Call Centre boom to ease into solid market

Suppliers of call centre technology rode the crest of a market boom fuelled by the establishment of a number of large call centres in 1998. While the lumpy market for call centre technology is not likely to sustain this rapid growth, overall market prospects remain solid as call centres grow in importance as profit centres, and as key enablers of customer relations management.

According to information technology (IT) and telecommunications market research specialists and consultants BMI-TechKnowledge`s SA Call Centre Market Quantification Report (August 1999), the SA market for call centre hardware, software and IT professional services (excluding outsourcing services) grew by 73% during 1998, following on growth of 60% in 1997. The SA call centre market is now worth 2.2% of the entire SA IT market. The report is published in a suite with the SA Call Centre End-User Report and the SA Market for PABX Equipment and Services report.

The SA call centre industry comprised 11 900 agent positions at the 1998, after a massive 53% growth. At the end of 1998, there were 259 call centre sites with ten or more agent positions - up 13% from the 230 in 1997. The number of sites is forecast to grow at a compound annual growth rate (CAGR) of 7% from 1998 to 2003, according to the end-user report.

Research analysts Megan Taylor and Stephen Carrott forecasts limited growth of overall call centre IT spend of 6% for this year. "This reduction in market growth does not represent a decline in opportunity for the supply of call centre solutions, but rather a correction of market growth rates. Market growth in 1997 and 1998 was largely driven by a small number of very large deals in telecommunications and financial services. Contracts of this magnitude will be awarded with decreasing regularity over the next few years, as most of the largest corporates have already installed their call centres. There will be a significant swing in expenditure over coming years as call centre spend becomes directed away from hardware infrastructure toward software and services," they write.

According to them, revenues will increasingly be derived from smaller green-field sites as well as upgrades to existing sites. The market, as a whole, is forecast to grow at a CAGR of 10% per year until 2003. The CAGR from 1997 to 2003 is estimated at 19%.

Local product market shares are increasingly reflecting international trends, as the leading international players establish offices or conclude distribution deals with leading SA integrators. According to Taylor and Carrott, his has seen SA product vendors repositioning themselves as independent call centre integrators, while targeting their products predominantly at international markets. The SA market, even though currently heavily traded, continues to be dominated by a handful of competitors who are able to capture the handful of large contracts awarded every year.

According to Taylor and Carrott in the end-user report, the SA call centre outsourcing market is growing rapidly, after being severely under-developed in 1997. There were approximately 900 specialist outsource seats at the end of 1998, accounting for 8% of total agent positions.

Similarly, Internet enablement of SA call centre sites increased dramatically between 1997 and 1998. At the end of 1997, approximately 1% of SA sites were Internet enabled. This figure soared to 33% by May 1999.

However, Internet enablement remains limited to e-mail and "call-me-back" functionality. Implementation of advanced Internet options is only expected to reach a maximum of 20% of call centre sites by 2003. "The implementation of Internet enablement technologies presents substantial opportunities for call centre solutions suppliers over the medium term," Taylor and Carrott say.