• May 1, 2014
  • By Leonard Klie, Editor, CRM magazine and SmartCustomerService.com

The New Roles of Customer Service Outsourcers

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contribute to the customer journey in a very positive way." These types of services, he says, "will continue to grow as consumers express their preferences for communications channels on their device of choice."

Loynd notes that all of these types of technology-based services, while a smaller portion of the overall market for outsourced contact center services, "represent a much faster growth rate."

Poised for Growth

Loynd projects the contact center outsourcing market in North America will surpass $28 billion in market revenue by 2017. He currently estimates it at $24 billion.

"Service providers report very healthy sales pipelines and large additional engagements/contracts with existing clients," he says.

Beyond North America, the worldwide contact center outsourcing market is expected to reach $42.4 billion in 2018, growing at a compound annual rate of 5.2 percent, according to T.J. Singh, research vice president at Gartner. Other estimates have valued the current worldwide contact center outsourcing market as high as $55 billion.

Those same estimates place outsourcers in control of about 30 percent of the total contact center market. That's up from 2012, when Forrester reported that 20 percent of companies outsourced or were very interested in outsourcing their operations.

"There is still a lot of market share" for outsourcers to go after to grow their business further, Sitel's Kokes says.

Kokes, like so many others, is seeing new business from companies that are expanding their use of outsourcers, "adding lines of business to their existing contracts," he says.

In general, Frost & Sullivan expects telecommunications and banking/financial services to continue as the top industries in terms of market share.

Loynd also says outsourcers can expect to see a lot of first-time business from companies in the healthcare, technology, utilities, gaming, travel, and hospitality verticals. Healthcare, he says, will be the fastest growing market for outsourcers.

"We consider healthcare among the late adopters of outsourcing due to heavy regulation, long training periods, and complexity in delivering services," adds DeSalles.

The healthcare industry in particular is being served by a new crop of smaller, specialized outsourcers. According to Leggett, the outsourcing industry, which has witnessed a lot of mergers and acquisitions in the past few years, has also seen a surge of newer outsourcers. These much smaller firms typically focus on a single industry vertical, "providing differentiated customer experiences that garner loyalty at a higher cost than from larger, global providers."

Growing Agent Pool

Analysts point out that many U.S. companies are opting for near-shore locations, such as the Caribbean, because they are easier to access than operations halfway around the world. Hot spots right now are Mexico, Brazil, Central America, and the Caribbean, but Colombia and Guyana are also becoming popular destinations, DeSalles says.

"We would venture to say that Latin America will be the next Philippines in terms of a preferred outsourcing region for U.S. call volumes," he adds.

In general, Frost & Sullivan predicts Latin America's popularity will grow at least 10 percent per year through 2017, representing "the highest rate of growth for any region in the world," according to Loynd.

Kokes agrees, noting that the region is desirable because of its close proximity to the United States, similar cultural tendencies, and nearly identical time zones.

But many companies are employing agents even closer to home. In fact, home-based agents are one of the biggest new trends in contact center outsourcing.

The U.S. call center industry already employs 100,000 home-based agents, and Forrester Research expects 34 percent of companies to be investing in the work-at-home area this year "to provide their clients with greater business agility to respond to peaks and troughs in demand," according to Leggett.

"We have already doubled our Work@Home agents program, and expect to double it again this year," Kokes states.

In December, Sitel announced 400 additional Work@Home hires, including 200 full-time agents for a national retailer. A leading communications provider contracted for 100 more Work@Home agents, supplementing the 150 Work@Home agents it already had delivering billing and customer care services. In addition, a nationwide hospitality company is moving from a hybrid strategy of both at-home and call center agents to a staff of 100 percent Work@Home agents.

The appeal, Kokes says, is that the work-at-home model enables companies like his to choose from a wide talent pool and reduce overhead costs, while providing agents greater flexibility with their work and personal lives. The Work@Home program, he says, has resulted in a 15 percent increase in customer satisfaction for clients who use it.

Convergys also offers a work-at-home program, called Convergys Anywhere, which it says is one of the fastest-growing parts of the company. During the past year, it has aggressively been hiring home-based agents in 35 states.

With Convergys Anywhere, clients can gain greater scheduling agility; field a pool of more experienced, educated, and skilled agents; gain business continuity for when the unexpected happens, be it weather, technology, illness, or some other disruptive event; and reduce the cost of service delivery while improving quality and availability.

But in the end, regardless of where the agents are located, the key to a successful outsourcing relationship is simple: "It is important that the best outsourcing vendors are perceived as true strategic partners to their clients, helping them innovate and providing significant value-add to the client business and to the client brand," Loynd concluded in Frost & Sullivan's "North American Contact Center Outsourcing Market Analysis" report. "This involves a proactive approach with clients, particularly when it comes to discussing the evolution toward an omnichannel world. Those that fall short in this area will not make the new short list of providers."

News Editor Leonard Klie can be reached at lklie@infotoday.com.

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