Datamonitor Releases New Report: The Future Of Outsourcing

Datamonitor Releases New Report: The Future Of Outsourcing

Schelmetic, Tracey E

Outsourcing is increasing its reach in terms of vertical industry as well as geographic scope. While the firms investing in it are wide-ranging, their individual needs are all similar in that they need to reduce overheads as much as possible. Yet the outsourcing phenomenon is poorly understood. In its new report, “The Future of Outsourcing,” market analysis firm Datamonitor examines what lessons from the past the new wave of outsourcing can learn from and what will drive its success going forward. Datamonitor’s report examines outsourcing in automotive, energy, healthcare, technology and financial services markets.

Outsourcing is continuing to grow across all vertical markets, and contact centers are no exception. However, western domestic contact center outsourcing is slowing in the wake of new business realities and offshore locations providing high levels of customer service at a lower cost. Many investors in the U.S. and Western Europe have adopted to “nearshore” models as a way of moving their operations to cheaper locations. Simply put, they locate their facilities in relatively close proximity to the markets they service (e.g., from the standpoint of U.S. investors, Canada and Mexico). However, to derive maximum profits from outsourcing, many are now using the “bestshoring” strategy, which involves tailoring specific customer care needs to locations that are best suited for these functions. It allows the investor to save on the cost of domestically sourcing the work, while at the same time removing the inflexibility of using only one offshore location. For example, many European outsourcers are now locating administrative-to-mid level customer care in offshore locations including India, Argentina and the Philippines (which may account for 60 to 70 percent of total call volume), while locating the high-end/value add work in nearshore locations such as the Czech Republic or Egypt.

Copyright Technology Marketing Corporation Oct 2006

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