India most cost-competitive outsourcing centre: study

The new Datamonitor report, 'The Global Offshore Cost Assessment'. assesses contact center expenses, breaking them out into salary, benefits (incentives and statutory), property costs, IT / Telecommunications and taxation / foreign exchange. The report compares the cost in major offshore and nearshore markets, including: Argentina, Brazil, Canada, Chile, Egypt, Hong Kong, Hungary, India, Malaysia, Mexico, the Philippines, Poland, Singapore and South Africa. Not only are spending allocations examined, also are fully-loaded agent prices in both traditional and emerging contact center offshore locations.

Survey of the results reveals India and the Philippines continue to remain the most cost-competitive offshore locations for contact centres in Asia Pacific despite fast-emerging competition in the region. Hong Kong and Singapore are slightly more expensive locations due to high living costs. Malaysia is an immature and cost competitive market.

Egypt remains the most price competitive market in Europe, the Middle East and Africa (EMEA) examined in this study due to its scalability and relative immaturity. Hungarian and Polish agent costs are significant, while proportionately benefit spending tends to be lower. South Africa remains the highest cost location, due to agent sophistication and the appreciation of the local currency.

Three Latin American countries -- Argentina, Brazil and Chile -- provide the lowest fully-loaded call center agent price point among all offshore locations examined in this study. Due to a large, scalable labour force, growing multilingual capabilities and proactive domestic players, offshore investors will find good customer care prospects in each of these countries. Mexico, despite being slightly more expensive, is also cost-effective.

Conversely, Canada and South Africa are significantly more expensive on a per agent basis. But, Peter Ryan, Call Center and CRM analyst with Datamonitor and author of the study, explains that this is not all bad news for these locations.

'Considering the legacy of contact center offshoring in both Canada and South Africa, investors will pay a higher price per agent, however they will generally be guaranteed an excellent quality of labour as well as technology that is second to none.'

Key competitive challenges

Datamonitor's report highlights strategic recommendations that should be followed by offshore investors should they wish to ensure prudent cost management. These include:

-Analyzing what are the key competitive costs that need to be rationalized.

-Taking the appropriate actions to reduce costs whenever possible.

-Seeking diversification opportunities in order to reduce investment concentration risks.

Ryan concludes, 'Cost management is a huge problem for many offshore contact center investors, and in most cases this is unnecessary. By being able to predict where costs will rise as a percent of total expense based on current trends, prudent financial management and healthy bottom lines should not be difficult outcomes.'

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'Business & Tech Offshoring Consultant'