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As much of North America comes to grips with freezing temperatures at the outset of 2014, developed economies across the globe appear to be shifting back in the right direction. Buoyed by increased consumer and business confidence, call volumes should rise through the coming 12 months, meaning better opportunities for contact center outsourcers. However, it will be imperative that vendors are prepared resource-wise to take on the higher levels of demand present over the last few years, and that they ensure their offerings reflect enterprise requirements for end-user engagement.

Positive numbers mean spike in demand for contact centre services

Across much of the developed world, key indicators are showing that, after five long years, economic growth is finally returning to pre-global financial crisis levels. In the US, 2013 saw the biggest rise in employment in eight years, and consumer confidence has been increasing since mid-2013 (with a similar trend in Australia and Germany over the same period). Equally, the UK has been posting good economic news, with a recent Lloyds Bank survey showing that business confidence is at its highest for 20 years. These numbers bode well for the contact center services space, as a rise in economic activity correlates closely with growth in consumer call volumes.

However, this situation also poses challenges for the outsourced contact center sector. The most important relates to available capacity. The anemic growth of developed economies over the past five years led to many outsourcers only needing to expand organically, and these outsourcers may not be able to handle increased demand for facilities-based workstations in a short period of time. This will be compounded by heightened demand from sectors such as healthcare, utilities, and financial services, which appear set to ramp up their use of contact center services in the coming months. An obvious solution to this problem could be to leverage work-at-home agents, due to their proven ability to ramp up in large numbers in a short period of time. We forecast that home-agent delivery will be on the rise over the next four years, but selling this option outside of the US could be too high a cost for margin-constrained outsourcers. In essence, potentially the first opportunity for outsourcers to truly grow in developed economies in more than half a decade could be restricted by the amount of work vendors can reasonably accommodate.

Vendors need to ensure deeper offerings in 2014 and beyond

In addition to ensuring they are able to handle a rise in contact center work, contact center service vendors need to offer a deeper suite of services that address the growing needs of enterprises. Ovum’s most recent CRM Outsourcing Business Trends Survey indicates that customer retention and increasing revenues are priorities among executives across vertical markets. In 2014, positioning cross-selling/upselling and various satisfaction metrics will not be enough for outsourcers; rather, enterprises will look more favorably on vendors that can help them better understand and get closer to their end-users, as this will enable them to better position products and services.

Vendors with deep knowledge, skill sets, and the ability to fully leverage analytics will be well positioned in 2014. These capabilities tie in nicely with the priorities of enterprise executives, and CRM budgets at the enterprise level are set to be squeezed over the next two years, meaning that firms will have extremely limited capacity to invest in new technologies (and the staff required to operate them). Thus contact center service vendors that have not yet done so should invest in providing analytics for existing and prospective clients, or partner with technology vendors that have these capabilities. Outsourcers should make these services a focal point, as analytics will add another facet to what they can provide to enterprises and will improve the strategic partnership between vendors and clients, all but guaranteeing longer-term, stickier relationships. This has long been a goal of contact center outsourcers looking to move their offerings beyond being perceived as a commodity.

Peter Ryan, Principal Analyst, IT Services peter.ryan@ovum.com

 

 

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