Quality concerns cause rethink of contact center offshoring

Companies are opting for higher-cost local services over low-cost offshore contact centers because of concerns over the quality of interaction between contact center agents and end-users, notes new report.

A survey conducted by Ovum found that only 2 percent of businesses would look to offshore their contact centers in the next 12 to 24 months, while only 10 percent said they would do the same within 25 to 26 months. In contrast, "a massive 80 percent" of respondents said they had no plans to offshore their contact centers, said Ovum in a report released Monday. The study polled senior executives in leading businesses located in North America, Europe and Australia.

Despite the low delivery cost promised by offshore contact centers in regions such as India and South America, where labor and premises cost were comparatively lower, enterprises that had yet to set up offshore contact centers did not feel that the cost savings could compensate for the risk of losing customers, the research firm said.

According to Peter Ryan, Ovum lead analyst, four key issues made it riskier for enterprises to offshore their customer service centers. He pointed to the quality of interaction with end-users, stability of the offshore destination, pressure from consumers to keep work in the domestic country, as well as fears over the safety of their data. Enterprises were concerned about these areas when considering whether to offshore their customer service centers, Ryan said.

"The issue over the quality of the interaction with customer service agents and end users is a key one," the Ovum analyst said. "Customers can quickly become frustrated if they feel their inquiry is not being dealt with quickly and effectively and take their business elsewhere. In this tough economic climate, enterprises are less willing to send their contact centers to low-lost offshore locations because they feel there is greater risk that quality will become an issue."

Ryan added that the economic crisis also pushed down labor and premises costs as well as reduced agent churn in the domestic markets of Australia, the United Kingdom and the United States, which in turn led to some businesses moving their contact centers back onshore.

However, he questioned how long such a scenario could be sustained and whether decisions to onshore would be relooked when the job market and economy recovered.