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August 7, 2009

Offshore call centres here to stay

Analysts point towards Philippines and South Africa

By CBR Staff Writer


All the bad press in the UK about perceived poor service has done nothing to slow the move overseas of customer call centres, and contact centres will continue to be pushed offshore a latest analyst assessments has revealed.

“Despite struggling against overwhelmingly negative public opinion the benefits of moving work to low-cost locations are now well established, and it is clear that offshoring is here to stay” the report from Datamonitor concluded.

The market-watchers said that the Philippines has developed into the second most important location behind India.

It has also suggested that over the next five years some 10% of all contact centre agents serving the UK will be based out of South Africa.

Earlier research by KMPG had identified several other locations considered as future hot-spots for call centre operations including Eygpt and Chile. 

The consultants advised that companies considering call center placements need look closely at locations at the city level rather than at the country level, however.

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It noted, “Talent suited for call centres may vary across cities due to language skills – the workforce in Cairo speak Arabic and English, while those in Santiago speak Spanish and English.”

KPMG found that while these and other locations can offer a relative cost advantage to major outsourcing markets, the size of the arbitrage varies greatly. Typically, cities in developing countries such as Vietnam, Chile or Romania currently offer a larger cost advantage. 

Likewise, the quality and nature of the talent pool varies.

Gdansk (Poland), for instance has a large number of research and development institutions. The universities in Campinas (Brazil) are known hubs for innovation, producing a large number of patents. Ahmedabad (India) produces a large number of accounting graduates. The talent pool in Cairo has an inherent service orientation, on account of the booming and long-standing tourism industry in Egypt. 

Certain governments are also taking active interest in marketing their cities to IT-BPO companies and are offering support and incentives.

Jeff Smith, CEO of Teleperformance UK who commissioned this latest appraisal by Datamonitor commented, “Offshoring isn’t right for every market and customer base. There is no doubt that it has a role to play and is unequivocally right for certain markets.”


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