TTEC Just Told Its Shareholders What Could Be Coming for Your Contact Center Program

TTEC reported its second-quarter results Monday night.

Revenue was down 11.3% to $455.5 million. Adjusted EBITDA fell to $39 million from $52 million a year ago. Free cash flow came in at $39 million, compared with $86 million last year.

Those numbers matter to investors.

But if you outsource customer support, there was something else in the report that should matter more to you.

TTEC's Board authorized management to explore strategic alternatives for TTEC Digital, its technology business, with PJT Partners advising on the process.

Meanwhile, the company continues working to improve the economics of TTEC Engage.

That's the part of the business that operates contact centers.

That's where many client programs actually live.

And TTEC gave some clues about what improving those economics could look like.

Why I'd read this even if TTEC isn't your provider

Almost nobody buying outsourced customer support reads their provider's earnings reports.

I understand why.

You're running a contact center, not managing a stock portfolio. An hour of revenue guidance, EBITDA and analyst questions doesn't seem particularly relevant to your 200-agent program.

But I've spent most of my career on the buyer's side of this industry, and I've learned that earnings calls can tell you things your account team probably won't.

Your provider isn't going to call you and say:

"We need to improve margins, and your program may be part of how we do it."

But public companies have to explain their plans to shareholders every quarter.

And sometimes those plans have direct implications for clients.

TTEC CEO Ken Tuchman talked about working with clients to "optimize or transition low-margin programs," deploying front-line AI and automation, and simplifying the company's cost structure through best-shore delivery.

From an investor's perspective, that sounds like a reasonable margin improvement plan.

From a client's perspective, I hear three questions:

Could my program be repriced or transitioned?

Could more of my customer interactions be automated?

Could my delivery location change?

None of those things are automatically bad.

But you should know the answers before they happen.

This isn't a story about the big BPOs disappearing

That's an important distinction.

It's easy to look at results like these and conclude that the traditional BPO industry is in trouble.

The numbers don't support something that simple.

Genpact recently reported revenue growth of 7.1%, with its agentic solutions business growing much faster. Concentrix lowered its full-year outlook while discussing faster offshore movement by clients and restructuring efforts. Teleperformance has been working through its own reset.

So I don't think we're watching the BPO industry collapse.

We're watching it sort itself out.

Some providers are growing.

Some are restructuring.

Some are shifting their delivery models.

Some are betting heavily on AI.

And that creates a different problem for buyers.

The provider that looked like the right choice three years ago may not be the same company today.

That's why vendor evaluation shouldn't end when the contract gets signed.

Six questions I'd ask my BPO right now

Earnings reports are useful because they take vague concerns and turn them into specific questions.

Here are six I would bring to the next business review.

1. Is my program considered low-margin?

If your provider is publicly talking about optimizing or transitioning low-margin programs, ask where your account sits.

You may not get the exact margin.

That's fine.

Ask whether your program falls into the category being reviewed for pricing, restructuring or transition.

And pay attention to how directly they answer.

2. What does "best shore" mean for my program?

"Best shore" sounds good in a presentation.

In practice, it usually means finding the delivery location that gives the provider the best combination of cost, talent, capacity and performance.

That could be good for you.

It could also mean your program eventually moves.

Ask whether your current location is being reviewed. Then look at your contract.

How much control do you actually have over where the work is performed?

I've seen plenty of agreements where buyers thought they had more protection than they actually did.

3. Which part of the business does my program depend on?

This matters more than most buyers realize.

A large BPO isn't one business.

It can have technology divisions, consulting businesses, offshore operations, traditional contact centers and specialized services all performing very differently.

Don't just look at the provider's total revenue.

Find the segment that actually operates your program.

Then look at what's happening there.

That's the business you're really betting on.

4. If AI reduces my contact volume, who gets the savings?

This is going to become one of the biggest commercial questions in outsourcing.

Imagine AI handles 30% of the contacts currently reaching agents.

The provider now needs fewer people.

Great.

But what happens to your bill?

If your commercial model wasn't designed around automation, the answer may not be what you expect.

The provider could capture most of the productivity benefit while your pricing changes very little.

That's why AI shouldn't just be an operational conversation.

It needs to be a commercial one.

Before signing an AI amendment, talk about gainsharing, volume tiers, productivity commitments and how savings will actually flow back to you.

5. What happens to the agents when AI takes the easy contacts?

This is the part I think gets overlooked.

AI usually takes the simple work first.

Password resets.

Basic account questions.

Order status.

Routine transactions.

What remains for human agents?

The difficult calls.

The unusual problems.

The angry customers.

The people thinking about leaving.

So even if total contact volume falls, the work reaching agents can become harder.

Average handle time can rise. First-contact resolution can change. Training requirements can increase.

And suddenly the SLAs you negotiated three years ago are measuring a completely different workload.

If you're introducing automation, your human-agent KPIs should probably be reviewed at the same time.

6. What's attrition on my account?

Not the company.

Not the country.

Not the site.

Your account.

Ask for trailing four-quarter attrition for agents and team leaders separately.

Then compare it with the previous year.

Company-wide attrition can hide a lot.

A mature financial-services program and a seasonal retail ramp shouldn't be blended together when you're trying to understand the health of your operation.

And when providers start cutting costs, I pay particular attention to supervisors, trainers, QA and other support roles.

Those changes can take months to show up in your headline KPIs.

What a good answer sounds like

A provider facing financial pressure isn't automatically a bad partner.

Every business deals with pressure.

Some of the best BPO operators I've worked with have gone through difficult periods.

What matters is how transparent they are with clients.

If you ask about account attrition, you should get an account-level number.

If you ask whether your delivery location could change, you should get a clear explanation of the plan and what your contract allows.

If automation will reduce staffing, the provider should be willing to discuss how the economics change for both sides.

What you don't want is a company-wide average when you asked about your program.

Or a relationship answer to a contract question.

"We would never do that to a client like you" isn't contractual protection.

If something matters, put it in the agreement.

One important disclosure

Providers pay Outsource Pros.

Our service is free to the companies we help because our provider partners compensate us when we make a successful placement.

So keep that in mind when reading this.

I also don't think large public BPOs are inherently a bad choice.

For a global company operating across multiple countries, languages and regulatory environments, scale can be incredibly valuable.

Large providers can offer infrastructure, compliance capabilities, redundancy, recruiting capacity and geographic reach that smaller operators simply can't match.

The point isn't "avoid the giants."

The point is to understand what is happening inside the company you're trusting with your customers.

Because several major providers are publicly talking about AI, offshore delivery, restructuring and margin improvement.

Those strategies eventually reach the operating floor.

And buyers who understand that will negotiate differently from buyers who don't.

Bottom line

Your provider's investor relations page may be one of the best sources of information you're not reading.

Every quarter, public BPOs tell shareholders where they're growing, where they're struggling, where they're cutting costs and where they're investing.

That information can tell you a lot about what could eventually reach your account.

So before your next QBR, read the latest earnings release.

Then ask your provider these six questions.

And if you're evaluating a new outsourcing partner, don't just compare pricing, locations and capabilities.

Look at the health and direction of the company behind the proposal.

At Outsource Pros, we help companies evaluate contact center and CX providers from the buyer's side. That includes the things that don't always make it into the sales presentation: financial direction, delivery risk, commercial structure, AI strategy and what happens after the contract is signed.

There's no cost to the client.

If you're reviewing your current provider or considering a change, let's talk. We'll look at the situation with you and tell you what we see.