Is the sum of all fears really destroying offshore contact centre Industry?

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According to research from Ovum the advantages of offshore contact centres are decreasing, while the fears associated with setting up call centres in low cost offshore locations are increasing.

The reducing costs associated with running contact centres onshore, worries about the quality of interactions between offshore contact centre agents and customers, as well as fears over political and environmental risks are making corporates think again.

Research from Ovum revealed that only 2% of large enterprises in Europe, North America and Australia plan to offshore customer services in the next 12 to 14 months. Only 10% said they will offshore customer services in the next 36 months and 80% said they have no plans to offshore.

We have all had expperiences with contact centres offshore as customers so these figures might come as a surprise. Particularly when you consider that offshore IT service demand just grows and grows.

The appetite for offshore IT services just seems to increase by the day. This is probably because the reasons for offshoring IT are changing. It always was, and still is according to many, merely a cost cutting exercise.

Newcomers to offshoring are a huge potential market. Only last week the head of the FA's IT said the organisation was looking at offshore application development, for the first time, in order to get more flexibility in development resources. This is in relation to a big project.

So despite fears over onshore and offshore communication, reducing onshore costs as well as environmental and political risks, more companies than ever are considering or already offshoring IT. Offshoring is about much more than lower costs then?

The options are increasing all the time and not just India, with Eastern Europe, South Africa, Brazil, Egypt and China to name a few I have written about recently. Or will nearshore locations such as Spain have their day?

I interviewed someone from Malaysia yesterday about the IT offshoring options there. It is an interesting one, which I will write about soon on this blog.

2 Comments

Karl - I totally agree that India call centres are yesterday's news. Virtual call centres are springing that are often 30% cheaper than India. This is achieved via harnessing the vast work from home labour force of part-time people. These people are through software paid by the minute - literally. There is no downtime that the centre or the client pays for.
Intelligent dongles lock the pc, allocate the work and record time and indeed efficiency.
The workers work only the hours they want and can flex up and down. Some can to choose the client that they wish to support. Contact centre work onshore tends to be more sophisticated services such as sales of insurance and other services. All calls are recorded making spotting of mis-selling much easier.
Accents are easier and even a sense of humour is creeping back in - refreshing after all this time!

Karl, having read Peter Ryan's report for Ovuum it would be easy to think that offshoring outsourcing for contact centres is over, but far from it, there are more people looking for quality solutions abroad than ever before. We run operations in Europe, South Africa and the Middle East and the last twelve months have been the busiest in our history so far as enquiries and new contracts are concerned. The principle reason for this is the dynamics have changed. Buyers want to balance risk and cost but not at the expense of customer experience. With the advances in technology and growth of social media the reasons why organisations use call centres is changing too. Contact centres are going virtual, cloud based and all those other busswords, but at the same time the services they offer are being far more multi-channel. Yes, we're in a global recession and that's bound to have an impact on business outlook, but I wouldn't write-off the whole offshore outsourcing industry just yet.

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This page contains a single entry by Karl Flinders published on November 2, 2011 12:39 PM.

Is the £40,000 minimum pay threshold enough to stop IT firms abusing the ICT immigration loophole? was the previous entry in this blog.

NHS IT project is dead, but why do large IT projects fail? Part 16 is the next entry in this blog.

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