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Latin America Contact Center Outsourcing Services Markets
Frost & Sullivan, May 2008, Pages: 105
Latin American Contact Center Outsourcing Market Benefits from the Improved Economic Situation in the Region
Latin America is expected to sustain its good economic form for the sixth year running in 2008, giving all countries in the region many reasons to rejoice. This healthy economic climate has boosted the contact center outsourcing services market, which grew by 25.58 percent in 2007 to reach $4.70 billion in revenue. Business in the domestic market accounted for 78.22 percent of this revenue, while the remaining 21.78 percent ($1.02 billion) was obtained from offshore contact center services. Offshore services revenues in 2007 grew by 28.5 percent over 2006 and are expected to continue growing at over 20 percent at least for the next two years. 'The Latin American contact center outsourcing market witnessed a remarkable performance in 2007, mainly driven by the growing market demand and increasing prices,' says the analyst of this research. 'The current positive economic climate and future prospects, coupled with greater acceptance of outsourcing across several industries, are likely to drive double-digit growth – but at a decreasing growth rate - for the next five years.'
Despite falling growth rates, the market is far from saturated. It is at different development stages in various countries. While most countries are reaching maturity or have already done so in terms of quality of service (QoS) and infrastructure, the entrants (Peru, Nicaragua, and Guatemala) are at the early development stage. Demand has been especially dynamic in Colombia and CaCar in 2007, resulting in several technological advances, product developments, and expansion of client base to include airlines and hospitality. The Latin American market is fragmented, with eight global participants sharing 41 percent of the total market. Sixteen large regional and local outsourcing companies accounted for 38 percent of the market, while the other regional and local mid-sized and smaller companies represented the remaining 21 percent in 2007.
Need for Bilingual Agents Escalates as Contact Centers Proliferate
The intense competition among businesses in the booming Latin American economy has made it vital to acquire and retain customers. Contact centers can greatly help enterprises in their efforts to achieve higher customer retention, improve customer satisfaction, and obtain new customers. They also help marketing teams streamline campaigns, product development teams understand market needs, and business development teams start new revenue streams. Considering its huge advantages, verticals are increasingly considering the option of outsourcing these functions, especially since they are not the core strength of the company.
The increasing outsourcing of contact center services has highlighted the severe shortage of bilingual human resources in the region, especially in countries in Central America, where English is not the primary language of communication. In many places, private companies and the government have been implementing programs to improve the standard of spoken English since 2006. However, these efforts are usually inadequate and provide only long-term results, compelling companies to provide specific language and technical skills training to future employees. 'Nevertheless, in some countries, many agents have multilingual capabilities and speak Spanish, English, and in some cases, Portuguese,' notes the analyst. 'These agents allow companies to support the full range of their customers from a single location, driving up the revenues from that country.
During 2007, Latin America maintained a favourable economic situation that allowed growth in nearly all the countries of the region. Driven by this positive environment, the Contact Center Outsourcing Services Market grew 25,58 percent in 2007, reaching a total of $4,70 billion. Even though the market is still distant from saturation, the market stage varies among countries. With the exception of the new entrant countries (like Peru, Nicaragua and Guatemala), most of the region is reaching maturity or has already do so, in terms of QoS and Infrastructure.
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