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Sunday, February 1, 2004
Global outsourcing

After all the hype surrounding offshore call centre outsourcing during 2003, and concerns of jobs moving overseas, a new report by independent market analyst Datamonitor, predicts that only 5% of an estimated 4,78 million agent positions worldwide will be located offshore by 2007. The report, ‘Global Offshore Call Centre Outsourcing: Who will be the next India,’ forecasts the number of offshore agent positions in 22 countries through 2007 and advances the discussion for and against offshore outsourcing.

According to Datamonitor, 241 100 agent positions will be located offshore in 2007. That number represents just 5% of the total global call centre market.
“The focus has shifted towards selling outsourcing rather than selling ‘offshore’,” comments Ryan Powell, call centre technology analyst with Datamonitor and author of the report.
“Once firms have outsourced to a third party, it becomes much more acceptable to move that work offshore,” he adds. The numbers and analysis provided help to demystify the threat that offshore poses to domestic jobs.
Mexico, South Africa (seen as a hidden gem of offshore call centre outsourcing) and Malaysia are among the leading locations. They are growing in stature at the expense of India and the Philippines whose share of the offshore market will drop to 64% in 2007 compared to 70% in 2002.
Firms are seeing increasing demand for non-English-language services and are balancing their global outsourcing portfolio with call centres in different geographical locations. For example, 60% of Spanish speakers in the US are of Mexican origin. Thus Mexico will experience massive growth in the number of call centre agent positions serving offshore markets, primarily the US.
Datamonitor believes that claims companies are rebelling against outsourcing to foreign shores because of linguistic problems, especially as concerns agents’ accents. “As more countries offer offshore outsourcing, anecdotal evidence of bad call centre experiences will continue to appear in the media; but the real issue concerns the agent’s ability to relate to the consumer on a cultural level,” says Mr Powell. 
Firms would do well to define what part of their operations is being outsourced. They should establish cost and performance benchmarks in advance of implementing any change so that quantifiable return on investment can be demonstrated. The report suggests carrying out extensive due-diligence to ensure the right country and the right outsourcing partners are selected and then allocating adequate resources and real-time monitoring technologies to ensure the ongoing success of the operation.

Copyright © Insurance Times and Investments® Vol:17.1 1st February, 2004
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