Everest Group Eyes Contact Center Outsourcing Disruption



Traditional approaches and scope of services that have defined contact center outsourcing in the past are rapidly evolving into a new set of buyer expectations and service provider capabilities more appropriately considered customer experience services, according to new research from Everest Group.

As is the case with in-house contact center operations, change is being driven by digital-savvy customers who are now demanding service availability on their channels of choice and a fast and accurate resolution to their issues, according to the research. This is forcing companies to seek out service providers thatcan help them meet and exceed the expectations of these digital-native customers.

In addition, the research found that companies are becoming more customer-centric, with increasing focus on building a loyal customer base. As a result, they expect service providers to participate in tailoring innovative customer experience solutions.

And service providers find themselves under pressure to deliver tangible business outcomes for their clients, forcing them to make people and technology investments that will equip them to provide differentiated customer experiences, the research also found.

"We see traditional CCO approaches evolving quite rapidly into those focused on delivering customer experience services," said Katrina Menzigian, vice president at Everest Group. "This is apparent in the rise of consulting and co-innovation engagement models, the adoption of sophisticated digital services to enable omnichannel customer engagement, and pricing constructs based on tangible business outcomes."

Another insight from the study is that services, such as customer analytics, customer retention management, and performance management, which once were considered value-added services, were included in almost half of the CCO contracts in the past two years. In other words, buyers have come to expect them as core delivery capabilities because they are required to deliver exceptional customer experiences.

With buyers and service providers looking to redefine contact center relationships and focus on customer experience delivery, the CCO market witnessed a subdued growth rate of 3 percent in 2016 to reach nearly $80 billion, though the market is expected to resume growth at 4 percent to 5 percent by 2020. Contributing factors in the current growth rate declines include the following:

  • Rising technology adoption – Use of analytics and automation has reduced human effort, requiring fewer full-time employees for the same work;
  • Geopolitical factors – Buyer apprehension due to Brexit, US elections, etc. led to reduced buyer activity; and
  • Growth of non-voice interactions – Though larger in volume, non-voice interactions have lower costs.

Other key findings presented in the report, titled "Contact Center Outsourcing Annual Report 2017 – Disruption is Here: The End of Contact Centers as We Know Them," included the following:

  • The global contact center market stands at roughly $335 billion, of which third-party outsourcing accounts for approximately 25 percent;
  • Multiregion contract signings continue to increase as buyers consolidate their service provider portfolios across regions;
  • The delivery model is leaning towards balanced shoring, as providers balance onshore and offshore delivery;
  • Technology investments in predictive and prescriptive analytics have risen significantly in the last couple of years; and
  • Enabler technology comprised most of CCO-related investments, amounting to half of the total investments. Analytics, automation and multichannel tools formed the bulk of enabler technology investments.