Where Call Center Outsourcing Is, and Where It's Heading


Where Call Center Outsourcing Is, and Where It's Heading

By Paula Bernier, Executive Editor, TMC  |  December 29, 2015

The call center outsourcing industry is rapidly changing. Technology and locations are always evolving, which means that it can be hard to keep up with the right information. This interview with Corey Kotlarz, president of Outsource Consultants, explains some of the latest trends in call center technologies, the current most popular locations for outsourcing, and where the call center outsourcing hot spots will be in the near future.

What role has technology played in the growth of the outsource call center industry?

Kotlarz: All aspects of technology – from workforce software and ACD call routing software to predictive dialers, interactive voice response, and now multichannel support –

have played a significant role in the growth of the industry. Multichannel is the new evolution. It involves all customer touchpoints like voice, live chat, email, social media, and SMS. Technology is allowing everything to become much more efficient and allows organizations to drive performance and growth. The most recent hot trend in the call center industry is cloud-based technology. The cloud enables small and mid-sized BPOs – or any company, for that matter – to deliver the same robust features and capabilities as the largest BPOs i.e. ACD, predictive dialer, IVR technology, live web chat, email, ability to record 100 percent of all calls, and reporting dashboards. So now the small and medium BPOs are able to play at that level of the big guys in the industry.

India was the top location for call center outsourcing 10 years ago, but recently the Philippines has become the hot spot. What is the reason for this shift?

Kotlarz: Ten to fifteen years ago, major corporations were outsourcing to India as a cost reduction strategy. India did well in regards to reducing costs. Historically, as well as today, India is very good at technical support-based applications with knowledgeable, intelligent, and highly skilled agents. However, there was some level of dissatisfaction among consumers based on cultural and language disconnect.

Over the last five years, the Philippines has grown rapidly and has become the largest call center outsourcing market in the world, projecting over $25 billion in outsourcing revenue next year. This is due to a strong understanding of American culture. Filipino schools teach English, which leads to very good English-speaking agents. Thus, the customer experience due to the agent quality has been enhanced tremendously with this shift to the Philippines. In the Philippines, telemarketing and customer service outsourcing are growing particularly fast. Filipino call centers can be cost competitive, on par or close to the cost model of India. That is why the country’s popularity has become so strong. They have all of the pieces to the puzzle, such as the telecommunications and Internet infrastructure, awareness of the cultural aspects of the United States, and the English-speaking agents.

Where do you think the outsourced call center industry is going in terms of location(s) and technology? Will there be a new hot spot in the near future?

Kotlarz: With Fortune 1000 corporations moving their outsourcing from India to the Philippines, many of the large corporations that are outsourcing are now all over the country and over saturation will become a problem. These corporations are putting all their eggs in one basket, and now they need to add redundancy by outsourcing to an additional geographical region to diversify their risk and exposure. Their goal is to find the same features and benefits of the Philippines: great English-speaking agents, great culture, quality education, and similar pricing, which can be found in near-shore markets such as Nicaragua, the Dominican Republic, Honduras, Jamaica, Belize, El Salvador, Jamaica, and Mexico. In the next five years, there is going to be significant growth as the neighboring regions’ cultural affinity is strong, and the Internet and telecom infrastructure has been building out over the last several years. Near-shore market growth is going to be the next Philippines, if you will. As the cloud-based call center software technology grows, multichannel capabilities allow call centers to open up in these near-shore markets with all the latest and greatest features and functionality. Personally, I’m a big fan of Belize and Guyana. The language of choice within the educational system is English. English-speaking agents in those countries are very strong. I see growth in those two countries over the next several years.

While the Philippines and India have been popular choices for companies looking to outsource with call centers, your company likes to recommend hidden gem locations in addition to the traditional top 10  largest BPO outsource call center options. What is the reason for this?

Kotlarz: Outsource Consultants is always looking for the best vendors in the marketplace and the best regions that are not oversaturated. We don’t want to recommend a center or region that will be oversaturated with too many call centers in the next two to three years. We’ve seen that trend in more mature tier-1 markets like Manila in the Philippines: it’s a big city, with oversaturation of outsourced call centers, leading to higher agent attrition rates. However, cities like Cebu or Davao City in the Philippines haven’t become as saturated yet, and still offer all the benefits of a Philippine call center. Outsource Consultants’ business model is that we don’t typically work with the top 10 largest BPOs that are the billion-dollar players in the market. We look to partner with the mid-tier, hidden-gem organizations, meaning 300 to 5,000 seats. These organizations are more flexible, hands on, having unique specializations as far as industry vertical markets, call-type specializations (inbound, outbound), and service-type focus such as customer care, technical support, sales, or lead generation. We like to work with the mid-tier call centers so that you’re not a small fish in a big sea, but an important strategic partner of these mid-tier centers. Clients have relationships with the executive team, and we feel that’s a much more constructive partnership than working with the big organizations where if you’re not outsourcing 100 or more seats, you’re not going to get the attention of the executive team, thus the performance would not meet most standards. That is, in essence, the philosophy behind Outsource Consultants, which has led to higher satisfaction and enhanced performance for our clients.

Edited by Kyle Piscioniere
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