A should cost model is an all-important technique for deriving and forecasting the actual cost of a product/service over the forecasted period. It serves as a competitive edge for supplier negotiations by determining the actual price for the cost components. The outcome helps procurement leaders to understand detailed fact-based cost drivers for the category.
In the contact centers category intelligence study, we have estimated and forecasted pricing for the key cost components while availing services from contact centers. Salaries of variable labor are the largest cost component of contact center services. It accounted for more than 60% share in overall contact center service cost. The cost of facilities also plays an important role in the should-cost analysis of contact center services. The cost of facilities has shown erratic trends. While the rental rates have been on a constant rise in the pre-Covid-19 era, the pandemic has resulted in employees working from home or remote locations and forced companies to upgrade their IT infrastructure to facilitate this change. Since most of these IT investments are of a CAPEX nature, these changes are expected to be sustainable. Hence, there is uncertainty about offices having 100% occupancy post the pandemic as well. With several contact centers not renewing contracts and limiting their physical real estate space, rental rates have dropped significantly. While chances of employees resuming offices physically post the pandemic are moderate to high, it is highly unlikely that rental rates will increase at the rate it used to before the pandemic.
Every organization and its procurement team wants to negotiate the best deal while procuring a set of products or services. Rate benchmarking uses price/cost comparison of more than one set of products/services to analyze the most efficient combination that will help the procurement team to get the optimum rate.
Software development is one of the most important aspects while analyzing the rate benchmarking of contact center services. In our research, we have analyzed the hourly rates of contact center software development per region by using the rate benchmarking method. We found that the average contact center software development cost in the APAC region is 70%-80%% lower than the cost of North America and Western Europe. Moreover, the cost of CSR and supervisors are 20%-30% lower in APAC compare to the rest of the world.
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Labor is one of the key cost components incurred while offering a product or service. Understanding the pricing structure of salary is important for organizations in selecting the appropriate supplier and building a good negotiation strategy. It is also an important factor in determining whether the category under focus should be outsourced or built in-house.
Our research indicates that Concentrix software engineers earn 40% lower salaries than software engineers of other key industry players like Avaya and Exotel. However, Concentrix gives 50% higher bonuses to its software engineers compare to its peers.
It is cumbersome for any organization to continuously track the latest developments in their supplier landscape. Our newsletter service helps them remain updated, to avoid any supply chain disruption which they may face, and keep a track of the latest innovations from the suppliers. Outsourcing such activities help clients focus on their core offerings. Our research on the contact centers market has identified the following developments:
In August 2021, Avaya, a global leader in the contact center industry, announced the acquisition of CTIntegrations, a U.S.-based, specialized contact center software development and system integration company. CTIntegrations provides Avaya with additional digital capabilities for its extensive contact center customer base and will further enhance the Avaya OneCloud AI-powered experience platform.
In June 2021, Asia’s largest cloud communication platform Exotel announced the merger with Asia’s largest contact center platform Ameyo. This merger creates the largest customer engagement cloud platform in the emerging markets, with a presence in 60 countries and an ARR of USD40 million.
In May 2021, Aspect Software announced the merger with Noble Systems to form Alvaria, a new global company delivering optimized customer experience and workforce engagement software and cloud services technology solutions.
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Component wise cost break down for better negotiation for the client, highlights the key cost drivers in the market with future price fluctuation for different materials (e.g.: steel, aluminum, etc.) used in the production process
Offering cost transparency for different products / services procured by the client. A typical report involves 2-3 case scenarios helping clients to select the best suited engagement with the supplier
Determining and forecasting salaries for specific skill set labor to make decision on outsourcing vs in-house.
A typical newsletter study by capturing latest information for specific suppliers related to: M&As, technological innovations, expansion, litigations, bankruptcy etc.
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