Ovum: Brazil’s contact centers must diversify

Consulting firm Frost & Sullivan (F&S) recently predicted strong growth in the Brazilian contact center market over the next few years. IT Decisions comments on the findings.

F&S predicts revenue growth in the segment from $3.9bn in 2009 to $7.1bn in 2015 – almost doubling the market size. But the market is in a state of flux. Revenue per agent is reducing and clients are expecting higher service levels, so what can the service companies do?

Contact center firms are increasingly turning to technology solutions, because improved automation and management of customer contact can detach the revenue of a contact center from the number of agents employed, allowing exponential growth.

“The spectrum of outsourcing services is expanding in Brazil as vendors strive to balance the need for commoditization against the inevitable rise of lower-cost competition and price erosion”, said industry manager for Frost & Sullivan Latin America, Juan Gonzalez.

It is obvious that contact centers globally are on shifting sands. Technology for handling customer contact is improving and many new regions and suppliers are entering the market for outsourced services. Social networks are entirely changing how many consumers interact with companies potentially making the traditional contact center irrelevant.

But apart from industry growth, what else is happening in Brazil? IT Decisions talked to Peter Ryan, lead analyst for business process outsourcing (BPO) and contact centers at analyst firm Ovum to get his opinions on the recent market developments.

“The domestic opportunity is the main area of focus. The economy is growing, volumes are increasing, so most contact centers in Brazil are focused on local customers. It is very different to places such as India, focused on exporting English-language services, and I don’t see that changing,” Ryan said.

Clearly Ryan believes that there is a short and long term picture for Brazil: with strong growth driven by domestic needs that could develop into a future international industry.

“I think there is an argument to develop more international and English-language skills for the long-term. South Africa seems to have fallen out of favor in the past few years, India’s luster is fading and the Philippines can only develop the market so far,” he said.

“If Brazil’s government and trade associations look outside their local market, they should be able to identify a big opportunity for non-Portuguese language services.”

Ryan elaborates on his long-term focus further by explaining that Brazil could be a major player in multilingual services, but this future vision requires immediate action.

“Companies are looking for new alternative markets away from the established ones and Brazil has a large labor pool.  When you see what has been going on in Egypt recently, it’s clear that companies want good value when going offshore, but they also need stability,” the analyst said.

“If the Brazilian trade associations really want to get more business from export markets then the work has to start now,” he added.

The opportunity is out there, but it wont just happen without intervention. The question is, are the Brazilian contact centers – and other high-tech service firms – happy to keep on riding domestic growth, or do they want a bigger slice of a global pie?

Click below to listen to Peter Ryan explaining the Brazilian focus on the domestic contact center market:

Click below to listen to Peter Ryan explaining his thoughts on long-term growth prospects for the sector in Brazil

Click here to listen to Peter Ryan outlining his ideas of Brazil as a new alternative market

 

Image by Lamont Cranston used under the Creative Commons license.