Asian contact centers face competition

According to the latest figures by Frost and Sullivan, the Asia Pacific region continues to be the most popular destination for contact-center outsourcing. The report "Assessment of the Asia Pacific Contact Center Market" by Frost and Sullivan mentions that the number of contact centers in the Asia-Pacific region in 2004 was in excess of 21, 360. It is expected to grow to 39, 247 by the end of the year 2011.

The strengthening of outsourcing is being driven by India and the emergent trend of near-shoring in which companies in Japan and South Korea are transferring their contact center operations to China. Malaysia manages contact center operations of Singapore-based companies whereas India and the Philippines are getting work from Australia. 70% of the total contact center work in the Asia-Pacific region originates in the United States.

Even though the business case for offshoring business processes to the Asia-Pacific region is strong, the process is not quite simple, for example, Dell reduced the scale of its operations in India as agents with neutral accents were hard to come by. Several contact centers are hiring British, Australian, and US citizens to try and solve accent-related issues. Another problem for contact centers is the high attrition rate. According to Frost and Sullivan, the average attrition rate is around 19.8% and is higher in India and the Philippines.

The Asia-Pacific region remains the preferred location for offshoring as it offers quality services at low cost; however, on the lines of the Japan-China near-shoring trend, several European countries are outsourcing to places that offer a certain comfort level. Germany is outsourcing its contact center operations to Romania and Poland as the people there are conversant with the German language and the countries are nearer to visit in case of eventualities. Similarly, North Africa is attracting contact center work from France.

Latin American and Caribbean nations are expected to experience growth of the contact center industry, partly because of the requirements of the Spanish speaking market and also as the operating costs are lower than in the Asia-Pacific region. According to a study by Zagada Markets, 50, 000 jobs will be created in the Caribbean this year.