The Market

The economy is still tight, and many enterprises have looked at their outsourcing budgets as they try to cut costs and improve quality. Peter Ryan, Ovum’s principal analyst covering front-office business process outsourcing, has noticed a trend among enterprises “to have work done based on performance, when traditionally it’s been done on a per-agent, per-hour basis.” 

Outsourcing customers are also looking for more technically sophisticated operations. Many outsourcers now collect information about their customers, analyze it, and “feed it back to the customer so the enterprise knows the individual consumer,” Ryan says. With technology budgets so tight, many prefer outsourcers to purchase the software and do the analysis themselves.

Growing outsourcers have a few choices when it comes to expansion and diversification, depending on which strategy they pursue. Ryan notes that many U.S. corporations prefer near-shore operations, such as the Caribbean, because they are easier to access than operations halfway around the world in India. Some organizations are focused on building out work-at-home agent operations. He also cites creative servicing of markets, such as having an economically developing country service the market of a growing one, providing they have language overlap.

The Leaders

Convergys recently acquired Stream Global Services, “which will strengthen its high-tech industry sector presence and provide it [with] a much stronger delivery capability to support multinational clients,” explains Vicki Jenkins, a customer management services outsourcing analyst at NelsonHall. The acquisition might help the outsourcer diversify and expand its client base. “[Convergys has] been perceived as a company that does work for telecommunications companies out of the U.S. The acquisition will only increase Convergys’ ability to challenge this sector’s competitive set. It also needs to leverage Stream’s presence in Europe…to penetrate that region,” Ryan says. Convergys “maintains a large internal research organization doing very innovative work on customer experience and loyalty and the service factors that drive these,” explains John Ragsdale, vice president of technology research for the Technology Services Industry Association. 

“Sitel has really moved forward over the past couple years,” Ryan says, earning it a 4.0 in company direction. Jenkins calls out its “leading position in social media services” and its work “developing strong positions in work-at-home agents and paid-for technical support services.” The company rolled out the Sitel Intelligent Desktop in 2013, which gives agents access across multiple channels. Sitel also developed an upgraded knowledge search more in line with a generation used to Google--style search.

West earned 4.2s in cost and depth of service, and a solid 4.0 in reputation for customer satisfaction. Its lowest score was in company direction, where it earned a 3.9. “One of the steadiest players in the outsourced contact center space,” according to Ryan, West enjoys consistent revenues and profitability. It has “a good number of legacy clients, and [has] successfully carved out a good niche in the provision of home-based agents,” he says.

The Winner

For the second year in a row, Teleperformance leads the outsourcing category. “It is the first pure-play contact center outsourcer to exceed the $3 billion mark,” Ryan notes. The strong financials are backed up by an innovative expansion strategy. “They’re implanted in countries all over the world; they are usually first movers,” he says. “They research exceedingly well. When they make an investment, they don’t do so unless it’s going to pay off.” He also admires the company for its ability “to adapt to local market realities. They make a habit of recruiting fantastic people to work in their operations within different countries. They can take into consideration elements that a highly centralized company may not be able to achieve.” On the customer side, Teleperformance serves “a strong geographical client base, and has diverse delivery capabilities, which allow it to assist clients from multiple industry sectors to grow in new and emerging markets,” Jenkins maintains.  —Sarah Sluis

ONE TO WATCH

“Though too large to be considered a boutique firm, Sykes has a bespoke approach that makes each account unique,” Ragsdale says of this year’s One to Watch. The “diversified company” with a “good onshore/offshore footprint” also stands to benefit from its 2012 acquisition of one of the largest home-based organizations, Alpine Access, which Ryan suggests will help the company service a growing U.S. market.  —S.S.