Is the offshore contact centre honeymoon over?

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Is the offshore contact centre honeymoon over?

Karl Flinders

Western businesses are shying away from investing in offshore contact centres due to social and business pressures.

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.

According to Ovum, these businesses are increasingly investing in onshore customer services to improve the quality of customer interaction as a result of pressure to keep jobs onshore and fears over data security, because offshore locations are often seen as unstable.

Ovum said lower delivery costs are not offsetting the concerns that enterprises which have not already taken the plunge have about these locations.

"These numbers will make worrying reading for those companies that provide offshore contact centre services and are hoping to win new business based on their ability to reduce costs for clients," said Peter Ryan, Ovum lead analyst.

"Several new barriers to offshoring contact centre work have come to the fore and made it a riskier prospect for enterprises. Enterprises feel that the reduced prices simply don't compensate for the potential to lose customers in these tough economic times," he said.

 

Barriers to offshoring contact centres 

 

Customer interaction

"The issue over the quality of the interaction with customer service agents and users is a key one," said Ryan. "Customers can quickly become frustrated if they feel their enquiry is not being dealt with quickly and effectively and take their business elsewhere. In this tough economic climate, enterprises are less willing to send their contact centres to low-lost offshore locations because they feel there is greater risk that quality will become an issue."

 

Location stability

Recent troubles have brought concerns about continuity of service for enterprises. "UK and US contact centres may be more expensive, but it is highly unlikely that trouble will break out of a scale that will severely disrupt business operations," said Ryan. "Many enterprises would rather pay a premium to ensure continuity of service for their customers than have to deal with the political unrest and drugs wars that are plaguing countries such as Egypt and Mexico."

 

Will onshore advantages last?

"At the moment there are good deals to be found in places like the UK and US due to the economic crisis pushing down labour and premises costs and reducing agent churn." said Ryan. "This has helped some businesses to move their contact centres back onshore, but the question is, how long will that scenario be sustained? Could it be that when the job market and economy recover those decisions will be rethought?"

 


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