Contact Center Solutions Featured Article

November 07, 2007

Study Shows Outsourcing Strong in 2008

By Susan J. Campbell


Contact centers serve an important role in the overall operation of the organization: customer service. By being charged with managing the majority of customer interactions, contact centers are under intense pressure to ensure that each and every interaction is of the highest quality.

While all organizations can benefit from what the contact center can provide, not all are in a position to support an in-house operation. As a result, many organizations have turned to outsourcing this function. For some, this outsourcing has been done with firms outside of the U.S.

According to offshore advisory firm, Everest Research Institute, outsourcing will remain strong in 2008. HR outsourcing contracts worth $1.1 billion, while finance and accounting outsourcing (FAO) worth $600 million are coming up for renewal in the next year.

The study, 2008 Market Predictions, indicated that the demand for FAO services will continue to be strong in the next 12-18 months as large buyers in the exploratory phase begin to initiate actual engagements. For suppliers, the battle for market share is expected to intensify.

Prime acquisition targets for 2008 are projected to be captive units, niche BPO players and technology providers. Some captives, especially in the financial services space, will see change in ownership and become third-party suppliers.

While the practice of offshore outsourcing has created significant controversy over the years, the reality is that the model for this practice has been proven time and again. Many companies that have tested offshore call centers have found that they can work and as a result, they are pumping millions of dollars into the industry.|

Complete accuracy and safety of data is also a concern for those companies seeking outsourced options of their contact centers. Many firms have turned to technology solutions to not only promote the work of the call center, but to also ensure safety and security of information.

As a result of this study, Everest Research Institute anticipates a major influx of in-house call centers moving to developing locations such as India, the Philippines and South Africa. The firm also expects to see the early stages of consolidation in the industry. Smaller players are expected to merge, get bought out, specialize in specific sectors or go out of business.

This projected consolidation will not only lessen the options available for those seeking offshore contracts, it will also make the competitive situation much more intense for those organizations that come out on top. In the end, those that can survive will be those that can deliver what the customer demands at a competitive price.
 
Susan J. Campbell is a contributing editor for TMC (News - Alert) and has also written for eastbiz.com. To see more of her articles, please visit Susan J. Campbell’s columnist page.
 


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