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 Demand for Enterprise Storage to Grow at 90% Through 2004

 Networked Call Center Market Set to Grow

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 CRM Initiatives Spur Demand for a Host of Customer Service Technologies



Networked Call Center Market Set to Grow

A new report by independent market analysts Datamonitor (DTM.L) 'Networked Call Centers', concludes that the market for advanced network routing services is on the verge of boom as multi-site routing solutions are becoming extremely popular with large and medium-sized firms globally.

This shift will provide lucrative revenues opportunities for telcos, technology vendors and service providers, and also grow the number of agent positions in networked call centers.

Datamonitor predicts that the number of networked call centers in Europe will increase from 460 in 2001 to 684 in 2004 when networked call centers will account for 19% of Europe's overall call center agent positions.

By comparison in the US, networked call centers will total 1010 by 2004 and account for 18% of overall call center agent positions. In Europe and the US, 34% and 51% of virtual call centers respectively will be virtual hosted call centers by 2004.

Hosted or networked call centers are call centers that use routing applications to switch calls between call centers. The routing functionality is hosted by telcos (or other service providers) on their own networks.

When full automatic call distributor (ACD) integration is achieved, several sites can work in a virtual call center environment.

Network routing technology solutions have many advantages for fragmented enterprises seeking to unify their call center operations including:

• A single point of contact for customers and partners;

• Unified architecture without the need for large investments;

• Increased efficiency through better use of IVR and other routing engines;

• Potential costs savings or revenue generation due to increased efficiency;

• Highly scalable solution.

Additional benefits include:

• Not having to build a virtual call center which is very expensive

• Ability to add sites relatively easily

• Cheaper deals on call minutes (particularly attractive for large call centers)

• Not having to expand the capacity of the corporate network to accommodate more traffic between sites

• Outsourced services

Examples of industry sectors currently using these services include financial services institutions (banking and insurance), large retailers and travel agents.

Although less than 1% of US and European call centers currently use advanced network routing services, Datamonitor predicts that by 2004, 34% of virtual call centers in Europe and 51% in the US, will be virtually hosted call centres.

Service providers should gradually pull out of the unprofitable hosted call center market and focus on the virtual call center market as it will be the most lucrative

Two distinct segments can be identified within the networked call center market:

• Hosted call centers, using network routing solutions without automatic call distributor (ACD) integration;

• Virtual hosted call centers, using a network routing solution integrated with an ACD or ACDs on site.

Due to the number of agent positions it represents, the virtual call centre market is a particularly profitable area. Virtual hosted call centers tend to have over 500 agent positions.

As virtual hosted solutions enable call centers to increase agent utilization and the overall efficiency of the call center, a virtual call center will use significantly more call minutes than a traditional multi-site call center.

Elsa Lion, Datamonitor technology analyst comments:

"By offering virtual hosted call centre services, service providers can generate higher average revenues per user and increased value-added services in order to compensate for call minute price erosion."

At present 11% and 12% of European and US agent positions respectively use network routing services. This will increase to 18% and 19% respectively in 2004 and most of these agent positions will be in virtual call centers.

Although very few technology vendors are capable of providing scalable and reliable solutions, and few service providers are actually able to host these solutions, the market for hosted and networked call centres will represent a significant chunk of the overall call center market.

Leading technology vendors and service providers should offer multimedia and Internet protocal (IP) even though demand is currently low. Although the immediate demand for full multimedia capabilities is quite low (web collaboration, email for example), the limits of many solutions on the market mean that there is also a supply gap.

In the longer term, companies will demand more multimedia capabilities, particularly universal multimedia queuing. In addition, the demand for IP solutions is gaining momentum in the market and offers new entrants an opportunity to compete with more established service providers (i.e. large telcos).

New entrants and less established players, both vendors and service providers, will have to compete by offering greater functionality than the more established players and by targeting the multimedia and IP gaps in their portfolio.

 

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