Market research firm Frost & Sullivan (News - Alert) recently released a report showing that the North American contact center outsourcing market will continue to see impressive growth over the next three to five years, although it will face some challenges.


The firm’s “North American Contact Center Outsourcing Markets” report shows that there is greater acceptance of outsourcing across a range of industries and that the need for higher quality customer services is what will mainly drive future growth for contact center services providers operating centers in North America.

North American contact center services providers which participated in the research reported revenue gains of about 7 percent from 2005 to 2006.

The report, however, predicts that North American contact center services providers are still challenged by the high cost of agent high turnover – which results in higher costs for agent recruiting and training. In addition, they will have to contend with the weakening value of the U.S. dollar, which will result in stiffer competition from contact center service providers who offshore their services to locales such as India and the Philippines.

The research finds that most contact center services providers in North America are now offering "blended" delivery models, using a combination of onshore, nearshore, and offshore customer contact centers, to meet the needs of their clients, many of which now consider themselves global operations. This not only helps them save on labor costs, it enables them to more easily offer services in multiple languages and also allows them to offer their services on a 24-7 (or “follow the sun”) basis. As the analyst who authored the report states: "Too much agent capacity in a single geography is considered risky. Political instability, reliability of suppliers on the ground, exchange rate fluctuations, infrastructure reliability, labor pool size, and accent neutralization are important offshore considerations."

The report also finds that the concept of home-based or remote agents is fast gaining popularity among U.S.-based contact center service providers. With the today’s hosted or SaaS (News - Alert) contact center solutions -- facilitating the “virtualized” contact center -- remote agents can have access to the same technology via the Internet as agents in the corporate headquarters. Thus they can receive all contacts – whether by phone, email or Web chat – just the same as if they were in the main center. In fact, with today’s workforce optimization solutions now being offered via the “virtual” model, these agents can be trained, coached and monitored just the same as if they were in the main center, too. With the ability to deliver training and coaching to the remote agent’s desktop via e-learning modules, companies can eliminate the need for live instructors or training facilities. Perhaps more importantly, the all but eliminate the geographic factors constraining them to hire only agents in the immediate area of each center: With the remote agent model, agents can be hired no matter where they live. This, in turn, helps contact center outsourcers hire the agents they need to fill specific skill and knowledge gaps.

The report finds that although the off-shoring trend will continue, there will also continue to be a need for high quality contact center services provided through well-trained U.S.-based contact center agents who are “accent neutral,” tech savvy and better able to provide a superior customer experience for premium or higher tier customers.

The Frost & Sullivan “Customer Care Contact Centers Group” offers global industry analysis, market forecasts, and insights into emerging technologies to help technology and process vendors in the marketplace stay abreast of recent changes to improve their solution strategies, optimize their market messages and decrease time to market for new products and services.

For more information, visit www.frost.com.

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Patrick Barnard is Associate Editor for Customer Interaction Solutions magazine and Assignment Editor for TMCnet. To see more of his articles, please visit Patrick Barnard’s columnist page.