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North American Contact Center Outsourcing Vendor Guide

North American Contact Center Outsourcing Vendor Guide

North American Contact Center Outsourcing Vendor Guide

1/17/2006
By Donna Fluss
ICCM Weekly

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Contact center outsourcing will remain a priority for companies in 2006. What’s different is the role North American outsourcing vendors are going to play during the year. No longer willing to sit by and watch their customers migrate abroad, these vendors have become more price competitive and have introduced value-added offerings intended to retain existing customers and win back lost ones.

The North American Outsourcing Market is Highly Competitive

The North American outsourcing market is highly competitive, crowded and transitioning. The migration of contact center outsourcing activity abroad during the last few years sped up the maturation of this industry, bringing about mergers and some fire sales. An example is the $32 million sale of LiveBridge to ACS in July 2005. Currently, fewer than ten vendors dominate the North American contact center outsourcing market. These vendors are expected to expand over the next few years through the acquisition of other contact center outsourcers and other business specialty firms. There are still more than 80 North American contact center outsourcers that survived the downturn of the last few years.

Additionally, global outsourcing firms, particularly those based in India, are making inroads in the North American market by purchasing US and Canada- based companies in order to compete more effectively. The global expansion of foreign-owned outsourcing companies is a trend that will continue to be strong during 2006.

High-Level Contact Center Functional Summary

Seven of the leading US and Canada-based contact center outsourcing vendors, ACS, arvato services, Convergys, ICT, SITEL, West and TeleTech, are reviewed in Figure 1 below. On a high-level functional basis, it’s an even playing field among the top North America-based outsourcers. All of these vendors offer the same core services. Of course, there are differences in how they perform and charge for these services, which must be identified during the selection process. These vendors differentiate themselves in many ways, including vertical specialization, supplemental services provided, number and location of contact centers, geographies and languages supported, technology, size of initiatives supported, training, quality assurance, customer satisfaction and pricing. Additionally, these vendors increasingly offer business process optimization (BPO) services that extend beyond front and back office into human resources, finance and accounting. It’s a buyer’s market, with a lot of well-priced expertise available for hire.

Figure 1: Comparison of High-Level Contact Center Functionality

Functional Capabilities

ACS

arvato services

Convergys

ICT Group, Inc.

SITEL

TeleTech

West

Phone

 

 

 

 

 

 

 

  – Inbound

Yes

Yes

Yes

Yes

Yes

Yes

Yes

  – Outbound

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Email

 

 

 

 

 

 

 

   – Auto acknowledgements

Yes

Yes

Yes

Yes

Yes

Yes

Yes

  – Auto suggest

Yes

Yes

Yes

Yes

Yes

Yes

Yes

  – Fully automated responses

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Chat

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Web collaboration (e.g., form sharing)

Yes

Yes

Yes

Yes

Yes

Yes

Yes

IM

Yes

Yes

Yes

Yes

No

Yes

Yes

Fax

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Mail

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Fulfillment (specify if you handle letters and packages)

Letters. Do not provide fulfillment services for packages.

Yes – both

Yes – both

Yes, through strategic partnerships

No

Yes – both

Yes

Best Practices for Selecting a Contact Center Outsourcing Partner

Prospects looking for an outsourcing partner have hundreds of vendors and dozens of geographies and sites to choose from. The size and diversity of the market makes it challenging to choose an optimal vendor. There are many criteria that should be included in the selection process, including: financial strength, location of contact centers, willingness/ability of vendor to meet your volume requirements, political stability of the region, dependability of public infrastructure, availability of convenient transportation, type of contact center services provided, vertical domain expertise, languages supported, education level of staff, staff attrition levels, technology/systems provided, quality management program, training, non-contact center services and, of course, price. Price is important, but should not be your primary selection criterion.

The following best practices will help you find a great partner while streamlining and simplifying your selection process:

  1. Select the geographies that are appropriate matches for your customer base. Carefully consider the cultural needs of your customers.
  2. Be sure the selected location is politically stable and is situated in a place where your company is comfortable doing business.
  3. Identify local vendors and North American vendors that do business in the selected geographies.
  4. Make sure the selected vendors have expertise in the specific services that you require, such as direct response marketing, consumer affairs, collections, telemarketing, etc.
  5. Be certain that the vendor can easily scale to meet your needs, whether they are large or small. Many outsourcers do not want to work with customers that need fewer than 20 seats. Other outsourcers do not have the capacity to handle large volume accounts that require more than 300 seats.
  6. Make sure the selected vendors have vertical domain expertise for your industry. (Sure, it’s great if a vendor does “collections,” but with so many options to choose from today, why not select a vendor that specializes in your industry? It will save start-up time and effort.)
  7. Verify that the outsourcer is able to deliver the agent training you need and that its staff meets your company’s education criteria.
  8. Find a vendor that has the systems and infrastructure to seamlessly absorb your activities.
  9. Be certain that the vendor meets your service quality requirements and has a quality assurance program that allows you to monitor transactions at will.
  10. Make sure the vendor is willing to meet your reporting and service level requirements.
  11. Review each vendor’s problem escalation procedures to make sure that the outsourcer is flexible and willing to do business your way.
  12. Check at least four references for each vendor. Be careful that the references match your requirements and are not generic. It won’t help you if the vendor does a great job in telemarketing, if you want them to handle retail customer service.
  13. Find out if the outsourcer can meet your contact center and non-contact center requirements.
  14. Conduct site visits to meet the vendor’s management and make sure that they are set up to meet your needs.
  15. Determine current and projected pricing.

There are many best practices, but the fifteen above will allow you to pre-qualify a short list of vendors for serious consideration.

Final Thoughts

During the past three years, many enterprises have bypassed North American outsourcers because their prices were too high or they were less flexible than their offshore peers. North American outsourcers have been forced to be more realistic and now offer commoditized pricing, similar to vendors around the world. These vendors are now price competitive and recognize that their continued success depends on vertical expertise, value-added services and a close working relationship with their clients.

If you’re considering an investment in contact center outsourcing, we suggest you take a look at our new Report on the North American contact center outsourcers and market. The 2006 North American Contact Center Outsourcing Market Report, is available at www.dmgconsult.com, or by calling Debbie Navarra at 516-628-1098.

Donna Fluss is the Principal of DMG Consulting LLC, delivering customer-focused business strategy, operations and technology for Global 2000 and emerging companies. Ms. Fluss, a recognized leader and contact center visionary, is a highly sought-after writer and speaker. She is the author of The Real-Time Contact Center. Contact Ms. Fluss at donna.fluss@dmgconsult.com.

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