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Nearshore Ready for Customer-Driven Centers

Customer-Driven Centers of Excellence

Nearshore Americas recently interviewed Michael DeSalles, a Frost and Sullivan Principal Analyst to discuss the state of the business in Customer Contact in BPO using his industry insight. Below is a summarization of that interview:

2013 has seen rapid evolution in the customer contact space, especially with the evolution of call centers into omnichannel customer experience experts. This progress is expected to continue with 2014 projected to be an “evolve or extinct” year for many still working within the traditional dial-for-support paradigm.

In the USA, legislators continue to try to use outsourcing as a boogie-man, with protectionist initiatives such as the recently introduced “Dial-One for America” legislation.

Nearshore Americas: You recently returned from Panama. While we see lots of contact center traffic from Colombia and Costa Rica, why is it that we hear less on Panama? Why does it appear to lag behind its neighbors in BPO and contact centers?

DeSalles: [The call centers] were modern, clean, secure, and well-managed. When I plugged into calls (in English and Spanish), I could sense the passion for customer care work among the agents. Our research shows that Panama has been a great nearshore market that has attracted a lot of business over the years, but the reason we hear less about it is because it represents a mature market for U.S. volumes. Because it is mature, Panama also comes with relatively higher costs. Providers and clients tell me that Panama has great agent talent, loyal employees, excellent English and good infrastructure. However, when companies are looking at markets in Latin America, they seek out lower cost locations. For some, Panama doesn’t fall into that category. You have to pay more for higher quality interactions.

[Costa Rica is] a terrific nearshore option with what some might argue, is the highest education level in Central America. There’s a high degree of expertise in customer service, collections, sales, and technical support. Combine that with very low attrition and lots of growth potential in retail gaming, telecom, financial services, and healthcare, and you have a winning combination.

Make no mistake; Panama certainly does not lag its neighbors in BPO. As you know very well, in a nearshore destination, government support is critical to the mix along with excellent English language skills. The key challenge is being able to leverage high-quality educational institutions as part of a “feeder” ecosystem from which to hire a skilled labor force.

I am constantly surprised that there is not as much discussion about Mexico, where I heard outstanding English while listening to a customer book an extensive travel itinerary. I was in Mexico last year for a week. I felt very safe.

NSAM: Do you believe that the recently introduced “Press 1 for America” legislation has any chance at all of passing? How dangerous is that?

DeSalles: It’s too early to tell if this bipartisan bill will pass. It’s important to note that it would not stop brands or BPOs from moving contact center jobs to Latin America, but rather would place restrictions on federal grants and loans. It’s also worth noting that the current version of the proposed Trans-Pacific Partnership trade agreement would provide the opportunity for other nations to challenge or effectively veto the law, if it passes.

NSAM: How are Latin American call center operators handling the evolution from “Call Center” to “Contact Center,” ­integrating multichannel customer contact strategies such as social media, e-mail support, chat, and video?

DeSalles: Multi-channel skills sets (chat, email, and social media) are becoming increasingly important in key sectors like telecom, BFSI (Banking, Finance, Securities & Insurance), healthcare and consumer goods across Latin America. Social media and other non-voice channels are new and rapidly evolving modes of customer care in every geography, not just Latin America.

Historically, the operating model in the BPO space goes something like this:

  1. Divide the communication channels across locations for cost and competency advantages.
  2. Put voice work in the nearshore markets where prices are higher but the English competency and customer experience is stronger.
  3. Place chat, email (i.e., “accent-neutral” work) in lower cost markets like India.

So it follows that Latin America has been voice-centric not because of lack of competency issues on these types of mediums, but because of the economics. Latin American locations are higher priced than the Philippines and India. What they do provide is very good English competency and a high degree of familiarity with American culture. In our studies, we are writing extensively about multichannel and how customer care is moving to an omni-channel environment.

Clearly, contact centers are becoming multichannel service hubs. We believe that the trend will be to centralize multichannel operations in one location to further simplify operations and minimize costs. I predict these will no longer be “call centers” by name, but rather will be transformed into “Centers of Excellence” in the next two years—and video and web collaboration will play a much larger role. Since the year 2000, more than 65,000 offshore BPO jobs have been added in the Latin American region. Given the influx of new business, Central American countries have increased infrastructure capabilities. BPO operators are quickly training the workforce to manage a high-level, multichannel consumer interaction.

NSAM: Domestically, many contact centers are employing at-home agents. Has this trend caught on yet in Latin America? If so, who are the leaders and effective implementers of this “telecommute” strategy? If not, what are the barriers standing in the way of increased implementation of the work-at-home agent?

DeSalles: I think BPO companies want to trial work-at-home and that clients would like the choice. Unfortunately, this trend has not caught on in Latin America for two basic reasons:

This is fundamentally an infrastructure problem. The barriers remain technology-related challenges like bandwidth and reliable electricity: Infrastructure (DSL/Cable/HS Internet) in the home and network reliability is just not ubiquitous.

I am told that often homes do not have that spare bedroom or quiet workspace that is essential to operating in a home agent environment.

Providers have confided in me that they are exploring the possibility of scaling the work-at-home solutions program in Latin America, but it’s not a primary strategy at this time. I also suspect there are some client concerns in reference to compliance, data security and infrastructure (BFSI and healthcare, in particular) across the CALA region.


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