Study Shows Brazil as Strong Player in Global Contact Center Outsourcing Market

No matter your personal opinion on the outsourcing of jobs to offshore locations, either through contracted vendors or establishing overseas operations, the reality is that for some companies, the practice is making sense. As a result, we will continue to see companies moving their contact center operations offshore.

While the first assumption may be that the center is moving operations to India, the end destination could be thousands of miles from this dominant market. In fact, Brazil is regarded as one of the four key catalysts among the BRIC (Brazil, Russia, India China) nations that are driving service globalization.

Brazil has shown success in both service export and internal economic expansion, according to Zagada Institute’s Brazil Executive Call Center Report 2007: An Emerging Sourcing Giant. Driving this success is the country’s emphasis on contact center Business Process Outsourcing (BPO) and IT services.

Brazil represents the largest economy for Latin America, as well as the region’s largest contact center or voice-based BPO agent population of just over 200,000 agents. This is a significant increase from the agent base of 55,000 in 2001. Brazil’s overall contact center BPO and IT outsourcing revenue is estimated to be US$2.4 billion with about 10 percent generated from international contracts.

According to Zagada projections, the country is on track to have 350,000 agents by the end of 2007, although the country has seen a slow don in its average annual growth rate in the sector. The report reveals that while Brazil has more than 1,000 call center operators, the market is highly segmented with 10 larger centers generating under 20 percent of the market’s revenues.

A larger percentage of Brazil’s centers use advanced e-mail and collaboration customer interaction technology when compared with the U.S. and Europe. Over US$2 billion in revenues are generated by the industry, with 90 percent represented by internal outsourcing and companies who manage their own centers. Roughly 10 percent of revenues are generated from international markets led by the U.s. and followed closely by Europe and Asia.

Available skilled talent is always an issue for companies considering an offshore location for their contact center. Close to 300 of Brazil’s almost 2,000 universities and institutions of higher learning serve the Sao Paulo-Rio axis and graduate 1.2 million students each year. As a result, BPO companies considering Brazil will have access to a steady source of talent.

Zagada found that although Brazil offers a large internal market and an expanding contact center BPO and IT sector, the country also faces a number of internal and external challenges. Internal challenges include rising inflation rates, increasing wages and high levels of software piracy rates. The government projects a 5 percent GDP 2007 growth rate, while most analysts agree on a range under 4 percent.

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.