Regular readers of my blog will be aware that I enjoy making predictions about the future of the call centre outsourcing industry and that I have an uncanny ability to get things right. I do not claim to be a fortune teller. These predictions are simply based on the many conversations I have. So, without further ado, here are my predictions for 2015.
From an overall perspective, we will see some quite interesting trends. We've seen considerable consolidation during 2014. Globally, Convergys bought Stream and Teleperformance bought part of Aegis. In the UK, Parseq bought 2Touch leaving the country with an ever dwindling number of independent vendors. Consolidation will be less in 2015 mainly due to the simple fact that there is less left to consolidate but we will see at least 1 mega global merger and at least 1 of the larger UK entities being bought by an American or Indian company.
Growth will be fairly flat in the industry as a whole but for the first time this century, we will see domestic growth in the call centre outsourcing sector outstrip its offshore counterpart. You might think it's quite brave to make this prediction but I'm pretty confident. Appetite for offshoring is on the decline. There are of course many who choose to expand offshore but the number of new companies offshoring for the first time has slowed down dramatically and 2015 will be a continuation of this trend. Among the offshore markets, India & South Africa will be the surprise winners at the expense of The Philippines and Eastern Europe partly due to changing costs. Costs and attrition are on the rise in The Philippines and Eastern Europe whereas costs are stagnating and even reducing in India and South Africa's tax incentives are making it a far more attractive option. The Philippines as a whole will grow its call centre marketplace but this will be due to clients from The United States & Australia as opposed to from The UK. Despite continued speculation, I see very little movement in the home-based agent marketplace. However, none of these specific locations will see double digit growth or contraction. The Indian market servicing The UK will grow less than 5% but the South African market will grow slightly faster. The Philippines may even see a decline of roughly 5% from UK revenues mainly due to a contraction in low-end offshore telemarketing.
Within specific companies, the mega-players might struggle in 2015 unless they can differentiate themselves from their competition. The smaller players might actually outgrow their larger counterparts during 2015 but there are a few individual companies with weak financials who might struggle to make it to 2016. Those companies with a more specific service offering will outperform the more generic players. Those who focus on high-end technical support and telemarketing services will do well during 2015 but the wider outsourcing vendors such as Capita, Serco and a number of the Indian-owned companies are likely to struggle.
There will be differing trends in different sectors. The mobile phone marketplace has changed beyond recognition with the networks now dominating and all of them have different strategies for customer management all of which seem fairly ingrained in their overall company strategy. The company to watch in 2015 will be EE if they are bought by BT. After the T-Mobile/Orange merger, the combined company went through a period of consolidation of vendors. It's likely that the BT/EE merger could mean even more consolidation. Financial services will be the major growth area in 2015 for domestic outsourcers and retail be the major growth area for offshore. The utility sector will outsource more customer service in 2015 but the telemarketing of utilities is starting to look very stale. At least one of the big 6 is likely to move customer services offshore but telemarketing offshore has simply failed to work from a compliance perspective and we will see much of that back in the UK within 2015. Many of the newer and smaller utility providers will grow throughout the year and will be larger users of domestic outsourcing services. We're unlikely to see any major changes in the government sector before the general election in May. Those who operate in the low-end sectors such as PPI reclaim will see a dramatic downturn during 2015 but most of this is currently done offshore.
In terms of specific service offerings, non-voice offerings such as chat, email and social media support will grow offshore. Technical support and high end customer services will grow domestically and low-end customer service will increasingly be phased out in favour of self-service. Telemarketing will be the key growth area domestically. Telemarketing is increasingly unproductive in an offshore environment and with the ever-rising issue of 'compliance', domestic telemarketing will grow in 2015. In business to business telemarketing, much of the information gathering/list cleansing work will remain offshore but higher value B2B calling will remain a strong area for domestic providers.
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