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January 27, 2015
Global Trends in the Contact Center Market
and Opportunities for the Philippines
Proprietary & Confidential. © 2015, Everest Global, Inc. 2
Global contact center market – key highlights
Global spend on c...
Proprietary & Confidential. © 2015, Everest Global, Inc. 3
There are four disruptive forces that will shape the
contact ce...
Proprietary & Confidential. © 2015, Everest Global, Inc. 4
Enabler technology is increasingly becoming a
strategic imperat...
Proprietary & Confidential. © 2015, Everest Global, Inc. 5
Shift in channel mix towards non-voice
channels is likely to in...
Proprietary & Confidential. © 2015, Everest Global, Inc. 6
Buyers will increasingly seek value-driven
solutions from their...
Proprietary & Confidential. © 2015, Everest Global, Inc. 7
Contact Center-as-a-Service (CCaaS) will challenge
traditional ...
Proprietary & Confidential. © 2015, Everest Global, Inc. 8
Philippines continues to maintain its leadership
position for E...
Proprietary & Confidential. © 2015, Everest Global, Inc. 9
The global locations landscape continues to evolve rapidly
with...
Proprietary & Confidential. © 2015, Everest Global, Inc. 10
Push towards a balanced onshore-offshore delivery model
likely...
Proprietary & Confidential. © 2015, Everest Global, Inc. 11
While the opportunities are significant, Philippines needs
to ...
Proprietary & Confidential. © 2015, Everest Global, Inc. 12
Issues to consider for the Philippines contact
center industry...
Dallas (Headquarters)
info@everestgrp.com
+1-214-451-3000
New York
info@everestgrp.com
+1-646-805-4000
Toronto
canada@ever...
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Global Trends in the Contact Center Market and Opportunities for the Philippines

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Global Trends in the Contact Center Market and Opportunities for the Philippines

  1. 1. January 27, 2015 Global Trends in the Contact Center Market and Opportunities for the Philippines
  2. 2. Proprietary & Confidential. © 2015, Everest Global, Inc. 2 Global contact center market – key highlights Global spend on contact center services is US$300-350 billion 20% of the global spend on contact center is currently outsourced; Global CCO market is US$75-80 billion Global CCO market expected to grow at 6-8% in the next 3-5 years; offshore CCO market expected to grow faster (10-12%) Philippines is the leader in the offshore/nearshore English CCO market with ~36% market share
  3. 3. Proprietary & Confidential. © 2015, Everest Global, Inc. 3 There are four disruptive forces that will shape the contact center market over the next few years X X X X 1. CCO enabler technology 4. Contact center- as-a-service 2. Multi-channel solutions 3. Changing CCO solution characteristics
  4. 4. Proprietary & Confidential. © 2015, Everest Global, Inc. 4 Enabler technology is increasingly becoming a strategic imperative for CCO 40 CRM technology Communication technology Enabler technology 62 25% 11% 40% 21% 35% 68% Up to 2010 2011-2013 CCO technology investment by category Share of investments by service providers Sample: Based on 102 technology investments made by 24 service providers Source: Everest Group (2015) Key areas of investments in enabler technologies Analytics Social media Workflow management 1 100% =
  5. 5. Proprietary & Confidential. © 2015, Everest Global, Inc. 5 Shift in channel mix towards non-voice channels is likely to intensify 89% 84% 7% 9% 3% 4% 1% 3% 2011 2013 CCO revenue across channels over time 2011-2013; US$ billion 14-15100% = 16-17 Voice E-mail Chat Social media 4-6% 25-30% 35-40% 80-90% Growth rate Source: Everest Group (2015) Non-voice Single channel Two channels More than two channels Adoption of multi-channel CCO contracts Number of contracts 409 626100% = 48% 36% 34% 37% 18% 27% Till 2011 2013 2
  6. 6. Proprietary & Confidential. © 2015, Everest Global, Inc. 6 Buyers will increasingly seek value-driven solutions from their CCO providers Traditional Value proposition Emerging Labor arbitrage 50-60% 30-40% Process improvement 5-10% 15-20% Business outcome <5% 15-20% Cost savings through CCO Changing solution characteristics  Focus on quality rather than cost containment  Adoption of a balanced onshore- nearshore-offshore model Delivery model  Focus on multi-channel solutions  Shift from CRM to communication and enabler technologies Channel mix  Focus on advanced learning techniques (e.g., scenario based) Technology Agent training  Deal scope expanding to include value- add processes  Growing focus on industry-specific capabilities Value add  Non-linear, mutually beneficial pricing structures Industry specificity Pricing models Source: Everest Group (2015) 3
  7. 7. Proprietary & Confidential. © 2015, Everest Global, Inc. 7 Contact Center-as-a-Service (CCaaS) will challenge traditional CCO value levers, requiring CCO providers to rethink their differentiators Source: Everest Group (2015) Key benefits of CCaaS  Cost effective and lower capital expenses  Rapid deployment and easy integration  Scalable solutions  Personalized and localized customer services Cloud-hosted contact center solution Implications for CCO industry Tech strategy must evolve Need clear BPO value prop Sustaining price points Core technology now available at lower costs. CCO providers must hone in on tech capabilities that create new value Clients may migrate towards a technology-driven solution if they do not see a clear value proposition from CC BPO model CCaaS will put further pressure on margins. CCO providers must evolve their offerings to target not only savings but business outcomes as well 4 Contact Center-as-a-Service Automatic Call Distribution (ACD) Interactive voice response (IVR) Real-time analytics Quality management Reporting Unified communications CRM integration Multi-channel solutions
  8. 8. Proprietary & Confidential. © 2015, Everest Global, Inc. 8 Philippines continues to maintain its leadership position for English contact center work Low High Low Operatingcost HighAvailability of talent Note: Everest Group's Maturity, Arbitrage, Potential Matrix. Based on fully-loaded, ongoing operating cost, talent pool, and risk assessment Note: Based on representative cities in a country; there could be other cities in the country that also offer comparable propositions Source: Everest Group (2015) Everest Group MAP Matrix™ for English contact center 2014 Favorable, but some concerns Significant challenge Highly favorable Risk profile LeadersAspirants Major Contenders India tier-1 Philippines tier-1 Philippines tier-2 India tier-2 CairoGuatemala City Cape Town Buenos Aires Monterrey San Jose Panama City Santiago Glasgow Belfast Dublin Montevideo Bogota San Salvador Montego Bay
  9. 9. Proprietary & Confidential. © 2015, Everest Global, Inc. 9 The global locations landscape continues to evolve rapidly with more “viable” alternatives to mature locations Source: Everest Group (2015) Philippines India China Malaysia South Africa Argentina Chile Mexico Costa Rica El Salvador Morocco Egypt Bulgaria Romania Poland Czech Republic Hungary Sri Lanka Slovakia Colombia Guatemala Honduras Nicaragua Emerging locations Mature locations Nascent locations Uruguay Mauritius Brazil
  10. 10. Proprietary & Confidential. © 2015, Everest Global, Inc. 10 Push towards a balanced onshore-offshore delivery model likely to pose some challenges to CCO offshore locations Distribution of CCO contracts with offshore/nearshore components Number of contracts Predominantly offshore delivery2 Significant onshore delivery1 100% = 409 406 1 Contracts with more than 25% of FTEs located in onshore locations 2 Contracts with more than 75% of FTEs located in offshore/nearshore locations Sample size: 1,035 CCO contracts signed between January 2008 and December 2013 Source: Everest Group (2014) Onshore leverage in CCO Percentage of onshore FTEs 16% 29% 37% 2008-2010 2011-2012 2013 220 65% 51% 42% 35% 49% 58% 2008-2010 2011-12 2013
  11. 11. Proprietary & Confidential. © 2015, Everest Global, Inc. 11 While the opportunities are significant, Philippines needs to address some challenges to ensure sustained growth Philippines contact center industry Leverage points for the Philippines Potential risks to manage  Global hub for English language contact center and strong leadership position  Niche play beyond voice in voice-adjacent segments  Access to multi-lingual skills in the region and competitive cost position  Strong foundation in multi- channel delivery  Potential in tier-2/3 cities  Push towards balanced onshore-offshore delivery  Evolving buyer needs in terms of automation  Currency attractiveness vs. other countries  Attrition and wage inflation  Geographical concentration risk and its impact on business continuity
  12. 12. Proprietary & Confidential. © 2015, Everest Global, Inc. 12 Issues to consider for the Philippines contact center industry Talent development  Balance need for generic skills (e.g., communication) versus specialized skills (e.g., care management, social media) to meet demand from existing and emerging segments  Invest in career-pathing, alternate talent, and retention to increase talent availability Moving up the value-chain  Articulate "moving up the value-chain" in context of Philippines and reorient value positioning for new offerings (e.g., multi-channel, analytics)  Balance objectives of growth driven by scale and higher value Ecosystem development  Accelerate development of tier-2 locations; closely monitor potential saturation challenges in tier-2 locations  Sustain industry initiatives to control costs and substantiate value beyond arbitrage
  13. 13. Dallas (Headquarters) info@everestgrp.com +1-214-451-3000 New York info@everestgrp.com +1-646-805-4000 Toronto canada@everestgrp.com +1-647-557-3475 London unitedkingdom@everestgrp.com +44-207-129-1318 Delhi india@everestgrp.com +91-124-284-1000 Blog www.sherpasinblueshirts.com Twitter @EverestGroup @Everest_Cloud Stay connected Websites www.everestgrp.com research.everestgrp.com

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