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The Honolulu Advertiser
Posted on: Tuesday, November 5, 2002

Developing a niche generally is a key to business success in Hawai'i

By John Duchemin

 •  Hawai'i technology on public radio

Hear The Advertiser's John Duchemin and the latest Hawai'i technology news every Wednesday on Think Tech Hawai'i, 5 to 6 p.m. on Hawai'i Public Radio KIPO FM 89.3, with hosts Jay Fidell and Gordon Bruce.

Tomorrow: A discussion on "The Details of Act 221" with guests Ray Kamikawa, author of the bill, and Nancy Grekin, an attorney who works with businesses benefiting from Act 221 tax credits. Phone lines will be open for comments or questions about Hawai'i's tech industry. On O'ahu, call 941-3689. From the Neighbor Islands, call toll-free (877) 941-3689.

With a relatively recent spate of call center closures in Hawai'i, it may be tempting to write off the industry as an abortive attempt to diversify the economy away from tourism.

To do so, however, would probably be an error. Although a half-dozen Hawai'i call centers have shut down since 2000, other employers in the industry are thriving. The contrast between the failures and successes provides an excellent lesson on Hawai'i's strengths and flaws as a place for non-tourism businesses.

The failures have driven home the hard fact that Hawai'i businesses will always have trouble if they don't stand out from the crowd. This is particularly true in tough times, when employers look to cut costs.

Genesys Conferencing, for example, doubled the size of its Honolulu call center this year, only to watch demand for its operator-assisted teleconference services fall by 32 percent. Facing this bad environment, Genesys became the latest call-center operator to close in the Islands, shuttering its 100-employee operation instead of several other centers on the Mainland — even though Hawai'i enjoys a time zone overlap with the business hours of Asia, the U.S. West Coast and the East Coast, which is often pitched by state and economic development officials as a competitive advantage.

Genesys' actions are similar to those of Federal Express, Northwest Airlines and Sprint PCS, which set up Hawai'i call centers as regional service nodes — only to close them when business turned slow.

Industry observers say these companies ran their Hawai'i centers much like centers elsewhere, which was a surefire way to ensure a short life. The pay here is too high to compete with less-expensive regions; the scale of operations too small to fight on equal terms with large Mainland centers.

If a Hawai'i call center doesn't have a specific reason to exist, it's probably one of the first to go, said Kevin Johnson, of the Hawai'i Call Centers Association.

The most successful call centers here have focused on specialties or niches, have attracted skilled employees, and have shown that a Hawai'i-based business not only can beat Mainland competition, but can survive a slow economy intact.

The best Hawai'i centers are highly customized, featuring skilled nurses, insurance experts, investment advisers or multilingual departments. Workers in these call centers may require higher pay than workers in India, the Philippines or the "megacenters" on the Mainland, but the Hawai'i workers deal with more specialized customers and routinely rank among the highest performers in their companies.

The AT&T long-distance call center in Hawai'i has tripled in size since 2001. Now with 300 employees, it's the fourth-largest in the company's U.S. long distance operations, employs multilingual specialists in Tagalog, Vietnamese, Korean and Cantonese, and is a top revenue generator for its parent company.

Call centers run by health care, insurance and banking companies also are doing quite well.

This is good news in a time when many major Hawai'i telecommunications firms and other technology companies are laying off dozens or hundreds of workers.

Call centers may not be "high tech," but the best ones provide a template for success in any industry here: Find a specialty, do it the best, and Hawai'i is a fine place to do business.

Reach John Duchemin by e-mail at jduchemin@honolululuadvertiser.com or by phone at 525-8062.