Offshore Outsourcing Driving Contact Center Growth in Asia Pacific

Despite the negative press that the term off shoring tends to generate, the reality is that we are a global economy and many companies can maximize customer service operations by considering facilities in another country. One such country that is enjoying considerable contact center growth is that of the Asia Pacific.

Growth consulting firm Frost & Sullivan has produced new analysis that points to low labor cost, increasing competition, globalization, increased IP (Internet Protocol) adoption and improved network infrastructure as driving the contact center outsourcing market in Asia Pacific.

While high growth in both domestic and offshore outsourcing is expected in the coming years, offshore outsourcing is anticipated to drive a majority of that growth. Customer service and technical support services in the banking, telecommunications and technology sectors are on the rise and will likely fuel this growth.

According to the report from Frost & Sullivan, the Asia Pacific industry, which covers 13 major Asia Pacific economies, produced revenues of US $7.2 billion in 2005 and estimates indicate that the industry will be worth US $25.1 billion by the end 2012.

Frost & Sullivan industry analyst Shivanu Shukla, offered that offshore outsourcing is a global phenomenon that has driven growth in the contact center outsourcing market in Asia-Pacific and expects to continue to be the key driver for growth. Proximity to the West, cultural similarities within Asia Pacific and increased focus on outsourcing and offshoring by the governments in Asia Pacific are all expected to boost growth.

US companies using India as a back-office hub for their administrative functions has led the offshore outsourcing trend. Many enterprises today from not only the US, but also the UK have outsourced significant portions of their customer care functions to countries such as the Philippines and India. Contact center outsourcing contacts serviced out of the Asia Pacific region from these two countries has represented more than US $2.17 billion in 2005.

Shukla noted that as the contact center market in Asia Pacific continues to return strong growth, the demand for skilled agents increases in tandem. Since employment as a contact center agent is not perceived as a great career option in most parts of the region, available talent pools are lacking. In addition, inadequate compensation and incentives are leading to higher attrition and agents tend to move fast within the industry.

Frost & Sullivan recommends that outsources offer structured career paths and better incentives to reduce attrition. The firm also highlighted the need to train and coach agents and leaders in order to build a strong middle management team as a necessity to retain employees.

Data security and customer information issues have been a key area of concern for customers and companies alike and as a result, outsourcers in India and other offshore destinations are implementing stringent measures to ensure that data security is maintained. ISO and COPC (Customer Operations Performance Center) certifications, along with Six Sigma processes are gradually being adopted by outsourcers to increase the confidence level of customers and enterprises that outsource their customer information to the Asia Pacific region.