The Call Center Outsourcing Outlook: Developing opportunities in a commodity market

SUMMARY

The call center outsourcing market is a fast, maturing industry that many people now regard as a commodity business, 'The Call Center Outsourcing Market Outlook: Developing opportunities in a commodity market' is a technology management report that will help outsourcing service providers to identify growth opportunities and develop strategies to successfully target them. This report provides in-depth analysis of key market drivers and inhibitors and forecasts to 2008 by region and vertical industry. The competitive landscape is examined in detail including the strengths of key vendors, and strategies for growth including new destinations, expanded service portfolios, evolving pricing models, offshore and near shore, and the emergence of the 'quality sell'.

TABLE OF CONTENTS

Chapter 1 Introduction 20

• What is this report about 20
• Who is the target reader 20
• Definitions 21
• Agent position (AP) 21
• ASP (application service provider) 21
• Call center 22
• Contact center 22
• CRM 22
• IP-architected call center 22
• Multimedia contact center 23
• Outsourcing 23

Chapter 2 Key drivers 26

• Summary 26
• Why outsource? 26
• Vendor recommendations 27
• What should I look for in an outsourcer? 28
• Key future trends 29

Chapter 3 The EMEA call center outsourcing

• market 32
• Summary 32
• Market sizing 33
• Outsourced APs in EMEA 33
• Country insight 34
• Outsourcing traffic 36
• Inbound and outbound traffic 36
• Vertical focus 37
• Introduction 37
• Communications 39
• Propensity to outsource 41
• Distribution and wholesale 41
• Propensity to outsource 41
• Entertainment, media and leisure 42
• Propensity to outsource 43
• Financial services 43
• Propensity to outsource 45
• Healthcare 46
• Propensity to outsource 46
• Manufacturing 47
• Propensity to outsource 47
• Public sector 47
• Propensity to outsource 49
• Retail 49
• Propensity to outsource 50
• Technology 50
• Propensity to outsource 50
• Travel and tourism 51
• Propensity to outsource 51
• Utilities 52
• Propensity to outsource 52
• Competitive dynamics 53
• Traditional outsourcing competitors 54
• Non-traditional competitors 55
• Strategic recommendations 56

Chapter 4 The US call center outsourcing

• market 58
• Summary 58
• Market sizing 59
• Country insight 60
• Impact of the TSR on outsourcers 61
• Outsourcing traffic 63
• Inbound activity will increase as a proportion of total call center activity 63
• Impediments to outsourcing growth in the US 64
• Vertical focus 65
• Introduction 65
• Communications 66
• Education 66
• Entertainment 67
• Financial services 67
• Retail banking 67
• Insurance 67
• Investments and securities 67
• Healthcare and pharmaceutical 68
• Manufacturing 68
• Public sector 68
• Federal government 69
• State and local government 69
• Retail 70
• Technology 70
• Transport and logistics 70
• Travel and tourism 70
• Utilities 71
• Other vertical markets 72
• Competitive dynamics 72
• Systems integrators 72
• Outsourcing providers 74
• Strategic recommendations 74
• Adding more value-add services 74
• Penetrating new vertical markets 75
• Use technology as a competitive differentiator 76
• Establish a global network of call centers in offshore/near shore locations 76

Chapter 5 Offshore outsourcing: India not the only destination 80

• Summary 80
• Introduction 81
• Definitions 81
• Near shore 81
• Offshore 81
• The evolution of offshore and near shore outsourcing 82
• Moving from capital expenditure to operational expenditure 82
• More demand for multilingual services 83
• Demand is growing and shifting eastward 83
• Specific country requirements 84
• US 84
• UK 85
• France 85
• Germany 86
• Rest of Europe 87
• Barriers to off shoring 88
• 'Losing' control 89
• The distance issue 90
• Cultural affinity 90
• Quality of service 91
• Offshore outsourcing strategies 91
• Offshore destinations 92
• The language barrier 92
• Dutch-speaking markets 92
• English-speaking markets 92
• French-speaking markets 93
• German-speaking markets 93
• Italian-speaking markets 93
• Spanish-speaking markets 94
• Profile of the Americas region 94
• Latin America 95
• Canada 99
• Profile of the Central & Eastern Europe (CEE) region 102
• Hungary 104
• Poland 104
• Baltic States 105
• Czech Republic 106
• Profile of the Middle East & Africa (MEA) region 106
• Morocco and Tunisia (North Africa) 107
• South Africa 108
• Turkey 109
• Profile of the APAC region 110
• India 111
• Philippines 111
• Malaysia 112
• Others 112
• Future implications of offshore outsourcing 113
• One-stop shop for end-to-end BPO 113
• The shadow infrastructure 114
• Offshore vs. onshore 114
• Recommendations for vendors 116
• The quality sell 116
• Quality agents 116
• Quality processes 116
• Refine sales approach 117
• Carve a niche and partner for success 117
• Allay customers' fears 118

Chapter 6 Call center outsourcing services 121

• Summary 121
• What should you outsource? 122
• Inbound customer care 122
• Inbound sales 122
• Inbound technical support 122
• Outbound cold calling 123
• Outbound warm calling 123
• Outbound customer service call-back 123
• Outbound collections 123
• New Internet channels 124
• Vendor strategies 125
• Expanding service portfolios 125
• New services 126
• New delivery models 126
• Evolving pricing models 127
• Risk / reward sharing 128
• Efficiency sharing pricing models 129

Chapter 7 Competitive advantage:

• succeeding in a commodity
• market 133
• Summary 133
• Introduction 134
• The bigger picture 134
• Full service providers (FSPs) 135
• IT service providers 136
• Systems integrators 136
• Telcos 136
• Telcos with their own outsourcing facilities 136
• Telcos without their own outsourcing facilities 137
• Offshore and near shore specialists 137
• Technology vendors 138
• Strategic recommendations 138
• New business generation 138
• Delivering best practice 139
• Back office and front office 139
• Understanding customer concerns 140
• Procuring outsourcing 140
• Brand impact 140
• Managing risk 140
• Addressing regulatory requirements 141
• Focus on the Sarbanes-Oxley Act 141
• Focus on the Basel II accord 142
• Focus on data protection 142
• Future market outlook 143

Chapter 8 Key vendors 145

• Competitive landscape 145
• The comfort factor 145
• Competitive strengths of call center outsourcing vendors 146
• Accenture 147
• Service differentiation 148
• Capgemini 149
• Service differentiation 149
• CSC 150
• Service differentiation 150
• EDS 150
• Service differentiation 151
• HP with BT 152
• Service differentiation 152
• IBM Global Services 153
• Service differentiation 153
• ICICI-OneSource 154
• Service differentiation 154
• Wipro Spectramind 155
• Service differentiation 155

Index 156

List of Figures

• Figure 3.1: In-house and outsourced APs in EMEA, 2002 - 2007 33
• Figure 3.2: The EMEA call center solar system 34
• Figure 3.3: Summary of call handling functions 36
• Figure 3.4: Outsourced APs in EMEA by vertical market 39
• Figure 4.5: Proportion of APs in the US, 2003-2008 59
• Figure 4.6: Vertical market comparison, 2003 66
• Figure 5.7: Barriers to offshore outsourcing 89
• Figure 5.8: Risk and reward matrix -- the Americas region 95
• Figure 5.9: Canadian outsourced and in-house APs serving the US market 101
• Figure 5.10: Risk and reward matrix -- CEE region 103
• Figure 5.11: Risk and reward matrix -- MEA region 107
• Figure 5.12: Risk and reward matrix -- Asia Pacific region 110
• Figure 5.13: Offshore outsourced APs are a threat to onshore outsourced APs 115
• Figure 7.14: Service offerings: how the pieces fit together 135
• Figure 8.15: Comparison of profiled vendors' service delivery focus 147

List of Tables

• Table 2.1: Important factors when outsourcing, by country (EMEA) 29
• Table 5.2: Main offshore and near shore outsourcing locations for the major outsourcing customer markets 84