In response to both economic conditions and evolving business models, today’s Contact Center Services (CCS) market is entering relatively new territory, presenting businesses with both challenges and opportunities.
Although the CCS outsourcing market has slowed in recent years, supplier delivery models have evolved so that top-performing firms demonstrate clearly established best practices and the ability to leverage scale, technology, software tools and process discipline. As a result, outsourcing at least part of the CCS function is today a common practice for many Fortune 1000 firms, and services to low-value segments of the Customer Service Portfolio are typically outsourced to gain cost efficiencies.
Moreover, service providers are increasingly able to leverage their capabilities across multiple clients, and shift the burden of investing in new CCS infrastructure from clients. Provider work flow tools today are able to integrate multiple inbound work queues from different channels (phone, email, chat, web, social media), prioritize them and present them to Customer Service Representatives (CSRs) for processing and handling.
The @Home model makes inroads: In addition to this broader evolution, the “@Home” model has seen significant growth. One key factor has been the economic downturn in the United States. High unemployment rates, coupled with the attractiveness of flexible work schedules, have produced a qualified, motivated pool of available agents.
Home-based agents are also increasingly able to securely access a Fortune 1000 firm’s customer information. In addition to enabling information, applications and phones to be locked down, online screening, recruiting, training and oversight/supervision tools have evolved to the point where they are more effective than traditional models.
@Home agents tend to be better educated, more mature (8-10 years older) and more stable. The benefits of flexible scheduling, job security and not commuting boost job (as well as customer) satisfaction rates and significantly reduce attrition.
The @Home model can optimize efficiency and productivity by layering agents to match call arrival patterns and/or unexpected surges and lulls in volume. By requiring the physical presence of agents, brick and mortar centers lack this inherent scheduling flexibility of the @Home services delivery model.
In response to these trends, several firms specializing in the @Home model have emerged, while all major CCS providers have expanded their portfolios so that @Home agents now comprise 10 percent to 20 percent of the agent population. Internal delivery models have similarly increased their agent pools to include a larger percentage of @Home agents.
A fragmented market: The CCS outsourcing market today remains highly fragmented, with over 350 firms providing services. These firms vary significantly in size, capabilities, global footprint, market strategy, technology, process and vertical industry knowledge.
Market share is similarly fragmented, with the top ten providers holding less than 25 percent of market share. The business is characterized by the conflicting dynamics of consolidation on the one hand, and the emergence of new, smaller entrants positioning themselves to provide “Top Ten” attention to smaller client organizations. Finally, the growing popularity of the @Home model is driving the development of an industry sub-sector specializing in that approach.
Questions to consider: In today’s fluid environment, selecting a service provider that best fits business requirements can present a challenge. Clients need to address a number of questions to determine the role of outsourcing in their customer service portfolio. These include:
Are our customer support costs competitive? Compared to what?
Are the current support costs sustainable over the long term?
Do we really represent “best practices” in customer support and service? Or can someone else do this better?
Is our service delivery model evolving with the technology options our customers have access to?
Are we leveraging the latest technology to bring fast and efficient service options to our customers?
Are we developing and refining self-service options that a segment of our customers continue to use and appreciate?
Do our customers have a “common experience” regardless of the channel or location from which they contact us?
What segment of our customer service portfolio would be a good fit for outsourcing?
Mike McMenamin is a Director with ISG.
Information Services Group
(ISG) released a Market Tutorial on sourcing Contact Center services to
the AccessISG™ Sourcing Portal earlier this month. As a special SIG
member-benefit, SIG members receive complementary access to all of the ITO and
BPO Market Tutorials available at the AccessISG™ Sourcing Portal. SIG members
should contact SIG's Geoff Talbot (contact
info below) to receive this special member
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