BPO: A continued trend to reshore call centres
The announcement that Vodafone will relocate 2,100 call centre jobs to the UK is evidence of the increasing trend of reshoring client support and customer service functions. The move follows that of BT and EE who have also committed to returning captive call centres back to the UK.
The news comes at a time when wage inflation is reducing the value of labour arbitrage, and customers are increasingly frustrated with the poor quality of customer services in offshore destinations.
This, in turn, is driving high levels of M&A activity for outsourced customer service providers who are responding to clients demand to develop nearshore operations. One of the best precedents is Convergys’ acquisition of US-based Stream. Stream was considered a particularly attractive target due to its nearshore presence which helped Convergys to develop a truly global delivery model. Other examples include that of Convergys’ acquisition of Germany-based buw, Alorica’s purchase of Texas-based Expert Global Solutions and Synnex’s acquisition of Canada-based Minacs.
The ability to handle increasingly complex tasks that often require language and communication skills, coupled with sector knowledge is a further factor behind such M&A moves. By targeting specific verticals, BPO providers are able to demonstrate deep sector knowledge but also better align themselves with their client’s brand and values. This has been proven to result in better end-user engagement with issues being resolved more quickly.
Demand for high levels of customer support is also driving technological advancements. Corporates and outsourced service providers are increasingly moving towards multi-channel strategies that include social media platforms and live chat, as mobile continues to drive customer needs for an integrated digital experience. These non-voice channels help to reduce costs, which in turn, offsets the increased costs associated with onshore operations.
Here at Clearwater International we believe that BPO providers will continue to acquire onshore services to access language capabilities, technology, specific verticals and targeted countries.