There appears to be more smoke than action in the reputed trend of American companies pulling their teleservices and other BPO operations back home from offshore locations, in programs handled in most cases by outsourcing firms.

 

Global teleservices/BPO firm Sitel reports that despite well-publicized moves such as by Dell (News - Alert), most enterprises that have located or outsourced in countries like India are either staying put or expanding in 2009. That goes for Sitel’s clients as well as others that the company has observed. Sitel has over 60,000 agents and supervisors working out of 155+ locations, plus from their homes, in 27 countries.

 

Instead what is happening is that for expanded existing and new programs more companies are ‘smartshoring’ or global sourcing, carefully examining and selecting the right mix of locations: domestic, nearshore, and offshore, including options such as home-based agents.

 

Andrew Kokes, Sitel’s vice president of Marketing, says enterprises are evaluating these choices for customer service skills, including cultural affinity, language abilities, productivity, business continuity, and costs.

 

For example Canada may be coming back into play as a nearshore location as its dollar drops against the U.S. currency, but only if this turns out to be a solid trend that can then be worked into clients’ business plans. The rise of the Canadian dollar to where it had matched the U.S. dollar in 2008 led many teleservices programs to be pulled back across the border.

 

Key to Sitel’s value proposition is the company’s ability to be flexible and offer its customers geographically diverse options. During 2007-2008, Sitel saw portion of business, driven by customer demand for more cost effective options, migrate from Canada to locations such as the Philippines, India and Morocco for English and French-Canadian customer support. 

 

While such strategies may slow the growth in volumes of calls handled offshore they will not, the firm result in a big increase in domestic contact center work and jobs.

 

“We haven't seen a significant decrease in offshore activity,” observes Kokes. “Companies are increasingly looking to diversify their business through the best portfolio of service locations, whether it be domestic, nearshore or offshore.”

 

This multiplex strategy, which also includes working with more than one BPO supplier, enables corporations to better manage their budgets, and risks. If there are customer service issues or rising costs at one site or supplier, these clients can have their programs changed to other locales and vendors.

 

Kokes points to an unnamed client who had asked Sitel to expand programs and seats at both its Managua, Nicaragua and its Corning (News - Alert), N.Y. contact centers. Sitel has added a second contact center in Managua, at the site of the former U.S. Embassy, now a technology park, and is doubling its Nicaragua-based workforce to 1,200 employees. It is also adding 200 seats in Corning.

 

Sitel is continuing to expand in the domestic, nearshore and offshore locations that are in demand by the company’s customer base. The diverse vertical make up of its client base requires that the company provide geographically diverse options for them to consider.

 

Companies are also reviewing outsourcing compared with managing contacts in-house. While the firm is seeing more interest, driven by the economic downturn, existing and potential clients are not shutting down their internal operations wholesale either.

 

“There had in the past been a rush by companies to go offshore with outsourcers to cut costs, but now they have become more cautious because they have experienced how complex such a strategy can be with issues like agents relating to customers,” explains Kokes. “They want a contact center strategy that makes the most sense to them.”

 

One of the key new determinants by clients in selecting locations is the salience and value of proximity to customer retention, and revenues including to specific customer profiles and demographics. Many have sought to have programs aimed at baby boomers (now 45+) handled domestically because these individuals are more sensitive and resistant to having their customer care handled by offshore agents.

 

“We have seen and we recommend clients have their ‘first opportunity of customer interaction’ handled by domestic contact center agents,” says Amit Shandarkass, Sitel’s Chief Global Marketing Officer. “This reduces the risk of customers being turned away from our clients from these encounters. Once customers are regularly doing business with our clients and are used to them then it is feasible to have future calls answered by agents outside of the U.S.”

 

Kokes has seen regional banks, cable companies, and healthcare providers that wanted Sitel to go one step further: placing their programs handled in the same geographies as their customers.

 

“These firms sought not only contact center agents who are onshore but who are also very close to home, and who can identify with their customers,” explains Kokes.

 

One increasingly popular option for Sitel’s clients is home-based agents. Sitel’s program, which it has branded as ‘HomeShore’, launched last year and now has over 900 agents in the U.S. and Canada supplementing center based operations.