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Offshore Call Center Outsourcing - Will Fear and Risk Cause a Decline?

TMCnews Featured Article


November 03, 2011

Offshore Call Center Outsourcing - Will Fear and Risk Cause a Decline?

By Susan J. Campbell, TMCnet Contributing Editor


Outsourcing is sometimes considered a bad word in the call center space. This perception is gaining traction as research firm Ovum (News - Alert) suggests outsourcing firms are treading lightly when it comes to expansion in the near term. The obstacles include perceived risks and low demand in major markets.


Ovum was quoted in this BWorld Online report after the firm released a poll of leading companies in Australia, Europe and North America. It appears companies providing offshore call center services have a tough battle ahead to win new business.

Only 2 percent of the firms polled indicated they would consider offshoring their call center in the next 12 to 24 months. Another 10 percent are planning a move to offshoring in the next 25 to 36 months. The vast majority, at 80 percent, indicated they have no plans at this time to offshore their call centers. 

According to Ovum analyst Peter Ryan, the numbers captured in this poll are worrisome for companies providing offshore call center services that are hoping to win new business based on their ability to reduce overall costs for their clients. New barriers have come to light regarding offshoring call center work, increasing the risk for enterprises. Many execs feel the potential cost savings do not outweigh the risks.

Companies today are facing four key issues, including the quality of interaction between customers and agents; stability of the offshore call center location; pressures related to keeping businesses within the domestic country; and fears over the safety of data.

The low costs offered in offshore call center strategies has led to the establishment of locations such as India and South America as key offshore destinations. When a representative of a Philippine outsourcing industry representative was presented with the findings of this poll, she insisted the industry is optimistic regarding business prospects.

“We know that growth of contact center services will slow but the global market will still remain larger than what providers can supply,” Business Process Association of the Philippines (BPAP) Executive Director Gillian Joyce G. Virata said in the BWorld Online report.

“Growth... will be fastest in non-voice BPO (business process outsourcing) and IT (information technology) and in industry-specific services where Philippines has competitive advantages such as banking, financial services, insurance, health care, IT and creative services,” she added.

Revenues for the BPAP totaled $9 billion last year, with projections for this year at $11 billion. Growth for 2012 has been estimated at 20 percent in 2012.

Given the disparity between the estimates by the BPAP and the findings of the Ovum poll, there may be more opportunity in call center outsourcing than suggested, yet the very real fears expressed by execs still exist. This will put increased pressure on outsourcing providers to secure customer trust and demonstrate the value provided.


Susan J. Campbell is a contributing editor for TMCnet and has also written for eastbiz.com. To read more of Susan’s articles, please visit her columnist page.

Edited by Chris DiMarco







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