Tuesday, January 25, 2011

Predictions for the Asia Pacific Contact Center Market in 2011

Predictions for the Asia Pacific Contact Center Market in 2011

2010 was an interesting year for the contact center industry in Asia Pacific. The first half of the year was slow and saw limited growth in investment in technology and seat expansions. However, the second half seemed to be much better and pushed the entire year into steady positive growth. Despite several trends being subdued as enterprises made a cautious return from the global financial crisis, we saw increased activity in the areas of Self-service, Analytics and leveraging Social Media for customer service. As we enter the new decade, Frost & Sullivan believes that these trends will be the driver for increased investment in Contact Center Applications.
This insight attempts to discuss the top industry trends in 2011 that are impacting contact centers across the world and especially in Asia Pacific.

1. Return to Customer Acquisition

The theme of customer acquisition will drive investments from contact centers in the region in 2011. This could lead to simply expanding contact center seats, to investing in advanced outbound dialers, or investing in Analytics to help fine-tune sales strategies.

While 2009 & 2010 were dominated by the “More with Less” or like I would put it “More with Lesser” theme, Frost & Sullivan believes that decisions on technology in 2011 will be determined by the need to grow faster and acquire more customers. This does not mean that contact centers will suddenly find an extra pot of cash and hence the need to optimize operations goes away, but the priority of investment will shift towards growth-aiding technologies or processes.

2. Analytics

Reporting has always been a key element of the contact center. Analytics is the next step for contact centers to improve operations and drive customer satisfaction. Contact Centers are struggling to keep up with the changing customer expectations and maintaining satisfaction levels. Analytics promises to deliver improvements in operations, quality processes and customer satisfaction. The bigger promise in my opinion is that Analytics gives the contact center the rare chance to be a Strategic part of the organization, not just a Profit center or Cost center.

Speech analytics technology is maturing and we are beginning to see deployments in Asia Pacific. Though most deployments are still for the English language, we are beginning to see some pilots for non-English languages as well.

Using a combination of speech analytics with data & screen capture analytics, contact centers can not only identify root cause for certain operational bottle-necks or hone directly into the “bad” calls which led to customer churn, but also deliver insights back to the enterprise on competitive deals, product enhancements and marketing effectiveness. Life no longer is about “90% of calls in 30 seconds” but instead looking at the top reasons for customer churn, hence, shifting the image of the contact center to a Strategic part of the enterprise.

3. Contact Center in the Cloud

The last 18 months has seen a significant increase in interest from enterprises to look at Cloud-based alternatives for many IT applications and systems. The value proposition of Cloud-based Contact Center Applications is just as valid as it is for Business Applications such as CRM and Salesforce Automation.

Hosted Contact Centers have been around in Asia Pacific for a few years, and have seen limited success so far. By the end of 2010, we expect over 93,000 hosted seats in the Asia Pacific region. There is strong interest from Telecom Service Providers to offer Hosted Contact Center solutions, and offer bundled packages of Communications & Network Services with Contact Center Application Delivery. Telecom Service Providers in many markets have shown interest and already have a Hosted Contact Center offering. The demand for such services so far has been lukewarm due to the lack of good case studies on the success of such a model and perceived issues with security and lack of control.

The push towards Cloud-based services across Software-as-a-Service, Platform-as-a-Service and Infrastructure-as-a-Service, and the strong benefits that many enterprises are realizing by moving to such a model coupled with the strong validation of the Cloud model by vendors such as Microsoft, IBM, Cisco, Salesforce.com is making CIOs consider Cloud alternatives for a portion of their IT investments.

Apart from local Telcos and Global Service Providers such as BT, some large System Integrators are also looking to start a Cloud service practice and offer a Cloud-based Contact Center solution. In 2011, we expect the momentum for such services to pick up, and drive adoption especially in the markets of Australia, India, Japan, Taiwan and parts of South-East Asia.

4. More Self-Service

Self-service as a trend is more pronounced amongst Generation Y, and given that Asia Pacific has large Gen-Y population, the need to have good self-service channels is critical for most contact centers. The trend towards Self-service is not limited to just IVRs (Integrated Voice Response), but focused increasingly on Web self-service and Mobile self-service.

There is a strong push towards using IVR as a call resolution platform instead of just a call routing tool. There is strong growth in consulting services to identify processes and transactions that can be pushed to an IVR. Markets such as India, China, and Indonesia are expected to see strong growth in IVR adoption.
2011 will continue to see investments in IVRs and Voice Portals, and we expect the IVR market to grow at double digit growth rate in 2011 in the Asia Pacific region.

5. Mobile Customer Care

Smart phone adoption has sky-rocketed in the Asia Pacific region. Mobile Broadband is changing the way consumers are accessing information, using the internet and expecting service. Mobile Applications is redefining customer expectations and is creating yet another degree of separation between the customer and the traditional call center.

In 2011, we expect to see leading enterprises in the Asia Pacific region launch Mobile Applications to deliver differentiated customer experience, and link it with the rest of the contact center.

6. Investments will begin to trickle in for Social Media Applications

2010 was the year of experimentation with social media for customer service. Telcos, Banks and Hotels setup small teams of 3-7 people who would spend their time “listening” to the different social channels, and “selectively responding” to customers. Some companies took a physical world view to the web 2.0 world by operating their twitter responses from 9 AM to 5 PM. Others chose to just listen in and not respond, while very few took a holistic approach to listening, participating and being pro-active on this channel.

Due to the experimental nature, there was little if any investment on social media tools. In 2011, however, as companies get more serious about Social Media and as the trend of Social media continues to be strong, we expect more effort from contact centers in trying to manage this new channel for customer engagement.

There are still many issues with adoption – who should take ownership (is it Marketing or Customer Service?), who decides what to write on behalf of the organization (any legal implications?), what will be the volume of interactions that I need to handle on social, how do I operationalize this new channel with the rest of the contact center, or just plain fear that once you get in, you can’t get out! Efforts on educating the market will need to continue, and we expect real investment on social media tools to begin in 2011.

7. Multi-Channel

Perhaps very Old School for many markets, but given the diverse nature of Asia Pacific we believe that there is still going to good amount of investment in offering a multi-channel service to customers. Markets such as Indonesia, Vietnam, Thailand, India and China will see good investment in this area.

More mature markets such as Australia, and parts of the Indian contact center industry will look at ways to better integrate the different channels and provide a seamless and consistent experience across the different channels.
Investments in SMS based notifications, Email and Web Chat will continue to be strong in 2011.

8. Domestic Outsourcing

The strong growth in the Asia Pacific Contact Center industry in the past decade was fueled in a large part by the trend of offshoring and offshore outsourcing. Markets of India and Philippines have seen significant growth over the last decade on the back of this trend.

Although offshore contact center outsourcing still dominates the market in India, the last 24 months has seen a strong growth in domestic outsourcing i.e. companies in India outsourcing their contact center work to Indian outsourcers. This trend is not limited to India, but is also happening across Australia, China, Indonesia and Japan.

The shift from Offshore Outsourcing to Domestic Outsourcing has implications on the cost per seat and hence the cost of technology that these outsourcers will be able to afford, however, given the large scale of business, there is a strong upside in the market due to increased investment from Outsourcers driven by the opportunity in the domestic markets of Asia Pacific.

9. Extension into the Enterprise

There are two ways in which we are seeing the extension of the contact center into the enterprise.

A) Leveraging the larger enterprise workforce as part of the customer service process. This could include enterprise experts who are more empowered than agents to help with call resolution, or leveraging branch workers and remote workers as contact center agents during certain downtimes at the branches. Unified Communications tools such as Presence, Instant Messaging (IM) and Conferencing are being deployed in order to enable such capabilities.
In 2010, the adoption of Unified Communication applications in the Contact Center was in early stages, however, as Banks, Telcos, Retail companies begin to deploy Unified Communications in their enterprise, extending those applications and capability to the Contact Center will also become important.
Apart from extending to enterprise experts, in 2011, the trend towards remote agent is expected to show some growth in select markets of the region, especially Australia.

B) Extending Optimization tools to the Back-office. The contact center has invested significantly over workforce management & performance management tools that have led to increased efficiency in the contact center. The back-office operations in the enterprise have similar operational challenges as the contact center, and are beginning to see merit in adopting Workforce Optimization tools that are used in the Contact Center, for their back-office operations.
In 2011, we expect to see more adoption of such tools in the back-office coupled with work flow management applications as well.

10. Video in the Contact Center

I thought for a while before I decided to include Video as one of the key trends in 2011. As of 2010, the vision of a Video Contact Center was barely existent in the Asia Pacific region with the exception of a couple of deals in markets such as Korea. In 2011, we still do not expect any significant investment in video yet. However, we will begin to see video applications on smart phones and tablets begin to emerge which will require Heads of Customer Service to rethink their stance on a Video-based customer service models.

With 3G penetration rising in Asia Pacific and more smart phones and tablets with 2-way video capability, the chances of having a customer service application that incorporates video capability is not too much of a stretch. However, any main stream adoption for video in the contact center might not happen until the second half of 2012 or 2013.


In 2011, Frost & Sullivan expects the Asia Pacific Contact Center industry to have close to 30,000 contact centers with more than 2.4 million seats, and the Contact Center Applications market to grow in the range of 9 – 11 % to reach close to US$ 800 Million in revenues.

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