Revenues in this industry totaled $22 billion in 2002, and are projected to reach $25.72 billion by 2009, according to new analysis from Frost & Sullivan, North American Outsourced Contact Services Market.

Shrinking service budgets and the need to continue providing high levels of service compel many existing clients to consolidate their outsourcing agencies. Such companies are now resorting to lengthy "request for proposal" (RFP) processes for new projects, thereby hoping to attract more competitive pricing options.

On the other hand, reduced budgets are driving many new companies to seek the services of an outsourcing agency. Such a move enables them to manage customer care as a variable rather than a fixed cost, and frees them from the responsibility of recruiting qualified agents and acquiring the latest technologies. See also: Survey: Outsourcing Increases Productivity

"The need to do more for less is driving many major companies to outsource customer care services as an alternative to internal expansion," said Frost & Sullivan Industry Analyst Katherine Shariq.

However, the size and complexity of potential projects are such that only the largest outsourcers can tackle them. Increasingly, major corporations are demanding a gamut of services such as the integration of multiple databases and diverse technologies, back-office billing, and procurement and distribution functions.
  
Outsourcing agencies that can provide a host of complementary services and forge partnerships with major system integrators will emerge winners. In this competitive market, building a business model aimed at reducing the average interaction time per customer delivers greater satisfaction and generates higher volumes of transaction at lower costs.