Offshore call center business on decline in 2011: Ovum Survey

November 7, 2011: Outsourcing is receiving little attention in today’s call center business. The word outsourcing is now considered as a bad word in the call center domain. This was confirmed by a report from Ovum, a research organization. The report say majority of the firms are reluctant to outsource their business as they consider it risky to offshore their business.

The survey was conducted in leading companies in Australia, Europe and North America. It seems that outsourcing service providers will have a tough time ahead in terms of acquiring new business.

The report of the poll suggests that only 2 per cent of the companies that were surveyed suggested that they will go for offshoring in a year’s time or within two years. Ten per cent of the companies indicated that they plan to go for outsourcing within 2 to 3 years. 80 per cent of the firms that took part in the poll indicated that they have no plans to offshore their call center function.

The result of the poll is a matter of concern for those companies providing offshore call center services, which are dreaming of winning new business from these areas. Cost reduction is one of the important reason that drive organizations to outsource their call center functions. Most of the companies face increasing risk in offshoring due to new barriers that have come to light. Now the executives of the firms are of the view that the cost saving will not outweigh the risk involved in offshoring.

 The factors that prevent companies from offshoring are the quality of service offered by the call centers, stability of call center location, forces that compel the companies to operate in the domestic country and data safety.

The low cost strategy adopted by call centers in India and South America has been instrumental in winning business which has made these regions, favorite destinations for the companies. According to Gillian Joyce, executive director, Business Process Association of the Philippines, they were aware that the growth of the call center service will slow down and that the global market will always remain larger than what the service providers can supply. She said that the growth will be larger in non voice BPO services and IT services and that Philippines have competitive advantage in these areas.

Even though a fear exists in the minds of the executives, there are still opportunities for the outsourcing service providers. The service providers should be able to win the trust of the clients, in order to acquire new business in addition to adding value to the clients business.

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