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August 18, 2005

Offshore contact centers: Latin is the language of low cost

Latin America provides the lowest offshore agent price, while Canada and South Africa offer the most costly prices, according to new Datamonitor research. As cost management represents a major problem for many offshore contact center investors, being able to predict where costs will rise should help investors make informed decisions when considering locations.

By CBR Staff Writer

Latin America is a low cost area ripe for offshoring investment, new research finds.

Datamonitor findings show that Argentina, Brazil and Chile provide the lowest fully-loaded call center agent price point among all offshore locations examined in the study. Due to a large, scalable labor force, growing multilingual capabilities and proactive domestic players, offshore investors will find good customer care prospects in each of these countries. Mexico, despite being slightly more expensive, is also cost-effective.

Conversely, Canada and South Africa are significantly more expensive on a per agent basis. But this is not all bad news for these locations. Considering the legacy of contact center offshoring in both Canada and South Africa, investors will pay a higher price per agent. However, they will generally be guaranteed an excellent quality of labor as well as technology that is second to none.

A brief regional survey of the results reveals India and the Philippines remain the most cost-competitive offshore locations for contact centers in the Asia Pacific region (APAC). However, call center agent benefits are creeping upward, as local players work to reduce attrition levels. Hong Kong and Singapore are slightly more expensive locations due to high living costs, while Malaysia is an immature and cost competitive market.

Egypt remains the most price-competitive market in Europe, the Middle East and Africa examined in the study, due to its scalability and relative immaturity.

Strategic recommendations that offshore investors should follow should they wish to ensure prudent cost management include:

– Analyzing what are the key competitive costs that need to be rationalized

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– Taking the appropriate actions to reduce costs whenever possible

– Seeking diversification opportunities in order to reduce investment concentration risks

Cost management is a huge problem for many offshore contact center investors, and in most cases this is unnecessary. By being able to predict where costs will rise as a percent of total expense based on current trends, prudent financial management and healthy bottom lines should not be difficult outcomes.

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