Contact Center Review
Contact Center Review, an initiative by Novistra Capital, is a curated quarterly newsletter to keep you updated about the Contact Center Industry. In this annual review of the year 2021, we bring you latest news & developments, along with select M&A transactions for the calendar year.
The Contact Center & BPO sector has shown signs of optimism despite COVID-19 related global concerns related to increased skill shortages, workplace disruption and political gridlocks. As per IBISWorld, the total sector revenue is projected to reach $60.3 billion by 2025, growing at a CAGR of 2.4% over the period. The pandemic accelerated digital transformation in the labour-intensive sector with heightened focus on efficiency and Customer Experience (CX). Contact centers continue to invest in cloud, Artificial Intelligence (AI), Machine Learning (ML) and automation & robotics/ RPA to effectively enhance products & services, reduce costs, and accelerate growth. We expect these technologies to gain further traction in 2022 and provide valuable revenue opportunities for innovative market participants.
The exponential rise in social media and online content has resulted in the need to monitor, process and manage the related expansive datasets. Contact centers are providing data annotation and content moderation services to address this market. Also, heightened competition in the e-commerce sector has shifted companies’ focus on order fulfilment and CX to scale up and retain customers. This has resulted in Contact centers enhancing their focus on innovative end-to-end fulfilment solutions to meet the growing demand from sellers and platforms.
The contact center industry reported strong M&A activity in 2021. Strategic buyers led the deal count as they pursued acquisitions to integrate new technologies, expand service offerings and enter new markets. Armed with dry powder and demand for platform additions, PE-backed transactions also witnessed an uptick. Novistra closed three transactions this year in this industry, where it acted as the exclusive sell-side advisor. We expect the sector’s continued focus on predictive analytics, automation and CX to drive transaction volumes in 2022.
Upcoming Industry Events
Novistra Capital is a boutique M&A and PE advisory group with a strong focus on the Contact Center Industry. Founded in 2010, Novistra has a team of experienced professionals, located across three offices in the US, UK and India. Please contact the following members of the Novistra team to discuss strategic options for your company.
Ripun Jai Mehta
(646) 645 1935
(917) 460 0659
Peter X. Li
(917) 250 8605
(437) 234 1151
Latest News & Developments
Migration to cloud remains top priority for contact centers
The shift of enterprise IT workloads from on-premise infrastructure to third-party data centers is a long-term trend that has gained momentum during the COVID-19 pandemic, prompting cloud migration initiatives to support a distributed workforce. According to Forbes, a significant majority of small and medium-sized businesses are adopting virtual storage systems, SaaS and PaaS platforms, rather than investing directly in data centers, hardware, software, and the personnel required to implement new technologies. The pandemic has significantly accelerated cloud contact center migration. According to research firm Metrigy’s “Customer Engagement Transformation: 2020-21” global study of 700 organizations, currently, multi-tenant and single tenant cloud contact centers account for almost 36% and 25% of deployments, respectively.
RPA is being widely implemented to boost efficiency in the contact center industry
Robotic Process Automation is being actively implemented by contact centers to improve CX and streamline conventional processes. The usage of conversational AI tools assist with overcoming employees’ redundancies and ensure a positive brand experience by connecting with users through their preferred choice of channel. As per UI Path, RPA is being used to automate cognitive tasks, grow its knowledge base and make smarter decisions with the help of a historical learning feed. Artificial intelligence helps automate 90% of the process with hybrid robots. These robots can predict the category, priority and impact of the service ticket, based on the email body, quite easily with the help of AI. Overall, AI and RPA are two of the most successful technologies for organizations to achieve increasing customer satisfaction and employee morale while reducing operational costs.
Increased focus on social media tools demands need for outsourcing
According to PEW Research Center, the exponential increase in social media accounts have created an opportunity to obtain consumer data and feedback ,which can be processed using predictive analytics to enhance a company’s ability to analyze upcoming trends and innovations. Contact centers and BPO companies are now investing in real-time customer engagement tools that enable them to gain first-hand product insights and turn client challenges into new products and solutions. These new service offerings, represent a huge market opportunity, ranging from social media monitoring to business intelligence and actioning customer response. Content moderation is one the most important tasks that BPOs are performing today, fulfilling outsourced contracts for social media giants ranging from Facebook to TikTok. Powered by multilingual teams and technology, these BPOs screen millions of texts and images over a single workday, cleaning data and acting moderators for content on the social media platforms. However, strong policies and procedures are must to ensure that BPOs and in turn their clients don’t cross path with regulators for failing to censor data on the client’s platform.
Contact centers supporting e-commerce fulfilment at every stage
Given the high and rising costs of omnichannel order fulfillment, companies are faced with challenges to maintain seamless fulfilment as they work towards improving delivery speeds to improve CX. With the pandemic accelerating digital adoption, the growth of the e-commerce sector has skyrocketed, and companies are outsourcing some of their work to stay ahead of the competition. In order to ensure good fulfillment experience, companies need the right customer support at each stage of the fulfillment, including order processing, order tracking, omnichannel proactive communication and return. Contact centers can take up orders and process tracking requests and most importantly reach out to customers and inform them about any expected delays and provide estimated time of delivery. Outsourcing e-commerce fulfillment is turning out to be extremely beneficial to companies during the pandemic, especially when in-house manpower and resources are constrained. Fulfilment contact centers are assisting retailers and e-commerce players to meet their performance requirements, while allowing them to focus on their core business.
Select M&A Transactions in 2021
Select M&A Transactions in 2021
Select M&A Deals in the Contact Center industry
Global technology investment firm, Silver Lake completed the acquisition of 100% stake in Grupo BC, from its majority holders L-GAM. Founded in 2013, L-GAM is an international investment company and partners with the Princely House of Liechtenstein and other major European, Asian and American families. Grupo BC is a leading BPO focused on providing mortgage management, legal and digital services to the financial sector in Iberia and Latin America. The investment also includes the acquisition of iAhorro, a digital mortgage advisor in Spain, which is an essential part of the group’s integrated offering to financial institutions. The financial details of the transaction were not disclosed. The acquisition will strengthen and expand Grupo BC’s and iAhorro’s products and solutions range and continue its track-record of pioneering digital innovation. The acquisition is consistent with the management’s focus on building out company’s software and data analytics capabilities and drive continued organic and inorganic growth.
Global customer care and technology company, 24-7 touch acquired Goodbay Technologies, a provider of digital business process outsourcing services. 24-7 Intouch and Goodbay Technologies are leaders in the customer care industry and focus on combining CX with best-in-class technology. Founded in 2002, Goodbay initially focused on consumer electronics support and pivoted to mobile application, gaming and new economy clients in 2011. The financial details of the transaction were not disclosed. This acquisition is expected to enhance its globally diverse customer service solutions. Goodbay Technologies will become a wholly owned subsidiary of 24-7 Intouch and continue to operate independently with its focus on gaming, mobile app, consumer technology and new economy clients. The investment in Goodbay Technologies complements 24-7 Intouch’s global footprint and will increase its ability to support digital solutions and onboard an experienced management team. The acquisition includes additional on-campus and work-from-home capabilities for 24-7 Intouch in India, the Philippines and Jamaica.
Support Services Group (SSG), a global contact center solutions company announced the acquisition of Innovation Vision (IV), a Canada-based marketing technology BPO catering to high growth companies in technology and e-commerce sectors. The company provides BPO, process automation, customer experience and analytics solutions to enterprise and start-up clients, via an omnichannel approach. Founded in 2002 by CEO Sajan Choksi, IV has its delivery center in Jamaica, with over 900 employees. SSG operates 27 contact centers and work-from-home hubs across the US, Canada, Latin America, Europe, and Asia with over 9500 employees. The financial details of the transaction were not disclosed. IV aligns perfectly with SSG’s strategy and values, and the acquisition was made in response to the rising demand for premium international customer experience. This will also help SSG expand its operations in Canada and Jamaica. Novistra acted as the exclusive sell-side advisor to Innovative Vision for the transaction.
Allied Global BPO (Allied), a multilingual contact center with 13 delivery centres across 6 countries, offering business and technology services to US and Latin American clients, completed a majority stake investment in CallTek Inc. CallTek is a contact center offering omni channel customer care, technical support and field services to the US market. It employs 600 agents that offer white labelled services through its offices in the US and the Philippines. CallTek continues to attract blue-chip Hospitality clients seeking an IT and BPO provider capable of servicing their end customer touchpoints in real-time. Allied has processed more than $2 billion of hotel reservations for The Travel & Hospitality sector, and CallTek is positioned to expand Allied’s portfolio of services to Central and South American clients. Also, Allied will leverage its strong expertise in the BPO sector to work together with CallTek’s management and accelerate growth. Novistra Capital acted as the sell-side advisor to CallTek for the transaction.
The US Contact Center Industry grew in 2021
Public Comparable Company Analysis – US Contact Center Industry
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