Why onshore call centres are back in vogue
Editors note: A recent article in CMO has highlighted a shift in onshore call centres (in their own country) from the recent trends in pursuing cheaper offshore alternatives typically through outsourced providers.
Whilst the article was written for a U.S market, there is a special mention for the Asia/Pacific region and it certainly provides some interesting insights into the changing landscape of the outsourcing value proposition that is starting to come to fruition.
In fact, as recently as September 2018 both Whirlpool and iSelect have announced they are bringing offshore jobs back to onshore call centres.
And with the $AUD losing value to the $USD, a host of offshore call centre options continue to become less commercially palatable.
With most companies now expecting to compete on CX, not price or product, it’s certainly a changing landscape.
Why Onshore Call Centres are back in vogue
There has been a notable increase in contact centre onshoring activity in recent years, according to new research from outsourcing consultancy and research firm Everest Group.
In 2015, the percentage of contact centre contracts with significant onshore delivery climbed to 53 per cent, up from 49 per cent in 2013 and just over a third (35 per cent) in 2010.
”The call centre outsourcing value proposition has transformed over the years from arbitrage-driven cost containment to focus on delivering business outcomes such as high customer retention, says Everest Groups research program director Skand Bhargava. The focus on driving best-in-class customer experiencesalong with technological advancements such as advanced analytical solutions, automation and multichannel solutionsis driving the move towards higher onshore delivery”.
Indeed, so-called enabler technologies accounted for about half of the reported investments by contact centre providers from 2014 to 1015 with analytics, automation and multichannel tools the biggest areas of spending, according to the Everest Group report.
CRM and communication technologies have become table stakes with most, if not all, providers including them within their portfolio, Bhargava says.
In order to differentiate themselves in the hyper-competitive call centre outsourcing landscape as well as cater to enterprise needs, service providers have invested in enabler technologies.
HGS, for example, launched its DigiCx platform, which incorporates automation and analytics to deliver chat-as-a-service and other self-service capabilities.
WNS introducedRePAX, an automated, on-demand solution to help airlines better manage flight disruptions with minimal manual intervention. And TeleTech is selling Humanify, a software-as-a-service based customer experience solution and also acquired Revana AQ360, an integrated analytics platform for sales and marketing.
Technology is common ground
While companies must pay more for onshore call centre agents (offshore labour rates are typically 40 to 55 per cent of onshore rates), increased automation has helped defray some of the extra expense of local labour.
While companies are ready to pay more for better quality services, increased technology leverage in a traditionally labour-intensive contact centre space has offset some of the additional cost, Bhargava says.
In addition, companies are increasingly adopting a work-at-home model for agents, which incurs lower operational costs than onshore full-time-equivalents (FTEs). Work-at-home agents are typically 5 to 10 per cent cheaper than on-site professionals in the U.S., Bhargava says.
Technology is the common thread explaining higher automation, leverage of at-home agents, and non-voice channel mix, which are the key factors driving down the cost of services and providing breathing space to companies, says Bhargava.
The goal is to maintain total cost of service while enhancing the functionality and impact.
Offshore to onshore to offshore
In the shorter term, more call centre work will move onshore, according to Bhargava.
But as offshore locations are able to attract and train the higher-level talent required to deliver effective chat services and other non-voice capabilities, offshoring will again increase its share of the call centre work.
The global contact centre spend currently stands at between $300 and $320 billion dollars, of which 25 per cent is currently outsourced to a third party, according to the Everest Group.
Contact centre providers have increased their share of industry spending in recent years, and Bhargava expects that trend to continue for a number of reasons.
Enterprises already outsourcing contact centre work will be renewing their contracts and expanding the scope to include work that previously resided in-house, he says.
In addition, many enterprises lack the skills and best practices in-house to manage non-voice channels, value-added services (such as analytics), and automation, and will be looking to third parties for talent and expertise.
Finally, Bhargava says, there should be increased contact centre outsourcing in emerging geographies in the Asia Pacific region, for example, which call centre services had experienced lower market penetration to date.
Its a period of growth and transition for the industry.
The last four to five years has witnessed a gradual shift in the contact centre outsourcing value proposition, says Bhargava. From being a labour-intensive [category of] work, contact centres have transformed dramatically with higher leverage of analytics, non-voice channels, and enabler technologies and now early signs of robotic process automation (RPA) being adopted.
These shifts are fundamentally changing the way contact centre outsourcing [is] delivered and perceived.