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A couple of years ago, Sitel produced a white paper considering the future of call center outsourcing, which was then similar to now a topic of considerable interest.

Call center outsourcing has become a significant source of competitive advantage for many businesses, as well as a source of friction for some customers. Getting it right is a must.

The numbers vary in terms of how many companies are using call center outsourcing, but one thing that doesn’t vary is that more and more companies are doing it. This is because the advantages, as outlined even back in 2008, haven’t changed.

Of course, speaking realistically, price is the overriding advantage. If there were no price advantage to call center outsourcing it wouldn’t happen. Call center costs can be broken into three separate categories, and call center outsourcing has a noticeable advantage in each.

First, are agent-related costs. Across developed economies, the highest input cost in outsourced contact center operations are the wages and benefits provided to agents, which account for roughly 2/3 of total overhead. However, Datamonitor estimates that in offshore and

nearshore delivery locations, these agent costs alone are approximately 33 percent lower than in onshore markets.

Second, are property costs. Commercial property needed to house contact centers can be expensive in western delivery centers. However, outsourcers have been able to reduce this expense by taking advantage of what are generally lower property price points in offshore and nearshore locations, thereby providing increased value for their clients.

Third, is government support which is a frequently underestimated advantage, but it can be huge. Outsourcers are further able to cut costs for clients by targeting delivery locations with significant government investment incentives (usually in the form of subsidies and tax-breaks). Generally speaking, government officials in offshore or nearshore locations have been more enthusiastic to provide these incentives, as opposed to those in developed western markets.

Add those elements together, factor in the increased scalability one also finds with call center outsourcing, and you can see why it’s so prevalent.

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