Geopolitical uncertainty and technology: Global game changers for the contact center industry
By Tadd Wisinski, Managing Director and Contact Center practice group co-lead, JLL
Contact centers are an essential focus of any successful organization’s sales, service and support operations. Beyond product and service delivery, consumers demand straightforward, swift and stress-free brand experiences, and contact centers are charged with this delivery. The 2017 JLL Contact Center Outlook report sheds light on how the massive industry shift toward digital channels, coupled with today’s geopolitical uncertainty, disrupts the sector on a global scale.
The contact center industry grew steadily across the globe in 2016. The U.S. contact center industry maintained the largest share of the global market, with 1.5 percent annual growth in contact center spending. This growth can be attributed to third-party providers diversifying their services to meet client demands for exceptional customer service and streamlined business operations.
While nearly three quarters of contact center operations are internal to large corporate users, the remainder of the market comprises third-party providers. For the foreseeable future, providers are expected to see a strong increase in revenues as corporations turn to outsourcing basic business and analytics functionalities.
Massive industry shift toward digital channels will transform labor, technology and infrastructure
As consumer and client preferences evolve, traditional contact centers are forced to adapt. End users are often on the move, seeking quick fixes without needing to speak with a live operator. As a result, they utilize their smartphones to communicate via social media or other electronic means. For example, many providers have expanded non-voice offerings to now include Twitter, SMS texting, and other unique channels.
On the other hand, consumers may also require more complex conversations for technical issues, giving rise to screen sharing or live chat channels, which allow for more in-depth assistance. Savvy contact center operators will need to leverage these digital mediums to remain competitive in a market shifting toward all things digital.
Jury’s still out on the impact of automation
Evolving consumer behaviors also led contact center users and buyers to invest in automation. One common automation solution is the interactive voice response (IVR) system. Consumers answer “yes” or “no” to a range of questions in lieu of speaking with a live consultant. While automation is efficient for the most rudimentary of customer service tasks, specialized cases still require human interaction.
Automation can also be cost-prohibitive as they require ongoing system adjustments, data analytics and professional maintenance. Live reps who address unique consumer demands will remain prevalent in contact centers for the foreseeable future. In fact, despite revenue growth due to automation, contact center employment grew to 2.6 million employees across the United States in 2015, up from 1.9 million employees in 2010.
Geopolitical uncertainty breeds opportunity for reshoring to North America
The geopolitical climate is changing in several key contact center markets, including the Philippines, United States and India. Currently, the Philippines is transitioning to a K-12 school program, which may temporarily depress availability of CSR talent. Many contact center outsourcing (CCO) firms are reexamining their portfolios in the country and will continue to monitor the country’s actions.
Moreover, the Trump Administration may operate with an anti-outsourcing agenda, given his campaign platform to bring jobs back to the country. At the same time, policymakers have proposed legislation to combat outsourcing in the CCO industry. The next four years may produce regulatory obstacles for CCO companies who rely on access to low-cost, high-margin labor on a global basis.
Steady growth and onshore-offshore competition
The battle between onshore and offshore markets continues, with different regions offering distinct benefits and drawbacks. The U.S. tends to produce higher-quality services and contact interactions than offshore because of English-language proficiency in the country, although real estate prices and labor wages across the country lead to higher price tags for operators.
The contact center industry is expected to steadily grow for the next five years accompanied by evolving multichannel services and a digital shift in end-user preferences. From a broader perspective, the increased demand for automation and new technologies is expected to hinder contact center growth in offshore markets. The overhead needed to implement and maintain new technologies distinctly goes against the low-cost advantages the offshore markets offer. Additionally, this demand and increasingly complex conversations with the end user give onshore contact centers the upper hand moving forward.
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