Analysis of the Contact Center Outsourcing

Services Market in Latin America

New Technologies and Increasing Customers´ Expectations Provide a

New Window for Differentiation

K1B3-76

September 2017

K1B3-76 2

Study Description & Research Methodology

K1B3-76 3

Scope & Definitions

• This study examines the trends in the contact center outsourcing services

market in Latin America and forecasts the market size. It also provides

extensive coverage of the services delivered in each local market and those

provided from the Latin American countries to others overseas. In this sense,

offshore services are defined as services provided to serve foreign customers

outside the country, where each contact center is located. The study shows

data for outsourcing services alone, excluding operations performed in-house

and Shared Services Centers. This study segments and differentiates the

contact center outsourcing services market in a number of ways. Among these

segments are the following categories: – Domestic and Offshore Services.

– Offshore Markets.

– Service Function.

– Industry Verticals.

– Tier of Competition.

– Market Share.

– Channel of Contacts.

Study Description

K1B3-76 4

Scope & Definitions

• Contact Center Outsourcing is a subset of the much broader business process outsourcing

(BPO) industry. It is usually defined as a business arrangement in which a company contracts

an outside supplier to perform a service rather than accomplishing it in-house. Services can

range from simple call-handling to handling complex business processes such as technical

support and customer self-service through interactive voice response (IVR) applications or the

Web. Suppliers specialize in handling high volumes of inbound and outbound calls for

customer care, retention, and acquisition; help desk; technical support; collections; and

telemarketing/telesales for business clients. These clients contract in most cases, the use of

both the required technology and employee services (including managers, agents, and

process experts).

• This study does not include in-house contact center operations and captive contact center

providers (including shared services centers). Frost & Sullivan considers a contact center

service provider (CCSP) as captive if 80% or more of its revenue is generated by a single

client. Many service providers that serve its parent company are included in this study, as long

as less than 90% of its revenue its generated by that partnership, e.g., Emtelco (Colombia)

and Entel (Chile).

• In this study, contact center outsourcing revenues are segmented by customer service,

technical support and help desk, sales, debt collections, back office, and other BPO activities,

as long as the core activity of the service provider is the customer relationship management

(CRM). Therefore, non-CRM/BPO service providers are excluded as well as debt collection

agencies, translation service providers and law firms.

Study Description

K1B3-76 5

Research Methodology

• Over 80 interviews carried out utilizing extensive questionnaire.

• In all cases, decision makers (executives, managers, etc.) targeted.

Study based principally on primary research

Other Steps in Research Process:

• Regional and local secondary sources (company reports, industry associations,

statistical agencies, etc.) used for key economic & market measurements used

for analysis.

• Extensive forecast and market share models created through research sources,

expected current and future trends.

K1B3-76 6

Executive Summary

K1B3-76 7

Executive Summary – Latin America

• The contact center outsourcing services market in LATAM attained $9.52 billion in

revenue in 2016, which represents a 5.4% decrease compared to 2015. The

devaluation of LATAM currencies against the US dollar (especially against the

Argentinian (60.2%), Mexican (17.8%), Chilean (17.4%) and Colombian (12.4%) pesos)

had a profound and negative impact in the market measured in US Dollars.

• Despite the currency fluctuations the market grew in outsourced contact center agents

by 2.0% in 2016 year over year (YOY) and reached 789,952, whereas the number of

WKs attained 594,324, a 4.4% YOY increase.

• In 2016, the domestic business in LATAM reached $6.55 billion in revenue and

accounted for 68.8% of the total market, a 3.5% reduction against 2015 (72.3%). This

segment was negatively affected by poor performances in Brazil and Argentina.

• The offshoring business in LATAM grew at a YOY rate of 6.7% in 2016, reaching $2.62

billion in revenue, driven by the US market (nearshoring) and the Canada. This

segment is forecasted to represent 29.5% of the total market in 2022, while it only

accounted for 24.4% in 2015.

K1B3-76 8

Market Drivers (Latin America)

Contact Center Outsourcing Services Market: Key Market Drivers, Latin America, 2017–2022

Impact: H High M Medium L Low Note: Drivers & restraints are ranked in order of impact. Source: Frost & Sullivan analysis.

Mark

et

Dri

vers

1–2 years 3–4 years 5–6 years

U.S. Demand is Expected to Provide Sustained

Growth for CCSPs with Latin American Facilities H H M

New Technologies and Increasing Customers´

Expectations Provide a New Window for

Differentiation for the CCSPs

M H H

New Regulatory Environment in Brazil Likely to push

Further Outsourcing in the Customer Care field L M M

Expected Economic Recovery in Latin America Will

Increase Local Demand for Contact Center Services L L M

K1B3-76 9

Market Restrains (Latin America)

Contact Center Outsourcing Services Market: Key Market Restraints, Latin America 2017–2022

Impact: H High M Medium L Low Note: Drivers & restraints are ranked in order of impact. Source: Frost & Sullivan analysis.

Mark

et

Restr

ain

s

1–2 years 3–4 years 5–6 years

Increasing Adoption of Automated Solutions Will

Decrease the Volume of Interactions Headed to Contact

Centers Agents

M H H

Major Clients are Improving Operational Efficiency and

Reducing Call Volumes to the Contact Centers M H H

Scarcity of English-Speaking Talent Restrains Major

Expansion of Large Nearshore Deals M M M

Lack of Service Diversification is Forcing Most

Providers to Engage in a War Price M M L

K1B3-76 10

Executive Summary Peru

K1B3-76 11

Executive Summary – Peru

• The Peruvian contact center outsourcing services market reached Sol$ 1.54 billion in

revenue in 2016, a 11.5% increase against 2015.

• Revenue measured in U.S. dollars ( US$ 455.7 million) increased by 3.7% year over

year. Exchange rates used in the analysis were the yearly average: $3.4 for 2016 and

$3.1 in 2015.

• Total number of Workstations reached 32,700 in 2016, a 8.3% increase against 2015.

• The number of Agents attained 45,600, a 5.2% increase compared to 2015.

• The domestic market accounted for 62.1% of the total revenue in 2016 and generated

US$ 283.2 million. Meanwhile the offshore segment attained US$ 172.5 million.

• Telecom & Media and Banks and Financial Services represented slightly more than

85% of the total market in 2016, while other verticals such as Retail, Healthcare,

Government, Industry, Utilities, Travel & Hospitality accounted for the remaining.

K1B3-76 12

Contact Center Outsourcing Services Market—Peru

Revenue Evolution

Note: All figures are rounded. The base year is 2016. Source: Frost & Sullivan analysis.

$ 439.5 $ 455.7

0

100

200

300

400

500

2015 2016

Rev

en

ue

(U

S$ M

illio

ns)

Contact Center Outsourcing Services Market: Revenue Peru, 2015-2016

K1B3-76 13

Note: All figures are rounded. The base year is 2016. Source: Frost & Sullivan analysis.

Domestic Market 62.1%

Offshore Revenues

37.9%

Total Contact Center Outsourcing Services Market: Revenue by Domestic vs Offshore Market, Peru, 2016

Contact Center Outsourcing Services Market—Revenue

by Domestic vs Offshore Market, Peru, 2016

K1B3-76 14

Executive Summary Growth Opportunities and

Strategic Imperative

K1B3-76 15

Growth Opportunities

Ignite the Digital Transformation

Automation via Artificial Intelligence

Customer Lifetime Value

Virtual Agent / Advisor

Industry Focus: Retail

K1B3-76 16

Strategic Imperative

• The arisen of new technologies for customer care – such as cloud computing, analytics,

speech recognition, omnichannel capabilities, digital services, intelligent IVRs, virtual

agents and, more recently, artificial intelligence – is requiring stronger investments to offer

full-fledge services, as well as new skills and larger expertise in managing them. And at

the same time, consumers are increasingly demanding high quality and seamless

experiences from their providers.

• This scenario represents a unique opportunity for contact center service providers

(CCSPs), since they specialize in customer experience management, are experts in the

matter and can usually provide better quality of services than internal contact centers.

Moreover, as the CCSPs often manage larger volumes than internal contact centers, they

are able to more effectively amortize the investments in new technologies.

• Consequently, the most relevant competitive advantage of the CCSPs against the internal

contact centers is evolving from a cost-saving standpoint, to being able to deliver a more

robust customer experience services and attained higher customer satisfaction marks

through best of breed technologies and enhanced processes.

K1B3-76 17

Legal Disclaimer

Frost & Sullivan takes no responsibility for any incorrect information supplied to us by

manufacturers or users. Quantitative market information is based primarily on interviews

and therefore is subject to fluctuation. Frost & Sullivan research services are limited

publications containing valuable market information provided to a select group of customers.

Our customers acknowledge, when ordering or downloading, that Frost & Sullivan research

services are for customers’ internal use and not for general publication or disclosure to third

parties. No part of this research service may be given, lent, resold or disclosed to

noncustomers without written permission. Furthermore, no part may be reproduced, stored

in a retrieval system, or transmitted in any form or by any means, electronic, mechanical,

photocopying, recording or otherwise, without the permission of the publisher.

For information regarding permission, write to:

Frost & Sullivan

331 E. Evelyn Ave. Suite 100

Mountain View, CA 94041

© 2017 Frost & Sullivan. All rights reserved. This document contains highly confidential information and is the sole property of Frost & Sullivan.

No part of it may be circulated, quoted, copied or otherwise reproduced without the written approval of Frost & Sullivan.

K1B3-76 18

Appendix

K1B3-76 19

Partial List of Companies Interviewed

• ACC Group

• Aegis

• Algar Tecnologia

• Allied Global

• Almaviva

• Alorica

• Apex America

• Arvato

• Atento

• Avanza

• Axtel

• Call Contact Center

• CGS

• Clienting

• Comdata Group

• Conduent

• Contax

• CSU Contact Center

• Deelo Source: Frost & Sullivan research.

• Digitex

• Emergia

• Emtelco

• Entel

• Flex Contact Center

• Grupo Konecta

• GSS

• HDC

• Hinduja Global Services

• Influent

• KM2 Solutions

• HP Enterprise Services

• IBEX Global

• Interactivo

• iQor

• ITEL BPO

• NeoBPO

• Unisono

• Transcom Worldwide

• Qualfon

• OneLink BPO

• Outsourcing

• Radius Global Solutions

• Sitel

• Sykes

• Sutherland Global

Services

• Teletech

• Teleperformance

• Telus International

• Telvista

• Task Solutions

• UpCom

• Ventas y Servicios

• V/N Global BPO

K1B3-76 20

Interested in Full Access? Connect With Us

Francesca Valente Marketing & Corporate Communications - Latin America

(54) 11 4777 5300

francesca.valente@frost.com

Research Authors

Sebastian

Menutti

Senior Industry

Analyst

@smenutti

Juan Gonzalez

Research Director

@juanmgon

Maiara Munhoz

Senior Industry

Analyst @maiara_munhoz

Facebook https://www.facebook.com/FrostandSullivan

LinkedIn Group https://www.linkedin.com/company/frost-&-sullivan

SlideShare http://www.slideshare.net/FrostandSullivan

Twitter https://twitter.com/Frost_Sullivan

Frost & Sullivan Events http://bit.ly/MvPRbQ

GIL Community http://ww2.frost.com/gil-community/

K1B3-76 21

The Frost & Sullivan Story

K1B3-76 22

Who is Frost & Sullivan

Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth and

achieve best-in-class positions in growth, innovation and leadership. The company's Growth

Partnership Service provides the CEO and the CEO's Growth Team with disciplined

research and best-practice models to drive the generation, evaluation, and implementation

of powerful growth strategies. Frost & Sullivan leverages 50 years of experience in

partnering with Global 1000 companies, emerging businesses and the investment

community from more than 40 offices on six continents.

To join our Growth Partnership, please visit http://www.frost.com.

K1B3-76 23

What Makes Us Unique

All services aligned on growth to help clients develop and implement

innovative growth strategies

Continuous monitoring of industries and their convergence, giving clients first

mover advantage in emerging opportunities

More than 40 global offices ensure that clients gain global perspective to

mitigate risk and sustain long term growth

Proprietary TEAM Methodology integrates 7 critical research perspectives to

optimize growth investments

Career research and case studies for the CEOs’ Growth Team to ensure

growth strategy implementation at best practice levels

Close collaboration with clients in developing their research-based visionary

perspective to drive GIL

Focused on Growth

Industry Coverage

Global Footprint

Career Best Practices

360 Degree Perspective

Visionary Innovation Partner

K1B3-76 24

TEAM Methodology

Frost & Sullivan’s proprietary TEAM Methodology ensures that clients have a complete 360 Degree

PerspectiveTM from which to drive decision making. Technical, Econometric, Application, and Market

information ensures that clients have a comprehensive view of industries, markets, and technology.

Technical

Real-time intelligence on technology, including emerging technologies, new

R&D breakthroughs, technology forecasting, impact analysis, groundbreaking

research, and licensing opportunities.

Econometric

In-depth qualitative and quantitative research focused on timely and critical

global, regional, and country-specific trends, including the political,

demographic, and socioeconomic landscapes.

Application

Insightful strategies, networking opportunities, and best practices that can be

applied for enhanced market growth; interactions between the client, peers,

and Frost & Sullivan representatives that result in added value and

effectiveness.

Market

Global and regional market analysis, including drivers and restraints, market

trends, regulatory changes, competitive insights, growth forecasts, industry

challenges, strategic recommendations, and end-user perspectives.

K1B3-76 25

Our Global Footprint 40+ Offices Scanning the Globe for Opportunities and Innovation