Digital plays bigger role in customer service contracts

The proportion of public sector customer service contracts incorporating digital channels increased by more than a third in 2014, according to new research.

A survey of public sector outsourcing found that in 2014 67% of such contracts were multi-channel in nature – up from 50% during the previous year.

The survey, carried out by outsourcing firm Avarto, found that local government organisations were increasingly including web chat and social media management across their customer service provision.

A spokesman for Avarto told “The contracts will be considered multi-channel if they feature traditional contact centre activities – normally phone – alongside digital delivery.

“We are putting the rise down to the e-government initiative ensuring that most new local government customer services contracts are multi-channel in nature. In particular email, web chat, and social media support were commonplace.”

Local government outsourcing contracts signed in 2014 were worth a total of £606 million, with a 60% / 40% split between business process and ICT outsourcing deals.

Overall, the average value of local government outsourcing contracts increased by 15% year-on-year to £30.3m during 2014.

The research revealed that 60% of all local government contracts signed in 2014 were second generation outsourcing relationships – extensions, renewals or the replacement of incumbents – up from 37% in 2013.

In addition, 11% of contracts included agreements to invest in transformation projects aimed at reducing service costs.

Debra Maxwell, managing director of Arvato UK, said: “Local government has long been at the forefront of UK outsourcing and our 2014 review shows that local authorities are increasingly focusing on securing more sophisticated deals. Digital is now a key part of customer services contracts, showing that authorities are utilising their outsourcing partnerships to really transform services and deliver channel shift.”

Colin Marrs

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