How the Economy is Affecting Decisions to Outsource Customer Care-
End-User Survey Results
Michael DeSalles Strategic Analyst
June 17, 2009
2
Focus Points
� Introduction
� Contact Center End-User Survey Results
� Outsource Provider Commentary
� Conclusions and Recommendations
3
Introduction
• For outsourcing engagements, what are contact center organizations planning and doing in this down economy?
• Frost & Sullivan surveyed 332 contact center decision makers in Dec 2008 on business priorities for 2009, technology adoption and future initiatives
• Our observations and recommendations focus on the current economic climate
4
Demographics - Primary Verticals
Which industry vertical is your company in?
Primary Industry Vertical
(N=332)
18%
16%
15%
13%
7%
8%
6%
18%
0% 10% 20% 30%
Retail & Consumer
Financial Services
Communications
Healthcare
Travel & Hospitality
Government & Education
Outsourcing
Others
Note: Proportions may not add up to 100% due to rounding
5
Demographics - Primary Functions
Thinking about the contact center(s) you currently manage, what functions do your contact centers serve?
Note: Multiple mention question.
Primary Functions of the Contact Centers
(N=332)
86%
70%
53%
35%
30%
25%
19%
3%
0% 20% 40% 60% 80% 100%
Customer service
Help desk
Tech support
Order processing/entry
Employee services
Collections
Telemarketing
Others
6
Demographics –Contact Center Size
Approximately, how many call center seats does your company have, including all divisions, branches and subsidiaries?
Contact Center Size by Number of Seats
(N=332)
49%
23%
26%
3%
0% 20% 40% 60%
10-99
100-499
More than 500
Don't Know
Note: Proportions may not add up to 100% due to rounding
7
Demographics - Languages
Does your contact center(s) support languages other than English?What other languages do your contact center(s) support?
Support Languages Other Than English
(N=332)
63%
37%
0% 20% 40% 60% 80% 100%
Yes
No
Contact Centers Supporting Other Languages
(N=208)
89%
29%
20%
16%
12%
13%
0% 20% 40% 60% 80% 100%
Spanish
French
German
Italian
Portuguese
Others
Note: Multiple mention question.
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Outsourcing of Customer Care Operations
Do you outsource your customer care operations?
Outsource Customer Care Operations
(N=332)
29%
5%
64%
2%
0% 20% 40% 60% 80%
Yes, some
Yes, all
No
Don't Know
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Reasons For Outsourcing Customer Care Operations
Reasons for Outsourcing Customer Care Operations
63%
36%
36%
30%
19%
18%
18%
4%
0% 20% 40% 60% 80%
Lower Costs
Language Skills
Higher quality customer service
Focus on core competencies
Market focus
Skills
Vendor expertise
Other
What are the main reasons for outsourcing your customer care operations?
Note: Multiple mention question.
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Importance Ranking for Outsourcing Customer Care Operations
Importance Ranking for Outsourcing Customer Care Operations
46%
32%
22%
35%
26%
36%
17%
38%
38%
0% 20% 40% 60% 80% 100%
Cost reduction
Not our core competency
Outsourcers provide excellent
customer care
Rank # 1 Rank # 2 Rank # 3
Please rank in order of importance the following factors for outsourcing customer care operations.
Note: Proportions may not equal 100% since ‘don’t know’ responses are not displayed.
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Primary Reasons For Having Customer Care Operations In-House
What is the primary reason for keeping your contact center operations in-house?
Primary Reason for Having Customer Care Operations In-House
45%
28%
13%
5%
3%
1%
1%
4%
1%
0% 20% 40% 60%
Control of people, processes, and technology
Customer service
Cost
Labor pool and high skill level
Market focus
Other languages
Requirement for high level of English
competency
Others
Don't Know
Note: Proportions may not add up to 100% due to rounding
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Where Outsourced Agents are Based
Where Outsourced Agents are Based
57%
51%
20%
17%
0% 20% 40% 60% 80%
Onshore
Offshore
Near-shore
Remote agents
Where are your outsourced agents based?
Note: Multiple mention question.
13
Work-At-Home Agent Model and Outsourcing
How will the work-at-home agent model influence your decision to outsource?
Work-At-Home Agent Model Influence on Outsourcing Decision
39%
21%
21%
20%
0% 20% 40%
We already use our own
home agents
We will use an outsourcer
for home agents
We will use a combination
of in-house home agents
and an outsourcer
We have no plans to use
home agents
Note: Proportions may not add up to 100% due to rounding.
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Future Outsourcing Destinations
Expansion Plan of Outsourcing Contact Center Operations in Next 2-3 Years
38%
18%
15%
4%
4%
3%
15%
32%
0% 20% 40%
India
Mexico, Central and/or South America
Philippines
Eastern Europe (Czech Republic, Poland, Russia, Turkey and/or
Ukraine)
Western Europe (Belgium, France, Germany, Italy, Spain, and/or
UK)
Other
Don't know
No plans to expand
In what regions do you plan to expand outsourcing of contact center operations in the next 2-3 years?
Note: Multiple mention question.
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Impact of Current Economic Climate on Decision to Outsource
Impact of Current Economic Climate on Outsourcing Decision
38%
26%
25%
8%
4%
0% 20% 40%
Keeping outsourcing
levels the same
Increasing
outsourcing levels
Decreasing
outsourcing levels
No effect at all
Multi-sourcing to
multiple vendors
Will the current uncertain economic climate influence your decision to outsource your contact centers by:
Note: Proportions may not add up to 100% due to rounding.
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Number Of Outsourcers Utilized
Number of Customer Care Outsourcers Utilized
31%
34%
14%
15%
6%
0% 10% 20% 30% 40%
One
Two
Three
Four or more
Don't Know
How many customer care outsourcers do you utilize?
Note: Proportions may not add up to 100% due to rounding
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Given the current economic downturn, what do you believe is the net
effect on your plans for business growth?
“Our pipeline is full…downturns are great for outsourcers”
“Traffic volumes are down due to the economy”
“Deal flows are good..seeing specific call volumes..robust demand for LATAM geographies (bilingual and English Support)..Panama has proved to be good for us…”
“We had unanticipated vertical growth ..…largest in wireless and telecomm.. “
“Some insurance growth…good news in financial services… not as much churn…they are trying to displace their competitors..”
“There is movement in industries where consumers buy new products(Telecomm/wireless)…fixed telecomm more stable ”
“Overall cost going up…this means price increases for some clients”
Interview Feedback
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Given the current economic downturn, what do you believe is the net
effect on your plans for business growth?
“Growing sector:…little behind ..is Healthcare…we’re on the tipping point of that vertical
outsourcing in a significant way..only 10% outsourced…getting better feel for how it’s working.. …2% of global revenues..payer market…$40M part of bus…long process to outsource…3-6 mo. ….sometimes a year before they buy… Provider calls…focus on skills sets that are transactional..PI..or India…large number of nurses that PI exports..types of jobs supportinghealthcare…a great growth story”
“Lots of pressure on cost .seeing big client global vendor consolidation and move to get cost out of the equation..”
“New companies….a lot in the pipeline right now…have to sell hard..18 mo.-2 yr sales cycle…”
“Call volumes down over a broad spectrum (verticals)…must simply improve quality and customer sat. and lower call in rates…big growth opportunity!..1. Selling solutions..2. Growing share of live agent interactions
Interview Feedback
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Factors Influencing Selection of Outsourcing Partners
Rank the top three (3) most important factors that influenced the selection of your outsourcing partner(s)?
Influencers for Selecting Outsourcing Partner(s)
26%
21%
13%
12%
10%
10%
10%
18%
20%
9%
16%
13%
7%
13%
17%
13%
14%
6%
17%
14%
16%
0% 20% 40% 60%
Attractive pricing and cost structure
Expertise in and understanding of my industry
Vendor experience and world-class agent talent
Security certifications, disaster recovery and data privacy
safeguards
Site location and time zone proximity
Advanced technology and infrastructure
Previous long-term relationship. stable and reliable
#1 Reason #2 Reason #3 Reason
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Future Plans To Bring Contact Centers Back In-House
Future Plans to Bring Contact Center Operations Back
In-House
38%
34%
29%
0% 20% 40% 60%
Yes
No
Don't Know
Do you have any plans to bring your contact center operations back in-house?Why are you considering bringing your contact center operations back in-house?
Reasons for Considering Bringing Back Contact
Center Operations In-House
43%
33%
33%
26%
19%
12%
0% 20% 40% 60%
Customer complaints of poor
service
Inferior agent English skills
Promised cost savings not realized
Lack of support from Senior
Management
Brand protection or strategic
direction
Outsourcer did not meet Service
Level Agreements (SLA’s)
Note: Multiple mention question. Note: Proportions may not add up to 100% due to rounding
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Conclusions
� Customer service, help desk and tech support are very well represented in call centers today.
� Healthcare is a growing vertical for outsourced contact centers.
� Spanish will continue to be the lead language.
� Respondents report loss of control is the primary restraint to adopting outsourcing.
� Trend to multiple customer care outsourcers for a single client.
� Placement of remote service reps, esp. home agents, is gaining a lot of
traction in an outsourced model.
� Outsourcers can counter client moves to bring operations back in-house.
� The current economic climate is likely to have a net positive effect on overall outsourcing growth.
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Next Steps
� Request a proposal for a Growth Partnership Service to support you and your team to accelerate the growth of your company. ([email protected])1-877-GoFrost (1-877-463-7678)
� Join us at our annual Growth, Innovation, and Leadership 2009: A Frost & Sullivan Global Congress on Corporate Growth, September 13-16 2009, Hyatt Scottsdale Resort & Spa at Gainey Ranch, Scottsdale, AZ(www.gil-global.com)
� Register for the next Chairman’s Series on Growth:
The CEO's Growth Team™: Marketing’s Role in Driving Growth (June 2nd)(http://www.frost.com/growth)
� Register for Frost & Sullivan’s Growth Opportunity Newsletter and keepabreast of innovative growth opportunities(www.frost.com/news)
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