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And the Emerging Contact Center Outsourcing Market is...

By David Sims, TMCnet Contributing Editor

Quick -- what contact center outsourcing market, valued at $184.5 million in 2009 and expanding in 2010, according to a recent Frost & Sullivan (News - Alert) study, “has been recovering recently thanks to rising interest in broadband service?”

India? The Philippines? South Africa? Strike three. Try Russia.

That’s right. As the Frost & Sullivan study points out, “fewer budget constraints have allowed for greater spending on customer care outsourcing.’

Iwona Petruczynik, Research Analyst for Frost & Sullivan ICT group and author of the Contact Center Outsourcing Market in Russia analysis, says there is “an increasing trend toward the use and deployment of interactive voice response and automated service technologies. It has proven to be an effective way to reduce cost and enable outsourcing companies to provide more services with the same number of agents."

The study offers a caveat: It appears IVR adoption “has not been as rapid as industry predictions of just a few years ago” would have it. In fact, “consumers appear apprehensive about automation and prefer to interact with live agents.” IVR is more accepted among younger and more technologically savvy consumers.

But the big problem is Russia’s dire demographics. It seems there simply aren’t as many Russians being born as the industry would like. The study found the growth of contact center market in the next 3-5 years to be affected by the low birth rate in early nineties.

"Market participants have concerns that there will not be enough young employees to fill in-house call centers and a number of companies will be forced to outsource their services," explains Petruczynik, adding that other nagging hangover post-Soviet Russia’s never been able to quite overcome: The underdeveloped infrastructure. The level of IT infrastructure development, “especially access to broadband,” the study found, “is much lower in Russia than in most European countries.”

Petruczynik notes that "for many years, this sector has been underfinanced and inaccessible to foreign companies... the situation changed since the collapse of the Soviet bloc." Yeah, and with the collapse of the Soviet bloc the government could stop doing things like pouring money into the arms race and subsidizing Cuba. Frees up a lot of cash.