THE contact centre industry can expect an exciting 12 months ahead similar to the one it experienced in 2005. This was revealed in a latest research by Frost & Sullivan, which found that the number of contact centres in Asia Pacific, which totalled over 21,360 in 2004, is expected to grow at a healthy CAGR (compound annual growth rate) of 9.1% to reach some 39,247 contact centres by the end of 2011.

The location of a contact centre seems to be one of the overriding factors when choosing a contact centre partner. The report indicates that many companies in Japan and South Korea are looking towards China to offshore their contact centre operations. Meanwhile, contact centres in Singapore are considering neighbouring Malaysia as an attractive alternative for greater cost benefits, while some Australian companies are moving their contact centres within the region to India and the Philippines.

Although cost is still the top reason for companies to offshore and outsource in the Asia Pacific, the quality of the service offered is the defining factor that will make a country the foremost choice for contact centre outsourcing. `Contact centres are fast assuming increased importance in the business process as customer service becomes the key differentiator for product or service preference,' notes Frost & Sullivan research analyst Shivanu Shukla. This being the case, he says the scalability of operations, flexibility and increased focus on business processes - rather than the management of the technology infrastructure and staffing issues - are likely to drive outsourcing in the contact centre segment.

However, the contact centre industry is challenged by high labour attrition rate, averaging at 19.8% in the Asia Pacific in 2004. In growth markets such as India and the Philippines, attrition rates are even higher owing to the increase in demand for contact centre agents. `With agents rapidly shifting to contact centres that either remunerate better or offer better incentives, recruiting, managing and retaining staff has become one of the biggest issues that contact centres across Asia Pacific need to deal with,' notes Shukla.

Developed markets such as Australia and Hong Kong have, over the years, established ways to maintain or even reduce attrition.

The report states that, at present, banking, financial services, and insurance (BFSI) companies followed by telecommunications and IT companies continue to be the top contributors to total contact centre seats in the Asia Pacific. As governments across the the Asia Pacific launch their e- government initiatives to provide channels for greater interaction with the general public, domestic demand for contact centres is expected to intensify. Such factors, combined with the inherent benefits of contact centre outsourcing, will hike demand for this market in the Asia Pacific thus ensuring its steady growth.