these efforts helped Brennan turn the company around.

It broke even in one year, and Brennan purchased the company in 1987 and took it public in 1996.

"I never expected we would get as big as we are today," he says. "My expectations were to be a $20- to $30-million marketing services business, and that goal was reached in two years. You raise to the next goal, and we began diversifying."

Adapt to change

While the rise of telemarketing lifted ICT out of financial trouble and carried it through the late 1990s, the economy has worked in its favor as well. So have the need for computer tech support, the boom of virtual companies and the demand for industry-specific market research and database management.

"We adapted to [the trends] and shifted our strategies," Brennan says.

Take downsizing, for example. When companies skim staff, they outsource. Lean sometimes translates to less inhouse and more out-ofhouse. Investing in infrastructure to manage customers is not always top priority, especially if companies know they can outsource this service to firms such as ICT.

"Many companies set up customer service operations in downtown areas, where costs went up and quality of labor typically was going down," Brennan says. "It became problematic to have the right people on the phones. Costs went up, and many of (the companies) were not interested in state-of-the-art technology, which was rapidly developing in this arena."

These same companies failed to invest in relocating call center facilities to more cost-effective locations. Again, ICT was prepared with a strategy to tap into the outsourcing of business functions related to customer relationship management.

"Even large companies started to outsource part of the work," Brennan says. "Because business goes up and down, they wanted to have a flexible options with some [labor] in-house and some through suppliers."

As technology evolved, some companies began outsourcing everything but their core business, and again, ICT adapted to the demand to provide whatever customers needed.

"Virtual companies outsourced almost all of their data processing, customer service and acquisition, and back-office [support]," he says. "They could start out very small and really focus on putting in place the infrastructure to provide their product or service and depend on outsourcing for their support."