Last year was not the best year for contact center outsourcing services in Latin America. The challenging economic and political scenarios in many countries heavily constrained the market and we are likely to see a similar effect this year.
However, the offshore segment as a whole managed to grow at a double digit rate, due primarily to continuous nearshore developments in the region, a strong performance in the Latam-shore market (services from one Latin American country to another), and a long-awaited, but still slow, recovery of the Spanish market. While the Argentinean, Brazilian and Chilean markets exhibited poor performances in 2015 due to their focus on their domestic businesses, Central America, the Caribbean, Peru, and Colombia enjoyed positive business outcomes driven by their offshore services. Mexico experienced mixed results.
In 2015 the Latin American contact center outsourcing services market decreased its revenue by 10% over the previous year, landing at slightly more than US$10 billion, according to Frost & Sullivan’s Analysis of the Contact Center Outsourcing Services Market in Latin America. The industry was heavily affected by the currency devaluations in countries such as Brazil, Colombia, and Mexico, but that wasn’t the only challenge.
Lack of Omnichannel Demand
Although, omnichannel customer experience is a key part of the shift toward a new digital landscape, the actual demand for these types of solutions is progressing much slower than expected. As stated by many vendors, there is a lot of interest among a lot of companies about this, but few are willing to actually invest in an omnichannel solution. Nevertheless, the use of digital channels for interacting with customers in Latin America continues to grow, as opposed to traditional phone calls, which are decreasing their participation in the front-office segment year after year.
Contact centers are also threatened by the advance of robotics and automation solutions, despite their potential negative effects on the overall contact center business. Even so, this is something they must embrace to enhance their value proposition and stay competitive in the marketplace.
In Latin America, many organizations, particularly communication service providers and banks, are improving their self-service tools and investing in automation solutions such as chat virtual agents and intelligent IVR systems to reduce costs. Consequently, an increasing number of inquiries and issues are resolved without human intervention, and the demand for traditional contact center services is expected to be reduced gradually in the forthcoming years.
Amid all these challenges, there is still some good news for the market. Contact center outsourcing and business process outsourcing (BPO) in general is gaining further acceptance within Latin American countries that consider it as an important economic activity and a key contributor to national economies.
More private and public associations in the region are proactively working to improve the conditions for the BPO industry, especially in countries such as Colombia, Costa Rica, Mexico, and El Salvador. These are very important initiatives to dispel concerns about future limitations in terms of finding enough skilled and English-speaking talent in the region.
Additionally, the Latin American economic and political landscape seems to be slowly improving, which is expected to have a positive impact on the local markets. However, many clients still perceive most service providers in the region as merely call center providers, lacking innovation and business transformation focus and focusing on a cost-saving value proposition.
With that in mind, most major market players in the region are working on changing this image by offering several non front-office services, such as technology-based solutions, back office, finance and accounting, and software development, as well as assuming the role of strategic consultants for their clients.
The impact of higher value services on the revenue pie is growing and will continue to do so, hopefully placing the region’s contact center outsourcing services in a better position to navigate the difficult path that the industry continues to walk.