While India continues to dominate the global offshore call center outsourcing landscape, the Philippines threatens to poach some activity as its own market grows in strength. Firms that have chosen to lock in shareholder value by tapping into the offshore labor arbitrage model via establishing in-house offshore (captive) centers, will look to deliver further returns, either by selling off their captive offshore operations or by outsourcing the processes to third parties – either large or local start up outsourcing service providers.
Over a quarter of a million new call center agent positions will be added in India and Philippines through 2009. Both India and the Philippines will see substantial growth in call centers now that US presidential elections are out of the way, allowing US and UK businesses to ramp up their offshore operations. The increasing diversity of industries present offshore will dilute the market share of early movers like financial services and communications.
Besides the attractions that India and the Philippines offer western firms in terms of low cost access to highly skilled call center and back-office staff, the two markets will also demonstrate substantial growth in their domestic call center markets. By 2009, close to 100,000 APs will be serving the Indian domestic market whilst the Philippines will have 21,600 APs.
Moreover, outsource providers are looking to increase their operational footprints around the globe whilst seeking to provide customers with a broader range of end-to-end solutions. Just 36% of the APs in India were offshore outsourced at the end of 2004 with the remainder located mainly in offshore in-house (captive) operations of big multinationals (MNCs).
However, by 2007, the tables will have turned in the outsourcers’ favor according to Datamonitor. Over the forecast period, new outsourced seats will outnumber captive ones by a factor of 10:1 in India and the outsourcers will continue to hold sway going forward. Just 12,000 net new captive seats will be added between now and 2009.
Datamonitor predicts that more firms are set to follow the likes of British Airways, Citibank, General Electric and HSBC, all firms that have spun off a part or all of their captive operations in India.
Outsource providers are competing to run entire customer processes for their clients, rather than merely the voice-based call center part. The fact that they are able to win this kind of work is testament to the efforts that have been placed on assuring quality control and improving call resolution rates in order to improve customer satisfaction over the past year or so.
