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Firms shun 'risky' offshore call centres for higher-cost local services

Firms shun 'risky' offshore call centres for higher-cost local services

Businesses are opting to pay a 'premium' to ensure continuity of service than dealing with political unrest.

Companies providing offshore contact centre services face a tough battle to win new business over the coming years, as demand in major markets is low, according to a new Ovum report. “Several new barriers to offshoring contact centre work have come to the fore and made it a riskier prospect for enterprises,” says Ovum lead analyst and report author Peter Ryan. “Enterprises feel the reduced prices simply don’t compensate for the potential to lose customers in these tough economic times.”

Ovum interviewed senior executives at leading North American, European and Australian businesses. Only two percent said they would look to offshore their customer service centres in the next 12 to 24 months, while only 10 percent said they would do so within 25 to 36 months. Meanwhile, a massive 80 percent said they had no plans to offshore their contact centres.

He says enterprises cite four key issues: quality of the interaction with end users, stability of the offshore destination, pressure from consumers to keep work in the domestic country, and fears over safety of data.

Ryan says the issue over the quality of the interaction with customer service agents and end users is a key one. “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.”

Recent troubles have also sparked concern over continuity of services. “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,” he adds.

Regions such as India and South America have been established as offshore contact centre locations in recent times, due to their low delivery costs supported by cheap labour and premises. However, Ovum’s research has confirmed that lower delivery costs are not offsetting the concerns enterprises that have not already taken the plunge have about these locations.

Ryan, however, questions whether local markets will continue to be more attractive for CRM outsourcing well into the future.

He says there are good deals to be found in places like Australia, the UK and US due to the economic crisis pushing down labour and premises costs and reducing agent churn. “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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