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Industry Research : Businesses Shun 'Risky' Offshore Call Centres
The offshore call centre business is likely to get tougher in the coming years, as businesses worry more about losing customers due to offshoring, according to a report by Ovum.
The report, which is based on a survey of senior executives at major North American, European and Australian businesses, has revealed that demand for offshore contact centre services is slowing down.
While India and countries in South America have increasingly become major hubs of call centre services, the results of the Ovum survey will make disturbing reading for a number for operators, with only two per cent of the executives surveyed saying that they would look to offshore their customer service centres in the next 12 to 24 months and only 10 per cent saying they would do so within 25 to 36 months.
Almost 80 per cent of the executives surveyed said they had no plans to offshore their contact centres and Ovum analyst Peter Ryan said the results show that despite the lower delivery costs on offer businesses are becoming cagey about establishing offshore contact centre locations.
"Several new barriers to offshoring contact centre work have come to the fore and made it a risker prospect for enterprises," Mr Ryan said.
"Enterprises feel that the reduced prices simply don’t compensate for the potential to lose customers in these tough economic times."
The key concern for companies is the quality of the interaction with end users as they become mindful of angry customers unhappy with the quality of the service provided to them.
"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," Mr Ryan said.
Stability of the offshore destination, pressure from consumers to keep work in the domestic country, and fears over safety of data are also important concerns that are making companies think twice about outsourcing.
Can business afford onshore?
However, there are doubts about what impact this will have on the domestic market and whether the trend of keeping operations offshore is sustainable in the long term, with Mr Ryan saying that the economic crisis has worked in favour of many companies as labour and premises costs dipped downwards.
"This has helped some businesses to move their contact centres back onshore, but the question is, how long will that scenario be sustained?", Mr Ryan said.
It’s a particularly important consideration here in Australia, which for all intents and purposes did not have a recession.
According to Mr Ryan, call centre pricing in Australia is still among the highest anywhere globally and there is still a question mark about whether Australian companies can afford to remain onshore.
Posted by Veronica Silva Cusi, news correspondent
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Published: Monday, October 24, 2011