A report issued by the market analyst Datamonitor reveals that nearshore call center destinations as opposed to offshore, are now the new darlings amongst customer care outsourcers from Western Europe.
According to the report, Profiting from European Nearshore Outsourcing, outsourced call center agent positions (APs)in the European nearshore regions of Central & Eastern Europe and North Africa are set to rise to 13,700 by 2008. In 2003 their number was 4,400. The most popular targets will be Poland, Hungary, the Baltics, North Africa and the Czech Republic.
Whilst the main threat to nearshore growth could come from inexpensive offshore alternatives in developing countries in both Central & Southern Africa and Asia (including India and the Philippines), the European nearshores qualities, for example an educated labor pool (which is increasingly multilingual) and its economic stability, are proving very attractive to Western firms. Given the regions business-friendly attitude and relatively stable currencies, more customer care is set to be handled both east and south of Western Europe, says Datamonitor .
This firm also found that the Czech Republic, Poland, and Hungary will be the destinations of choice for higher-end care for German and English-speaking customers, while Romania and Bulgaria will focus on routine customer care queries. Romania will concentrate on Italian and French clients, while Bulgaria will focus on customers from the UK and Germany.
Datamonitor says the Report identified an excellent opportunity for Croatia and Slovenia to win business in Italian and German-speaking customer care. The Company also forecasts that the Baltics (Estonia, Latvia and Lithuania) will remain the outsourcing location of choice for firms servicing Scandinavian customers and that the Morocco and Tunisia will remain focused on French customer care.
EU-based firms are impressed with Central & Eastern Europes and North Africas educated labour pool that is growing in its multilingual capability, said Peter Ryan, Datamonitor call center analyst and author of the study. An available workforce that is located relatively close to major EU centers, combined with modern telephony infrastructures work in favour of nearshore call center outsourcing. However, the increase of English and French-speaking customer care in Central & Eastern European contact center markets could be a challenge for North African customer care outsourcers and may lead to regional competition for clients .
According to Datamonitor, the main threat will be the loss of competitive advantage due to inflation. Many multinational firms will choose Europes nearshore to set up their own customer care facilities, given its cost-effectiveness and accessibility. The challenge for outsourcers will be to convince such firms that it is in their interest to lower their overhead costs and take advantage of professional agents by tendering out their customer care needs to Central & Eastern Europe and North Africa.
Another competitive threat facing European nearshore outsourcers is overcoming an unfavourable commercial impression. Nearly every country in the European nearshore has raised its customer care standard over the past decade, and invested heavily in technology infrastructure. Western European outsourcing firms need to not only emphasize the case for their agents language abilities, but also the regions focus on economic & political stability, ease of access, and affinity with Western Europes commercial culture.
The European nearshore has a lot to offer firms looking for a viable, multilingual environment in which to house customer care operations. To succeed it will be key for Western European outsourcers to locate in the region most appropriate for their operations, and to establish partner networks, specialising in areas of expertise best served from Central & Eastern Europe and North Africa. This will lead to lower operating costs, and increased customer satisfaction, concludes Ryan.
Source: DataMonitor
2004-08-09
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