The Everest Group has released new findings about Contact Center Outsourcing (CCO) in its new report, Contact Center Outsourcing – Annual Report 2014: Changing Times, Evolving Value Proposition. Known as an advisor to business leaders on the next generation of global services with a worldwide reputation for helping Global 1000 firms improve performance by optimizing back- and middle-office business services, the Everest group’s report has seen the value of CCO increasing beyond just a cost reduction center for operations.
CCO is now seen as an avenue for process improvement and business outcomes that generate revenue growth, not just helping buyers save on costs – clearly seen as the CCO average Annualized Contract Value (ACV) doubled in one year.
Here are some trends featured in the report that clearly show the evolution of growth of CCO services:
- CCO ACV doubled in one year, from 14 million USD in 2012 to 29 million in 2013, due to increased inclusion of value-added services and multi-channel delivery.
- From 2010-2013, CCO has seen significant investments in enabler technologies such as analytics, social media and workflow management. Approximately 70% are all technology-related investments.
- As CCO evolves, buyers require more labor arbitrage, resulting in changing solution characteristics. Labor arbitrage dropped from 25-30% from 50-60%, with delivery models focusing on quality rather than cost containment. This has led to the adaptation of a balanced delivery model – onshore, near shore and offshore.
- Process improvements went up to 15-20% from 5-10%, seeing an increase in these characteristics: channel mix, technology and agent training.
1. There is movement from solely voice channels to multi-channel contact center solutions.
2. Technology has shifted from CRM technology to communication and enabler technologies.
3. Agents now receive advanced training techniques such as scenario-based learning to help improve their effectiveness and lead to increased service quality.
- Business outcomes nearly tripled in the emerging CCO outcomes, with 15-20% focusing on providing value-added services, industry specific solutions and better pricing models.
1. CCO now expands beyond operational processes to include value-added solutions.
2. CCO operations now focus more on industry-specific requirements and capabilities in order to maximize business value
3. CCO centers build non-linear, mutually beneficial pricing structures that reward service delivery matching client expectations.
- Non-voice channel growth has led to increased adoption of multi-channel contact center solutions.
CCO contracts that have adopted multi-channel solutions have increased to 27% from 2011 to 2013 from 18% from 2008 to 2008. These contracts offer more than three channels for service delivery. Sole voice channels dropped from 48% to 36%.
- Value-added services in CCO are gaining quickly, with customer analytics and customer retention having maximum growth. Value-added services have doubled in 2013 at 81% from 2008 at 48%.
- Clients now focus on improving customer experience so service providers are investing in onshore capabilities. This is why 60% of contracts signed in 2013 have significant onshore delivery components.
Katrina Menzigian, Vice President of Research Relations at Everest Group, has this to say about the report:
“As the CCO market matures, enterprise buyers are seeking ever more value from their outsourcing contracts. We see this borne out on the buy side by a rationalization and consolidation of service provider relationships. But, more importantly, on the service provider side this maturation drives a significant evolution toward more sophisticated, value-added services. Interestingly, we witnessed a doubling of annual contract value in 2013, which can be attributed in large part to the increased inclusion of value-added services in new CCO deals.”