Slowing growth hits home Agent hype

Melbourne, 4th February 2010. A focus on ‘onshoring’ and cost-cutting has held back the growth of outsourced home agents in the contact centre industry, according to a new report from industry analyst firm Ovum.

“The outsourced home agent market is not growing as fast as previously thought, and many internal vendor targets for home agent growth have not been met”, said Patrick O’Brien, Senior Analyst. Although this is partly due to the recession, Ovum believes this is also down to vendors marketing home agents as a labour arbitrage play, expecting its growth to follow the trajectory of offshore delivery, and a number of vendors have now changed strategy.

While nearly all press reports on home agents have focused on the model’s environmental benefits and the ability of clients to keep work onshore, an Ovum survey of contact centre vendors classed these as the least important of a list of 12 potential benefits. While there are significant cost benefits from using home agents, the savings cannot compete with its fellow remote model – offshore outsourcing. The survey placed cost savings as only the sixth most important benefit, while improved quality and flexibility came out on top.

“There has been a fixation with offering home agent delivery as an alternative to offshoring, passing on some of the cost savings over facilities-based delivery, while bringing the cultural alignment benefits of onshore delivery,” said O’Brien. “This has not worked because many clients, rightly or wrongly, regard the home agent model as riskier than offshore.”

The problem is security, and while vendors have made significant improvements in this area, the problem of effectively monitoring home workers often makes it a step too far for many clients.

O’Brien does not believe that the true benefits of the home agent model have been communicated well by vendors. “There are many cases where a home agent model can deliver benefits that facilities-based or offshore delivery cannot compete with, such as on quality of agent and flexibility,” said O’Brien. “Customers who need agents with niche hard-to-find skills can, through the outsourcing vendor, attract workers from across the US, rather than just places within commutable distances of their facilities. It also offers unrivalled flexibility for customers with fluctuating usage demands.”

“Home agent delivery is not a one-size-fits-all strategy, but a powerful option that vendors can offer to certain customers, and as such, Ovum expects that it will become a modestly significant delivery model in the US, where over 95% of outsourced home agents are based, but will not gain much traction in other regions.”