Teleperformance Breaks Partnership, Goes Alone in Japan
"We differed about strategic direction," said Daniel Julien, co-chairman of Teleperformance, during a recent visit to Tokyo. "We had a good relationship with Atec, and two years of partnership was profitable for us both.
"Atec had the opportunity of learning a lot from us and our international business. And they gave us a chance to discover just how the Japanese market works. But then we began to differ.
"I can't tell you details because we agreed to keep them confidential. ... We didn't have any personal difficulties when we decided to end our partnership."
Japan remains important in Teleperformance's long-range strategic thinking, Julien said. The bulk of the business is still in the US and Europe, where last year the company grossed 600 million euros ($580 million).
"We've enjoyed growth of 30 [percent] to 40 percent a year," he said. "Our 1999 profits were 70 million euros, and we think sales will grow 30 percent in this fiscal year to 800 million euros ($700 million).
"We have 10,000 workstations in 100 call centers, and we think Japan is another large market for outsourcing CRM, telemarketing and teleservices. But we're realistic people.
"We built a state-of-the-art contact center in Japan, not too big, not too small, 100 phone lines in all, and we hope to test and fine-tune our strategy for the next 18 months.
"We think that in the next several years our Japanese business will account for about 20 percent of our total revenues. That's why we will continue to invest in this market."
By the end of next year, Julien said, Teleperformance expects to have a "very integrated, mixed team of Japanese and international managers in place here. And we will have a senior Japanese manager in charge, because we believe success will come from integrating the two cultures."
Corinne Bihannic, who runs the Japanese subsidiary, said the company was focusing growth on two sectors -- credit card companies, insurance, banking and other financial services; and telecommunications such as mobile phones, ISPs and other IT businesses.
"We provide a full range of CRM programs, meaning handling and managing basic long-term relationships with our clients' customers -- a full package for dealing with the life cycle of individual customers."
Staffing the Japanese operations, she said, is expensive and time consuming since it involves hiring, training and retaining staff.
The Japanese subsidiary's capitalization is 50 million yen ($500,000), "but the initial investment is going to be much higher than that," she said. "Our working capital will come directly from the parent company, and we will continue to be funded until we are successful. This is a key market."