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Latin America Contact Center Outsourcing Services Market 2010
Frost & Sullivan, Nov 2010, Pages: 122
This study examines trends in the Latin American contact center outsourcing services industry and forecasts market demand. We provide an extensive coverage of services delivered both in each of the local markets and those provided from these countries to others overseas. The study only shows data for outsourcing offshore services, therefore excluding those offshore operations in house. In this study, revenues have been defined as the revenues received by outsourcing companies for the provision of customer-agent interaction services in all the countries under operation including Argentina, Brazil, Caribbean & Central America, Chile, Colombia, Mexico and Peru.
This Frost & Sullivan research service titled Latin America Contact Center Outsourcing Services Market 2010 examines the trends in the Latin American outsourcing services industry and forecasts market demand. The study provides extensive coverage of services delivered in each of the local markets as well as those provided from these countries to those overseas.
Market Overview
Quest for Greater Efficiency and Lower Costs Fuels Outsourcing in Latin America
Notwithstanding the bleak economic scenario worldwide, the Latin America contact center outsourcing services market witnessed growth in revenues and agent workstations in almost all countries barring Mexico and Chile. The economic downslide has created two contradictory outcomes in contact center outsourcing in Latin America. Firstly, the market from existing customers has slowed, particularly for those with offshore sites and telemarketing operations. Secondly, a substitution effect has mitigated the demand contradiction as new clients force outsourcers to lower costs and improve productivity and efficiency. “Some clients have frozen the expansion of contracts, while others have demanded additional services from providers in order to preserve existing engagements,” notes the analyst of this research service. “In response, providers have reduced internal costs, diversified locations, improved agent efficiencies, and created innovative solutions for clients.” This is particularly true for top tier global providers. In some cases, this has meant reduced price points, a decrease in salaries, and a reduction in new hires. A few years ago, it was very common for international companies to use several outsourcing providers. During the last two years, there has been a growing trend toward vendor consolidation. Market participants report that clients have focused on managing fewer provider relationships.
While most of the clients still consider outsourcing from the viewpoint of cost-advantage, outsourcers have started to see their participation in the outsourcing business far beyond the traditional services that they used to provide. Thus, they are looking to venture into more complex enterprise processes such as billing, accounting, financial report, hiring, recruiting, legal services, and so on. For clients, the recent economic crisis has driven home the value of portfolio diversification. It appears that the heaviest loss of volumes and revenues were incurred at offshore businesses with the United States and Spain. Telemarketing activities in the financial services sector were also negatively affected. “Offshoring to North American and European markets will remain a priority for providers in Latin America,” says the analyst. “However trends point to an increased interest in providing services to other countries in the region.” For example, during 2009, a large volume of inbound calls originating in Chile was routed to Peru. It is likely that this trend will increase in 2010 through 2011. Indications reveal that other markets, such as Argentina, will investigate nearshore options to lower their costs.
The spectrum of outsourcing services is expanding in Latin America as vendors strive to balance the need for commoditization against the inevitable rise of lower-cost competition and price erosion. Outsourcing companies should focus on the basics in their messages to customers. Businesses require and expect to deal with secure and reliable partners. Providers should seek to highlight those features and capabilities of their services that address specific customer needs. Growth strategies for vendors can be broadly categorized into activities focused on differentiating a provider through the development of unique internally driven characteristics and through externally focused business development initiatives.
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