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Call Centres, Offshoring and Outsourcing - UKProduct Type: Market Research ReportPublished by: Mintel International Group Ltd. Published: June 2005 Product Code: R560-1634 Description Over the last 20 years or so, British financial institutions have been active in setting up call centres to handle high volumes of telephone traffic. They have also been active in contracting with external suppliers for the provision of business services which were formerly provided by internal departments; in other words, outsourcing. In more recent times, they have started to obtain some business services, both from external suppliers and internal departments, from overseas locations; in other words, offshoring. In recent times too, they have shown some interest in expanding the role of call centres beyond their original purpose.
There is often a link at both the strategic and the operational levels between these strands of activity. Some of the manifestations of the resulting business systems are apparent to the end-consumer. For that reason, the end-consumer forms perceptions related to such business systems. The formation of those perceptions is very directly concerned with the development of institutions’ brands. Changes in consumer opinions and brands, even when they do have their origins in business-to-business markets, are at the core of the value delivered to its clients by Mintel and so form a proper subject for Mintel’s Finance Intelligence series. Mintel last examined part of this aspect of the financial services scene more than two years ago in Optimising the Power of Call Centres - UK, Finance Intelligence, October 2002. The purpose of the present report is to update the consumer research, briefly recapitulate the present call centre market in financial services and expand the coverage to include the associated offshoring and outsourcing activities. Finally, these strands of enquiry are brought together in an examination of their consequences for financial services brands. The present report is not intended to be a comprehensive survey of outsourcing in financial services as this is a huge and highly technical field. The aim is to provide the strategic marketing manager - on whose shoulders responsibility for the integrity of the brand will inevitably fall - with a framework for understanding developments in these areas and to provide some hard data on related consumer views. Table of Contents Introduction and Abbreviations Rationale for the report Scope of the report Other reports Global information and research Definitions Consumer research ACORN Abbreviations Executive Summary Background considerations Industry issues Market size The consumer Future development Defining the Market Some basic definitions Call centre Contact centre Offshoring Outsourcing Distinguishing between purchasing and outsourcing The basic difference Cost is a driver Long contracts are the norm A useful perspective Relationship between call centres, offshoring and outsourcing Figure 1: Relationship between call centres, offshoring and outsourcing Outsourcing the ‘boring bits’ Figure 2: Relationship between customers and offshored/outsourced functions The need for business processes and infrastructure Understanding business processes Business architecture Figure 3: Generic business architecture Processes Figure 4: Example process model fragment for mortgage processing Figure 5: Example revised process model fragment for mortgage processing Value chains Figure 6: Representation of typical financial services value chain, card issuing Understanding infrastructure More confusion Technology plays an important role Figure 7: Generic technical architecture Application architecture Infrastructure Relationship between information technology and telecommunications Social architecture Figure 8: Generic social system International Context The United States Continental Europe Offshoring centres Figure 9: Overview of offshore call centre capacity, number of agent places, by selected countries, 2003 and 2004 Figure 10: IT-enabled services, international competitors, by selected country, April 2005 Market Drivers Cultural influences Business culture Fashion and American influence The growth of shared service centres The Zeitgeist Angst Long-term economic changes Shift to services Figure 11: Growth of the UK economy and relative strength of the services sector, gross added value (£billion), 1989-99 The growth of information content Balance of power moving to Asia Expensive labour and cheap goods Technological developments Speed and power of computers Functionality of components Networking Voice and the Internet - enabling the contact centre Competition and regulation Competition environment since 1971 Deregulation of telecommunications Re-regulation Financial regulation Data protection Corporate Social Responsibility TUPE European regulation Distance Selling Directive Electronic Commerce Directive Safe Harbour Agreement European Union VAT Directive Market Size and Trends Market participation Figure 12: Reference model for participation in call centre, offshoring and outsourcing markets Market governance Market size Figure 13: Schematic for market size Call centres Continued growth expected Figure 14: Growth in United Kingdom call centres, by numbers of centres and agent places, 2000-04 Finance dominates Figure 15: Call centre agent places, by market sector, 2000-04 Market value Outsourcing Offshoring Key Players Financial services organisations Figure 16: Financial services’ share of British contact centre industry, by number of agent positions, December 2003 Figure 17: United Kingdom financial services providers cited as using domestic and offshore call centres, by type of provider and location of call centre, April 2005 Suppliers Figure 18: Outsourcing supplier ‘food chain’, March 2005 Facilities management Infrastructure outsourcers Application service providers Shared service centres Specialist business services Call centre specialists Comprehensive outsourcing Consultants Interim management The Consumer Figure 19: Financial products owned, March 2005 We love branches Figure 20: Channel usage, by gender, age and socio-economic group, March 2005 Implications Cockneys on the dog* Figure 21: Channel usage, by TV region, March 2005 Implications Busy urbanites on the blower Figure 22: Channel usage, by Mintel’s Special Groups and ACORN group, March 2005 Implications The upper classes expect service Figure 23: Channel usage, by newspaper readership, technology usage and commercial TV viewing, March 2005 Implications The usual stuff Figure 24: Reasons for telephoning a current account provider, March 2005 Lifestyle is the key Figure 25: Reasons for telephoning overall, by gender, age and socio-economic group, March 2005 Implications Other analyses Consumer Attitudes and Targeting Opportunities Figure 26: Call centres, offshoring and outsourcing, causes of ill feeling, March 2005 Youngsters suffer ‘hold rage’… Figure 27: Causes of ill feeling, by gender, age and socio-economic group, March 2005 Implications …and the middle-aged are weary of the rubbish… Implications …while the upper classes expect better treatment Figure 28: Causes of ill feeling, by newspaper readership, March 2005 Implications Confirmation from the soundbite culture Figure 29: Causes of ill feeling, by commercial TV viewing, March 2005 Implications Attitudes based on experience Figure 30: Attitudes towards offshoring, by gender and socio-economic group, March 2005 Implications Practical considerations are important Figure 31: Attitudes towards offshoring, by TV region and ACORN group, March 2005 Implications The voice of experience Figure 32: Attitudes towards offshoring, by age and Mintel’s Special Groups, March 2005 Implications The phone isn’t everything Figure 33: Attitudes towards the telephone, by gender, March 2005 Implications Figure 34: Attitudes towards the telephone, by age and socio-economic group, March 2005 Implications Londoners on the dog again Figure 35: Attitudes towards offshoring, by TV region and ACORN group, March 2005 Implications Busy lifestyles Figure 36: Attitudes towards offshoring, by Mintel’s Special Groups, March 2005 Figure 37: Attitudes towards telephone security, by Mintel’s Special Groups, after numerical manipulation, March 2005 Implications Class tells Figure 38: Attitudes towards offshoring, by commercial TV viewing and supermarkets used, March 2005 Implications Further analysis Consistent parochialism Figure 39: Attitudes towards offshoring, by channel usage, March 2005 Implications The soothing voice Figure 40: Attitudes towards the telephone, by channel usage, March 2005 Implications Menu rage - the killer feature Figure 41: Sources of ill feeling, by channel usage, March 2005 Implications Figure 42: Generic model for systems qualities Effect on Brand Management Importance of brand philosophy Figure 43: Reference model for brand construction philosophies Impact of call centres Figure 44: Reference model for strategic marketing concepts Lovable Geordies? Figure 45: Location of call centres in the United Kingdom, by region, December 2004 Impact of outsourcing The executive view Industry Views Initial observations Offshoring developments Outsourcing development Call centres Future development of the industry The Future of the Market Change management Figure 46: Generic areas of concern in business process re-engineering projects Whither the call centre, offshoring and outsourcing markets? Figure 47: Call centres, offshoring and outsourcing, potential market lifecycles, 2005 Call centres Outsourcing Offshoring Politics vs. Economics Brand influence |
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