The outsourcing market hasn’t had an easy year. Scandal at Satyam Computer Services has damaged some views toward global outsourcing, and the financial crisis hasn’t helped, either. “The economy has certainly helped to drive more outsourcing,” points out Jeffrey Kaplan, managing director of software-as-a-service consultancy ThinkStrategies. “On the other hand, [the recession] has created its own disruptions because many of the financial service companies in other sectors…have failed, leaving the outsourcers with staff and service commitments that aren’t necessarily going to be fulfilled.” In this atmosphere, outsourcers have to give customers as many options as possible.
Jeff Selub, an analyst with business process outsourcing specialist NelsonHall, says multichannel is key—but there’s more to it. “It’s not just moving a customer to a less-expensive channel, it’s having all this data about the customer and knowing why they called and moving to the best channel to make the best offer at the right time,” he says. He adds that the winning providers of contact center services will be those that can transform customer service into a profit engine.
The May 2008 merger with Hewlett-Packard hasn’t seemed to overwhelm outsourcing vendor EDS. In fact, according to Selub, EDS has revamped its entire CRM outsourcing portfolio. “These guys are looking to win very complex, large-scale [outsourcing] engagements, which include multivendor engagements,” Selub says. EDS scored high in depth of services, a strength that one analyst says also provides EDS the freedom to basically go in any direction it (or HP) chooses. Kaplan isn’t as optimistic: The merger, he says, has left some customers confused about EDS’s roadmap, making it critical that the company stay close to its customers and keep them in the loop.
The top scorer in terms of depth of services, Sitel climbed up the ladder this year, jumping from One to Watch to leader, having rounded out its offerings in the past few years with a focus on the at-home scene as well as offshore markets. Selub says the company’s brand is quite strong, and the 2007 acquisition of ClientLogic certainly helped expand its geographic reach: “The merger…was huge,” an analyst says, emphatically. “They seem to be making it work and gaining momentum since then.” The analyst rounds out his praise by calling Sitel a “very impressive organization.”
In terms of company direction and depth of services, one analyst called Teleperformance “the best in the biz.” A fixture in the outsourcing market since the 1970s, the company has recently extended its reach. “They continue with smart acquisitions targeted at both geography and capability,” Selub says. “They are in the forefront in terms of some of the technology they brought on board,” he adds, drawing as an example Teleperformance’s emotion-detection technology. Another analyst cites the company’s ability to bring on—and keep—employees from competing outsourcers as evidence that Teleperformance is doing something right. That analyst adds that the firm has also “been very impressive in terms of identifying new delivery markets.” Selub says that Teleperformance has the industry’s biggest footprint, and delivers flawlessly among English, Spanish, and French clients. Most analysts agree that work-at-home agents are becoming incredibly important, and Michael DeSalles, analyst with Frost & Sullivan, notes that Teleperformance is the clear champion in the space. In fact, Frost & Sullivan recognized Teleperformance as its 2009 Outsourcer of the Year.
Ones to Watch
Surprised to see Convergys fall off the leaderboard this year? It’s evidence of a very competitive market. Still, NelsonHall’s Selub says, “[Convergys has] come out and repositioned as a relationship company.” A newly created slot for a vice president of relationship technology management may help, as will an experienced global consulting arm and a focus on customer data for cross-selling and upselling. “They are finding ways to take all this data that’s across the company…and combine it in a way to [drive] customers to the real-time channel,” Selub says. One analyst notes that, although Convergys continues to broaden its offerings, the organization may have bitten off more than it can chew.
Another surprise is West’s drop from 2008’s top spot.
Despite high ratings for customer satisfaction and diverse functionality, West’s ratings for company direction were lower than those of its peers. One analyst questions whether West is gradually moving toward becoming a specialized player—“serving several high-value niche markets”—instead of maintaining its traditional focus. West has shifted to an entirely virtual model, which Selub says is a wise move that doesn’t tie the company to any specific or regional labor pools. West, he adds, has also emerged as a leader in the work-at-home segment. “They have good depth and customer care,” this analyst says, “coupled with strong multichannel and customer-touch-point capabilities.” —Lauren McKay
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