Offshore call centre savings unsustainable

3 July 2007
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04 July 2007 | Paul Snell

Making savings by offshoring call centre work is becoming increasingly difficult for financial services firms.

Analysis of more than 50 call centres by Compass Management Consultants found lower labour costs are disappearing as wages increase. It said personnel overheads had risen by around 15 per cent a year in countries such as India.

The study found many banks were looking for short-term savings of around 15 per cent by offshoring. But these savings could be doubled if firms instead analysed and improved the efficiency of UK operations.

The review also found other benefits companies wanted to achieve by offshoring, such as improving processes and increasing productivity, were myths. Calls to offshore centres can take more than 100 per cent longer because of misunderstandings and language problems.

Simon Scarrott, head of business development and marketing at Compass, said: "It is not enough to simply offload problem operations and inefficient processes to other countries in the hope they will improve. The key issue is to what extent savings are real, sustainable and continue to enhance the customer experience."

He added financial services firms should be considering how their operations compare to others in the sector and how they can improve efficiency, rather than simply thinking about which country to choose.

SMjul2007

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