Gauteng Business News

Send  Share  RSS  Twitter  19 May 2010

CONTACT CENTRES: Money to Be Made in Outsourced Contact Centres


Recent Gauteng Business News

Now is the time for organisations to capitalise on the economic slowdown to take advantage of emerging opportunities. Outsourcing business processes such as debt collection and customer relationship management is one sure way to free up staff and management to focus on core business. Smart businesses will leverage the available capacity in the local contact centre market, which is still recovering from the adverse effects of the economic slowdown.

Explains Paul Fick, MD of Spescom DataFusion, a business communication and customer interaction solutions company providing contact centre and enterprise telephony solutions and services: "Outsourcing customer support and marketing to specialised contact centres can be an important strategic driver of new business and improved service for companies in 2010 - especially as the economy regains some lost momentum."

Previously, many organisations made use of outsourced contact centres to handle the overflow business of their in-house contact centres or to cater for special campaigns. Examples are special marketing campaigns, customer satisfaction research, debt collection and cross and up-selling campaigns.

With the economic slow-down, in-house contact centres were suddenly running below capacity, and so too were outsourcing contact centres. However, this is changing.

Notes Keryn House, CEO at BPeSA Gauteng (BPeSA), "The down-turn has been felt by our local call centres as contracts are delayed or downsized while belts are tightened. However, we have seen increased international interest in South Africa which bodes well for our future in BPO, especially in back office processes."

As the economy starts accelerating again, demand for outsourced seats will start increasing. But Fick notes that there may be some initial lag as in-house capacity is first taken up and the typical post-recession reluctance to commit is overcome. This leaves the field wide open for smart businesses to gain immediate advantage by leveraging outsourced services in what is still a buyers' market.

Comments Spiwe Chireka, ICT Industry Analyst for Frost and Sullivan Africa:

"BPO continues to be driven by businesses wanting to manage their costs. And as the cost of doing business continues to rise, so will the need for outsourcing. Furthermore, there is a growing need to mitigate geographical risk when it comes to outsourcing and in response international companies are increasingly adopting multi-sourcing strategies. The direct result of this is that locations such as South Africa are increasingly being considered as alternative destinations to the main Tier I destinations in Asia.

"That said, the global BPO industry did experience a slump from the latter part of 2008 and during 2009 in line with the global financial crisis.

However, in order to stay ahead, no matter how glum the economic environment, outsourcers must continue to invest in up to date technologies, not only for improved efficiencies but also as a key source of competitive advantage.

"Frost and Sullivan believes the upturn for the BPO industry will begin during 2010. This is partly attributed to the upcoming sporting event which is expected to generate the much needed visibility for South Africa as a viable business destination and better yet, an outsourcing destination. This however hinges on the ability of relevant industry organisations to run effective promotion activities in the run up to and during the event. Frost and Sullivan believe there are event related opportunities for outsourcers in the customer services area, as key sectors such as telecommunications and financial services gear up for the high influx of visitors expected for the tournament."

"In a market where there is more on offer than what is being bought, there is always room for negotiation," says Fick. "And there are some niche areas where it makes good sense to outsource."

Significant advantage can presently be gained by:

.Contact centres offering key services that are currently being

affected by increased business related to the upcoming sporting event -

e.g., airlines and the hospitality industry;

.Organisations needing solutions for specialised services - e.g.,

seasonal marketing and debt collection.

By making use of outsourced contact centres with the right SLAs and high-level skills in place, organisations in hospitality and travel related industries can ramp up their service significantly, also improving customer acquisition and retention, and even up-selling and cross-selling of products where partnerships with other related services (e.g., air lines and car

rental) have been made.

Outsourcing functions such as debt collection and service-oriented communication can also provide organisations with considerable advantage as they marshal resources to concentrate on core business.

Says Fick: "Debt collection is seasonal with high activity at specific times of the month and specific times of the year.The rest of the time, capacity and resources allocated to this activity may be idle.With outsourcing, in-house capacity utilisation and demand can be balanced and the gaps filled by contracting with an outsourcer. Debt collection is a specialised function and requires a very different approach compared to most other contact centre activities. It is thus advisable to make use of a suitably skilled outsource provider.

Further drivers for outsourcing contact centre functions are that the price of international connectivity is continuing to come down and alternative service providers are emerging. This means that potential investors in South African outsourced contact centres can now have certainty with regard to high level disaster recovery and business continuity support. Also, local outsourcers can offer their services offshore at a competitive price, with better guarantees of service levels.

Concludes Fick: "A contact centre must be strategic in nature. It is an expensive investment in people, process and technology, and as such, should make a significant difference to the organisation's positioning and business.To drive customer satisfaction and to achieve success in telemarketing, collections and remote selling, a contact centre needs to be correctly staffed and adequately supported by a robust underlying architecture and flexible applications. Businesses can certainly gain advantage by assessing the strengths and weaknesses of in-house contact centres, assigning projects accordingly and making use of professional outsource contact centres where necessary."

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