TRENDS DRIVING DEALMAKING INVOLVING BPOS AND CONTACT CENTERS The contact center BPO sector has long been characterized by aggressive M & A ( merger and acquisition ) activity . Many of the names of companies from 10 years ago , including SYKES , Convergys , SITEL , APAC and West , have long since disappeared . And there is every indication that this pattern will continue .
Here are several trends that are expected to drive sector M & A in 2024 .
1 . Equity capital availability . The ample supply of equity capital has continued to serve as a catalyst for M & A , with both strategic and financial buyers actively competing for high-quality assets .
2 . Value creation . In today ’ s competitive landscape , acquisitions remain a primary lever in value creation with buyers looking to grow their geographic footprints , enhance technology , expand service offerings , and enter new industry verticals . These value drivers will continue to fuel dealmaking , with consolidation expected to continue across a fragmented landscape .
3 . Expansion opportunity . The opportunity to expand into new industries , especially healthcare , retail , and finance , continues to play a significant role in driving deal activity . Rising wages and increased operating costs have helped steer employers towards BPO companies as a method of cost control .
In 2021 , many companies ramped up hiring to meet increased demand as the economy recovered from the COVID-19 pandemic . However , as economic growth has slowed , workers are now being laid off , which has directly benefited BPOs that can supplement a diminished workforce and meet clients ’ operational needs .
As a result , companies are increasingly outsourcing services to BPOs and contact centers with a proven track record and expertise in these industries .
A recent example of a strategic acquisition illustrating this trend is Continuum Global Solutions ’ acquisition of Faneuil ( September 2023 ), a BPO specializing in the public utilities , government , and healthcare services industries .
With the acquisition , Continuum added to its growing portfolio of industry verticals which includes healthcare , media and telecommunications , and the public sector .
4 . Technology investment . In the current environment , it has become more important than ever for companies to invest in technology to stay relevant for their customers .
Cloud-based platforms , speech recognition , AI ( artificial intelligence ), and automation drive more personal and empathetic experiences . All while delivering higher quality service and improved experiences that are being demanded by customers .
Technology is not replacing the human element but rather enabling increased productivity and enhancing the CX ( customer experience ). Companies that embrace the tech-with-talent model elevate the agents ’ role by automating simpler tasks and enabling the agent to focus on more complex customer interactions .
An example of this is TTEC ’ s acquisition of Avtex ( March 2021 ) whereby TTEC augmented its capabilities in the areas of cloud services , mobile connectivity , CX , infrastructure , managed services , and business intelligence .
Increased end-market demand can be attributed to the specialized expertise needed from contact center agents .
For example , in the healthcare industry , agents are required to have a deep understanding of medical terminology and regulatory compliance .
Similarly , the hospitality industry requires agents who can deliver personalized and seamless guest experiences . Meanwhile retail and consumer-centric businesses require agents who are well-versed in product knowledge and customer engagement .
SOURCE : PITCHBOOK AND BGL RESEARCH , YTD PERIOD ENDED 9 / 30 / 2023
5 . Complementary , expanded offerings . Acquirers have increasingly targeted businesses with expertise in specialized business process outsourcing to complement their core contact center offerings .
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