An analyst report predicts that more U.S. and Canadian companies will engage in BPO to fight competition from other regions.
Posted Jan 17, 2006
The North American contact center outsourcing market is on the rise, with Canada leading the way, according to a new report by DMG Consulting. The "2006 North American Contact Center Outsourcing Market Report" states that the demand in that country will increase by 5 to 8 percent this year. "In the middle of 2005 we started to see new [contact center] seats, and a couple of new call centers, being built in Canada," says Donna Fluss, author of the report and founder and principal of DMG Consulting.
Fluss attributes this growth to the fact that North American outsourcing vendors have begun to respond to global competition for core outsourcing capabilities by providing commoditized pricing, then making up the difference with value-added services and vertical domain expertise. "In America, we expect to see some growth and stabilization," Fluss says. "Overall, we're going to see slow, but steady, growth."
Fluss also expects North American vendors to consolidate. With more than 150 outsourcing vendors in the region, there is plenty of potential for mergers and acquisitions. In addition, more of those organizations will offer business process outsourcing (BPO) services, which along with their core call center capabilities, will assist customers with the ongoing operations of their companies like accounting, applications processing, and human resources. In June 2005 Convergys purchased Deloitte's finance and accounting BPO practice to help broaden its portfolio against competitors like ClientLogic, EDS, and TeleTech. Additionally, the IRS is discussing having some service companies do some of its collections, according to Fluss.
Overall, these moves are expected to enable North American outsourcing vendors to compete against their foreign counterparts on more equal terms. North America's outsourcing companies "have done a good job decreasing costs while adding value," Fluss says. "While offshore outsourcing is still very strong, this report indicates that customers shouldn't ignore the North Americans, they should include them in their mix."
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