Office Gurus (White Paper) - Nearshore and Domestic Locations Spearhead Increased Call Center Outsourcing

Research by ContactBabel, Forrester Research, and Datamonitor finds continued growth in contact center outsourcing in the United States and Europe.

By Bruce McCracken, Business Writer

A key trend is the growing preference by buyers of domestic or nearshore locations for greater ease in managing the engagement and reducing the risk of alienating important customers due to accent and cultural issues. More companies are increasingly reluctant to consider offshore locations.

Nearshore increasingly attractive for call center outsourcing

The problems of distance and time zones have become apparent in managing the engagement. Nearshore and domestic engagements alleviate these issues considerably. Nearshore locales can also provide a greater cultural affinity and reduce accent issues. Locations in compatible time zones are emerging that offer reduced labor costs compared to traditional offshore locations.

Peter Ryan, lead analyst --contact center outsourcing and BPO for Datamonitor, sees nearshore on the rise. "There are definite trends toward more nearshoring. This is due to a number of issues, including the need to be physically closer to the contact center facility, cultural familiarity, and time zone issues." Language capabilities, price points, and stability were the areas contact center managers cited "most frequently. The interesting thing was that between 2007 and 2008, price increased in importance."

Offshore not as popular a choice

The difficulty in managing an engagement at call centers half a world away combined with changes in currency valuations and customer discontent reduce the appeal of offshore customer care.

Datamonitor noted that respondents had limited plans to move any of their contact center delivery to a foreign location. "Accent has been a sticking point for some locations," observes Ryan. "For the most part it has been eliminated as offshore suppliers have tried to train agents accordingly. However, the bad taste has lingered in the mouths of many. There has been some concern in the general public and among enterprises about quality and security of offshore operations."

"Consumer products are where customers complain about the language difficulty. You are getting a backlash," submits Herrell. "If you are having a clash where the agents have no understanding of the U.S. culture and no background and training, then it is more difficult to retain customer loyalty."

The ContactBabel U.S. report indicates that less than 20 percent of the respondents welcome offshore as an option. "Offshoring is much more an issue of cost than is outsourcing in general," explains Morrell. "It is more likely to appeal to organizations spending tens of millions of dollars each year on their customer contact operations."

"You need to look at the culture of the country and what the best fit is," advises Herrell. "It is not just the cost of the agent. Will the culture of that country be compatible with your customer base? If you blend those two successfully, then location is more neutral. It can be successful when all of the right factors are considered."