Newsletter Seventeen

Dear Reader,

Welcome to Issue 17 of Outbound Focus, a free email publication of Sytel Limited.

This issue, we hear from a correspondent in Asia on the past, present and future of offshore outsourcing, written specially for Outbound Focus.

What is not in this issue is more on predictive dialer legislation! All is quiet on that front but we expect to see a final decision from California on the issue of abandoned calls there soon, and you can expect a word or two from us when it appears.

Jamie Stewart

In This Issue

    Offshore Outbound in Asia
    Bad Vision


We welcome this contribution from Rob O’Malley. Rob is a 10-year veteran of the European and Asian call center outsourcing industries. He had previously worked at SitelTeleperformance and Inkfish before moving to Asia. He worked on a number of high-profile consulting arrangements with leading offshore vendors before helping to set up Asian Call Centres in Manila, Philippines. He is currently The Chief Operating Officer of Asian Call Centres.

Offshore Outbound in Asia – Past, Present and Future
By Rob O’Malley

This article looks at how the offshore outbound industry has got to where it is today and how global call center trends indicate the development of this industry over the next 5 years.


When the offshore call center industry first started in India, most people, including me, believed it would predominantly serve the inbound customer service market rather than an outbound sales market. In my travels, the thing which always amazed me was the willingness of people to help (so often lacking in modern Western cultures), especially in India and The Philippines. Sales people in developing countries, however, are often too pushy or simply ignore you. These years of experience led me to the conclusion that Asians could provide excellent service to Westerners but couldn’t sell to them.

I assume a similar theory led all the new offshore vendors to focus on inbound work. However, most offshore call centers are currently full of outbound work but very little inbound. Why?

From Inbound to Outbound

Basically, because it was easier for companies to outsource outbound than inbound. They could do it quickly, cheaply and easily and if it didn’t work, then could pull it back. Most of the initial work was the low-value work which US and UK call centers didn’t want. However, they quickly proved that outbound could be done successfully and started to move up the value-chain. Major vendors have now effectively eliminated telecommunications and infrastructure issues and the model for effective outbound has already been developed.



People often ask “Which countries?”. The fact is that it is only English language call center work which is being moved offshore. Two countries dominate the market: the Philippines and India, but other countries are trying to get on the scene including NepalPakistanSouth Africa and Jamaica. Other former British colonies with relatively developed infrastructure and good levels of English will also provide good alternatives.

We will see trends appear as to preferred locations in coming years with some countries specializing in specific types of work.

Capacity for Growth

There has been some talk regarding oversaturation of call centers should the proposed growth become reality. In fact, nothing could be further from the truth. Take the Philippines, for example. The natural tendency of the Filipino graduate is to leave the country, similar to the way in which the Irish left Ireland… until there was a boom. There are currently over 7 million Filipinos living and working in other countries. Add massive unemployment to this and you don’t need to be a mathematician to see the potential for growth.


Impact Back Home

The domestic markets in the US and the UK will be affected but only minimally for the ‘in-house’ call center market, which has proved far less likely to outsource offshore.

However, there is and will continue to be a major shake-up for outsourcing companies. There is already over-capacity in the domestic outsourcing sector and the growth of offshore call centers will continue to squeeze margins and force consolidation.

Scale and Growth

The size of each operation moving to offshore locations will steadily grow. In terms of specific industries, the growth will vary hugely from industry to industry:

  • The publishing industry will probably move almost all of their work offshore.
  • Utilities and telecommunications will also be major movers as they are very cost-sensitive.
  • The I.T. industry will push lead-generation and telemarketing work to reduce costs in a market with shrinking margins.
  • The financial services industry will be a significant player except in sensitive areas of the industry where there will be little movement. We’ve already seen high profile companies such as HSBC and Prudential very firmly behind moving operations offshore.

I predict essentially 3 periods for the offshore industry:

  1. Honeymoon Period (until 2003)
    Call center companies are currently experiencing a honeymoon period with their shareholders, employees and Governments. For the vendors in these offshore locations, finding good quality staff is easy, as call centers are seen to be part of the ‘developed world’. Investors are still investing large sums of money into call center ventures even though it is not clear when they will start to see a return on their investment.
  2. Decision Time (2003 – 2005)
    This is already starting on a small scale. Companies are starting to ask questions like:
    • Is offshore outsourcing right for my business?
    • If so, for which types of work, and where?
    • Should it be a short-term tactic or long-term strategy?
    The growth of the offshore industry will be fuelled by
    • an economic recovery limiting the availability of agents in developed countries
    • continued downward pressure on costs
    • governments in Asian countries continuing to develop new initiatives to encourage call center investment.
    A number of Indian owned companies will go bankrupt as a direct result of their over-investment in costly IT infrastructures, which are too expensive to maintain with the increasingly tight margins. Others will sell their facilities or merge with foreign partners. By the end of 2006, we can expect over 80% of vendors to be 100% owned by British and American shareholders.

    The Philippines will actually take over India in terms of number of agents before the end of 2003, especially for more high value work into the US market.

    The interest in accreditation bodies such as the Customer Operations Performance Center (COPC) will continue to grow in developing countries but this will short-term as clients and vendors fail to experience the promised benefits.
  3. Consolidation (2006 – ?)
    Growth will slow and it will very difficult for new companies to obtain a significant market share. Some call centers will start to set up in more remote areas. The size of each vendor will be substantially larger than now but there is likely to be less vendors. These vendors will operate in a number of locations and possibly across international borders.


This industry is here to stay and will grow at major rates over the next few years. If the industry ensures that this growth is balanced with quality management, it will flourish. There are serious opportunities for people involved in this industry and my advice to people in the UK and US outbound market would be to seize them and not fight them.

We thank Rob for his contribution.

Do you have any views on offshore outsourcing? We will publish any well-argued contributions.


Bad Vision

We received this input from a call center manager, who understandably doesn’t want to be named.

Half an hour before the start of the morning shift, an agent calls his supervisor to say he won’t be coming in today.

Agent – “I’m having a vision problem.”

Supervisor – “Sounds bad. What’s wrong?”

Agent – “I just can’t see myself at work today.”

Know any outbound anecdotes? Send us an email.

What is the Champagne Challenge?

Write for Outbound Focus, win a crate of Champagne!

How do I enter?

Click here to enter >>

All newsletters >>