Source: computerworld.com.my

KUALA LUMPUR, 18 MARCH 2008 - Malaysian call centres lead the region with continued double-digit growth of 17 per cent, which is higher than the regional average of 15 per cent, says Asia Pacific research organisation Callcentres.net in its “2008 Asian Contact Centre Industry Benchmarking Report”.

According to the analyst firm, this double-digit growth is expected to continue over the next two years due to growth in the domestic industry as well as the Malaysian workforce’s multi-lingual abilities.

The report puts the Malaysian contact centre industry’s annual growth in seat size at 17 per cent (from 2007 to 2008), to about 33,000 seats. The average seat size per centre has also increased from 90 seats in 2007 to 167 seats in 2008. The same has been projected to grow to 225 seats by 2009.

“The drivers behind this considerable 17 per cent growth in the Malaysian contact centre industry market are primarily growth in the domestic industry with 67 per cent of Malaysian contact centres servicing local consumers, as well as an increase in outsourced based contact centre work,” said Callcentres.net president Dr Catriona Wallace .

Dr Wallace compared this to Singapore’s growth rate from 2007 and 2008 as 8 per cent, India’s at 10 per cent and Thailand’s at 15 per cent.

In addition, the language skills offered such as Mandarin, Malay, Indonesian, Cantonese and Tamil, indicated potential as an Asia Pacific based regional hub, she said.

“With 83 per cent of all customer contacts handled by the contact centre channel, as opposed to traditional channels of branches or the sales force, the strategic importance of the contact centre in Malaysia will continue to increase,” she said.

“Continued growth is likely if the Malaysian industry can position its offshore or outsourcing offering as an Asia Pacific based regional hub,” she explained. “This means not necessarily competing against the Philippines and India in attracting English language work from the US and Europe, as the Malaysian labour or wage structure is higher than these countries (US$5,000 base annual wage for an contact centre agent in Malaysia compared to about US$4,000 in Philippines and $US2,800 in India).”

“This can then serve markets that require varied Asian language skills, such as Mandarin, Malay, Indonesian, Cantonese and Tamil. Any growth in the Malaysian contact centre industry must be underpinned by considerable investment in skilling the workforce, 49 per cent of whom currently only have secondary education levels,” she added.

The study, sponsored by software providers Genesys Telecommunications Laboratories, an Alcatel-Lucent company, and Autonomy etalk polled 539 executives representing 2,488 callcentres and 2,488 contact centre seats in Asia.

Wallace said, “We are seeing tremendous growth in the Malaysian contact centre industry which has gained the attention of the international business community who are waiting to see how the Malaysian industry performs and whether it will position as an alternative outsourcing destination to India and the Philippines. However, the key challenge for the Malaysian industry will be to focus on improving its human resource management, particularly in the larger centres, whilst in this period of rapid growth.”

Specifically, this means that the major expense in operating contact centres is labour, which comprises 53 per cent of the total budget.

“The average cost of replacing a contact agent is US$1,030, and average tenure is 18 months with an 18 per cent turnover rate. Managing these two rates are the key challenges for 2008 for Malaysian contact centre managers,” Wallace said.

Source:http://www.crn.com/it-channel/206903038

Cognizant Technology Solutions Corp. (CRN Fast Growth 100, No. 40), the leader in offshore IT services, has found a way to expand its customer base further into Europe by forming a partnership with T-Systems Inc., a division of Deutsche Telekom, Bonn, Germany. The deal is aimed at increasing the geographic footprint of both companies, as well as increasing the breadth of services they offer in Europe, North America, South America and Asia. The thought is that T-Systems’ strong existing customer relationships, combined with Cognizant’s global delivery capacity, will be positioned as a value proposition to customers in the region.

T-Systems is healthy in the German market, with a leading market share of approximately 16 percent, according to global investment titan The Goldman Sachs Group Inc., New York. Analysts at that firm considered the arrangement a “clear strategic positive” for Cognizant, giving it strong headway and a first-mover advantage in Germany. That large market is widely considered by observers to be the next to embrace offshore. In addition, Cognizant’s focus on SAP (NYSE:SAP) should help the partnership get a foothold in the large German SAP installed base.

Cognizant, Teaneck, N.J., provides information technology, consulting and business process outsourcing services through more than 35 global delivery centers. T-Systems focuses on desktop services, systems integration, computing and network services and e-business.

Europe has proved tricky for outsourcing firms such as Cognizant with large Indian operations, as well as for other competitors that have acquired offshore workforces attempting to gain traction, said Reinhard Clemens, management board member for business customers at Deutsche Telekom and CEO of T-Systems.

“Our new alliance will open up new opportunities, add significantly to T-Systems’ profitability and give both partners a stronger footing in key vertical industries,” Clemens said in a statement.

As part of the partnership, T-Systems India and its approximately 1,150 employees will be transferred to Cognizant, which currently employs more than 55,000 worldwide.