A Creative Company That Takes on Challenges
As published on "Best Partner" Magazine, November 2021, Japan
Nowadays, call centers handle not only phone calls, but also chat, SNS, and various other means of communication. Behind the scenes, the world’s most advanced systems and software are being used, and Communication Business Avenue has played a pioneering role in introducing these systems and software to Japan. The company provides a variety of solutions, including in-house developed products, to major e-commerce sites and BPO (Business Process Outsourcing) companies such as Bellsystem24. We interviewed CEO Hiroshi Shibayama, who has built relationships with some of the world’s best venture companies despite having neither the funds nor the technology to do so.
Head office: 3-4 Hikarigaoka, Yokosuka City,Kanagawa PrefectureYRP (Yokosuka Research Park) Center 1, 5F
Capital: 40.16 million yen
Sales: 940 million yen (FY2020)
Call centers, which we have all been a part of at one time or another, continue to evolve in ways we cannot see. They used to be mainly telephone-based, but now theysupport chat, LINE, Facebook, and other social networking services. In addition, there is a system in which operators share the customer’s browser screen and teach them how to use the products.
Communication Business Avenue (CBA), headquartered in Yokosuka, Japan, was one of the first companies in the world to introduce these new technologies to Japan by translating them into Japanese and customizing them for its customers. “We have worked hard to make cutting-edge software and systems developed mainly by American ventures available in Japan,” says Hiroshi Shibayama, 56, the company’s CEO.
CBA mainly provides solutions to call centers of major e-commerce sites and deals with major BPO (Business Process Outsourcing) companies such as Bellsystem24 and Prestige International, which provide call center operations on their behalf. CBA is currently performing very well, with sales expected to grow from 940 million yen in the previous fiscal year to about 1.5 billion yen this fiscal year. CEO Shibayama said, “The Covid-19 situation has led to the launch of many call centers, but even before that, the shift to omni-channel services was already underway. We believe that demand will still increase in the future, as we will see more linkages with AI.”
Omni-channel, as mentioned earlier, means supporting multiple means of contact, such as chat and SNS. Simply increasing the number of channels requires more work for operators and prevent them from analyzing customer feedback. Therefore, integration of interfaces and data is necessary. The solution to achieve this is a cloud-based contact center software called BRIGHT PATTERN.
Another product driving the company’s performance is Live Assist. This product utilizes Web RTC (real-time communication) technology, which allows operators to share their browser screen with customers, enabling them to respond to customers via videochat, draw diagrams on the browser, assist with input, and send documents. The customer does not need to download any applications, and anyone can use the system. Not only call centers, but also department stores that want to differentiate themselves from mere e-commerce sites are now actively adopting this system.
With BRIGHT PATTERN and Live Assist as its primary focus, CBA also offers VBVoice, a development tool for advanced IVR (automated voice response system) functions, a non-contact MR (mixed reality) remote support tool that allows users to point and draw with their fingers on the screen in real time, a cloud platform for personal authentication, and an AI-powered inquiry management system.
These are products created by their overseas partners, but CBA also develops and sells visual type IVR, simultaneous notification systems by phone and e-mail, automatic reminder systems, and questionnaire systems with automated voices. “We receive a variety of information from our overseas partners, and we use that as a reference to lineup products in a wide range of areas. We don’t dare to focus on a specific field because we don’t know where the seeds will grow,” says CEO Shibayama.
The company’s strength is that it does not end with the sale of its products. In many cases, the products are built on top of cloud services as applications for end-users’ smartphones and other devices, so once a deal is initiated, it will continue to be a contractual relationship. The revenue structure includes the initial cost of introducing the solution to customers and annual license revenues, with license revenues accounting for about 70% of sales.
Live Assist was developed by New York-based CafeX Communications, which CBA has partnered with and supplied as its Japanese distributor since 2014. However, in 2019, in order to strategically narrow down its product offerings, CafeX transferred the Live Assist business to its trusted CBA. In 2020, they also transferred Live Assist, which runs on Microsoft’s Dynamics 365 platform for CRM (customer relationship management) and ERP (enterprise resource planning), to CBA. The former is for on-premise (own servers)and the latter is a cloud service.
“The amount of the transfer was quite overwhelming for us, but the CEO of CafeX was very favorable and agreed to outsource the work equivalent to the transfer amount to us, and we received it back over the course of a year, making the transfer virtually free of charge,” said CEO Shibayama. That is how much CafeX trusted CBA and believed that they would do their best to promote Live Assist.
As a result, CBA has taken over the customers using Live Assist and is now working with global companies such as Wells Fargo, the financial institution with the largest number of branches in the U.S., Ford Motor Company, Hewlett-Packard, American Express, and others. CBA has also signed contracts with partners to continue taking care of these international customers, while also having its own engineering staff around the world. All employees work from home and have built a thorough remote work system, including those in Japan.
Currently, of the 120 employees, 40 are non-Japanese and 80 are Japanese. There are10 engineers in the US, 7 in the UK, 15 in the Philippines, and about 3 in India. “From the time we started the company, the only way to attract talented engineers was to have them work from home. No one would come to Yokosuka. The same goes for overseas staff. Engineers in the Philippines are excellent. They all have university degrees, their English is good, their engineering skills are high, so they are supporting our US and UK operations. All of our employees come to us by word of mouth. We don’t recruit from the public. They invite their own brothers, sisters, and friends, so our employees are very close to each other.”
CEO Shibayama originally worked as a software developer in the IT department of a publishing company, but he and his colleague Yoichiro Okamura (currently CIO = Chief Information Officer) decided to start their own company and established CBA in2006. “We couldn’t do what we wanted to do if we were a cog in the machine. Rather than subcontracting systems, we wanted to create a company that could provide services of our own. We drew up a business plan and first obtained venture certification from Yokosuka City. We didn’t have any money, and we thought we could get by if we passed the certification,” CEO Shibayama smiles wryly.
The business plan at the time was a POS (point-of-sale) system linked to CRM. He was thinking of an Internet-based ASP, or what is now called a cloud service. “We thought we could compete with it because it could be used in a variety of industries,” he says,scratching his head.
Although the system was successfully certified, neither CEP Shibayama nor Mr.Okamura had any idea where to market it. So first, they began developing a system for golf courses, as Mr. Okamura’s acquaintance was a golf course owner. The system was developed over several months while working on-site at the golf course. They completed a system that allows reservations via the website, and barcodes for check-in and recharging at restaurants.
In order to sell this system, they called golf courses and made repeated sales dives. However, the Internet environment was not in place at the time, and they had to start by installing a line. Finally, they received orders for four locations, but the monthly sales were only 200,000 yen because the service was a fixed monthly fee of 50,000 yen. They had no choice but to start localizing software products developed overseas for the Japanese market. They converted the interface into Japanese and translated the manuals as well. This way, the company could sell the products in-house and would not become a subcontractor.
In the process, a Canadian company asked him to localize and sell their IVR (automated voice response) software in Japan. It is VBVoice, which he still sells today. As this sale increased little by little, a customer asked him to also propose a call center platform to use this product. At the time, IP-PBX (Premise Based Switching System = a device that connects company extensions to public lines) using Internet protocols was finally becoming popular, and the customer also wanted to switch to IP-PBX. “I had very little knowledge at the time, so I looked on the Internet to see what was going on in the U.S. and found a few companies that made IP-PBX-based call center software.”
Then he noticed a product called trixboxPro made by a company called Fonality. When he contacted, he was told to come to the U.S. anyway. CEO Shibayama went to the U.S. with Mr. Okamura. CBA had only about 500,000 yen in its account at the time, and the two of them put their company’s future on the line, thinking, “If we fail, this will be the end of the company.”
They had to undergo technical training locally and had to score 90 or higher on the test to be qualified to handle the product. Mr. Okamura took the training, and CEO Shibayama negotiated with Chris Villaume, SVP Sales & Business Development many times. “He asks, ‘How do you sell in Japan?’ I tell him I want to sell to call centers, but he doesn’t understand, and tells me to come back. In the U.S., he was selling trixBox to small and medium-sized businesses. I went on and on, and finally he said, ‘Let’s give it a try.’ I think he was showing me mercy. He called me every day after I returned to Japan. Looking back, he trained me. Mr. Villaume is a strict but considerate. We still have a relationship.”
Thus, CBA entered the call center market through trixboxPro. It still carries this product today, but it is gradually being replaced by BRIGHT PATTERN.
CEO Shibayama tried to attack the major players and made a sales pitch to Rakuten, the company that operates Rakuten Ichiba. After a year of weekly visits to Rakuten, he finally had a chance to demonstrate to CEO Hiroshi Mikitani in 2010, and received the go-ahead. At that time, Mr. Vuillaume accompanied, supported, and also made accommodations regarding the price of the license and other matters for CEO Shibayama.
However, what followed was difficult. On-site operators were demanding new functions one after another, focusing on the usability of the existing platform, and CEO Shibayama stayed at the site for a week with his staff to develop additional functions. Yet, the functions they added at that time were successful and made it easier to conduct sales afterward. A well-known consulting firm for call centers came in to provide sales assistance, and trixboxPro began to spread.
In the U.S., new technologies such as omni-channel and Web RTC subsequently spread, and CEO Shibayama went to the U.S. again for a visit. There, he came across CafeX, the developer of Live Assist. Since CafeX had already attracted attention in the U.S., CEO Shibayama thought that they would not do business with an unknown Japanese company, but surprisingly, they signed an exclusive distributor agreement with CBA. “They never asked me any questions about the size of the company or the number of customers. They asked me what I wanted to do and why, and when I answered, they said, ‘Well, let’s do it.’ This is the good thing about the U.S., where we are not bound by precedents or achievements,” says CEO Shibayama.
BRIGHT PATTERN, the company’s current major product, was also contracted with an American developer as a result of a search in anticipation of the omni-channel era. “When looking for a long-term partner, it is important to have good chemistry. Of course, the quality of the product is important, but if the key person, such as the manager, is only looking at numbers, it will not work well as a partner. Developing the Japanese market requires persistence. If you have a partner who is willing to ‘work together to sell,’ you will succeed.”
We often hear of cases where packaged products from overseas do not take root in Japan. Localization can only be achieved when, as in the case of CBA, the developer and the product are integrated into the Japanese language in the true sense of the word.
Published: “Best Parter” – Magazine, November, 2022
Text by: Katsumi Yoshimura
Photo by: Shinya Kadoma