Harvest or Divestment Strategy
for Activities of call centres (ISIC 8220)
The Harvest or Divestment strategy has a high industry fit (Priority: 4) for the 'Activities of call centres' due to the profound technological disruptions and market pressures. With the rise of AI and automation, many traditional call centre functions are becoming commoditized or obsolete...
Why This Strategy Applies
A strategy for industries in terminal decline or 'Dog' quadrants, focused on maximizing short-term cash flow and halting long-term investment.
GTIAS pillars this strategy draws on — and this industry's average score per pillar
These pillar scores reflect Activities of call centres's structural characteristics. Higher scores indicate greater complexity or risk — see the full scorecard for all 81 attributes.
Harvest or Divestment Strategy applied to this industry
The call center industry faces an urgent mandate to divest from commoditized, high-risk transactional services due to rapid automation and increasing structural vulnerabilities. Strategic harvesting is critical to free up capital and talent for immediate reinvestment into higher-value, AI-augmented customer experience offerings, preventing rapid erosion of profitability and market relevance.
Aggressively Exit Transactional-Only Inbound Services
Basic inbound queries, characterized by low demand stickiness (ER05: 2/5) and high market contestability (ER06: 2/5), are rapidly commoditizing due to AI advancements. These services offer minimal differentiation and are increasingly prone to price wars, making them unsustainable as core offerings.
Identify and systematically phase out contracts for purely transactional inbound call center services within 12-18 months, prioritizing those with low profitability margins and high churn potential to reallocate resources.
Divest from Geographies with Soaring Labor and Currency Risks
Offshore centers, despite global integration (ER02: Deeply Integrated), face severe profitability erosion due to high social and labor risks (SU02: 4/5) and significant structural currency mismatches (FR02: 4/5). These combined factors make long-term investment in specific regions financially untenable.
Conduct an immediate profitability and risk audit of all offshore locations; initiate divestment or aggressive harvesting for sites showing high SU02 and FR02 scores within 6-9 months, or pivot to highly specialized services only.
Harvest Services Burdened by Uninsurable Compliance Costs
Services with high regulatory complexity and 'High Compliance Costs' (CS04) often exhibit very low risk insurability (FR06: 1/5), making them disproportionately expensive to maintain. The low resilience capital intensity (ER08: 2/5) further exacerbates the impact of these burdens on operational flexibility and profitability.
Isolate and harvest client portfolios or service lines where uninsurable compliance costs consume over 15% of gross revenue, especially if these services do not contribute to strategic differentiation or high-value customer engagement.
Free Up Capital from Rigid Operational Structures
The call center industry, with moderate asset rigidity (ER03: 3/5) and operating leverage (ER04: 3/5), has capital tied up in declining service lines and outdated infrastructure. Harvesting these operations is essential to free up funds that are otherwise locked in inefficient processes.
Establish a dedicated 'Transformation Fund' using all proceeds from harvested and divested operations, specifically earmarked for AI-driven customer experience platforms and advanced agent upskilling programs to accelerate strategic pivot.
Capitalize on Low Exit Friction for Rapid Divestment
The call center market exhibits low market contestability and exit friction (ER06: 2/5), allowing for relatively quick divestment from unprofitable contracts or assets without incurring significant penalties or structural roadblocks. This provides an opportunity to rapidly shed underperforming units.
Develop and implement a standardized rapid exit protocol for underperforming or non-strategic contracts, leveraging low market exit friction to minimize financial losses and reallocate capital and human resources promptly towards growth areas.
Strategic Overview
A Harvest or Divestment strategy involves systematically reducing investment in, or completely selling off, business units, service lines, or client contracts that are in terminal decline, underperforming, or no longer align with the core strategic direction. For the 'Activities of call centres' industry, this strategy is becoming increasingly critical as the landscape shifts rapidly due to automation, AI, and evolving customer demands. Basic, commoditized inbound customer support, particularly those focused purely on transactional queries, are prime candidates for such strategies, as their demand shrinks (MD01) and 'Sustained Margin Pressure' (MD03) intensifies.
This approach allows call centre providers to reallocate scarce capital and talent from low-margin, high-volume operations to higher-value, more strategic offerings. By exiting services that are increasingly handled by chatbots or self-service channels, companies can free up resources to invest in complex problem-solving, proactive customer success, or specialized technical support where human expertise remains invaluable. This directly addresses the 'Perception as a Cost Center' (ER01) by shifting focus to profit-generating, differentiated services.
Successfully executing a harvest or divestment strategy mitigates risks associated with 'Geopolitical and Economic Volatility' (ER02) by allowing rationalization of offshore centers, and addresses 'Talent Reskilling Imperative' (MD01) by re-deploying and upskilling agents. The goal is to maximize short-term cash flow from declining assets while strategically positioning the organization for future growth in more profitable segments, without being burdened by underperforming legacy operations.
4 strategic insights for this industry
Commoditization of Basic Inbound Services
Many basic inbound customer support services (e.g., password resets, order status checks) are increasingly handled by self-service portals, chatbots, or AI-driven virtual agents. This leads to 'Shrinking Demand for Basic Services' (MD01) and intense 'Pressure on Profit Margins' (MD07), making these services prime candidates for harvesting or divestment.
Underperforming Assets and Geographic Rationalization
Certain offshore centers or specific client portfolios may become unprofitable due to rising labor costs, increased geopolitical risks (ER02), or changes in client demand. These 'underperforming offshore centers' or 'client portfolios' contribute to 'Difficulty in Cost Recovery' (MD03) and should be evaluated for divestment or significant restructuring.
Need for Resource Reallocation and Reskilling
Resources (human and capital) tied up in declining or commoditized services could be better utilized in developing and delivering higher-value services (e.g., complex technical support, customer success management, digital transformation consulting). This aligns with the 'Talent Reskilling Imperative' (MD01) to build a future-ready workforce.
Impact of Regulatory and Compliance Burden
Increasing 'Regulatory and Compliance Complexity' (ER02) and 'High Compliance Costs' (CS04) for certain services or geographies can make them financially unviable. Divesting from such operations can reduce exposure and free up compliance resources.
Prioritized actions for this industry
Conduct a Granular Service Portfolio & Client Profitability Analysis
Identify specific service lines (e.g., tier-1 basic inbound support) and client contracts that consistently generate low margins, are highly susceptible to automation, or have decreasing demand. This data-driven approach ('Sustained Margin Pressure' MD03) is crucial for making informed harvest/divestment decisions.
Develop Phased Exit Strategies for Identified Services/Contracts
Instead of abrupt cessation, create plans for gradual reduction of investment, transitioning customers to self-service, automation, or partner providers. This minimizes 'Client Churn & Retention' (ER05) and reputational damage while maximizing cash extraction from the declining asset. For complete divestment, identify potential buyers or partners.
Reinvest and Reskill Talent into Higher-Value Service Offerings
Actively re-deploy agents from harvested operations into growth areas such as specialized technical support, digital experience management, or customer success roles. Invest in comprehensive training programs ('Talent Reskilling Imperative' MD01) to build new capabilities, mitigating 'High Employee Turnover Costs' (SU02) and 'Skill Gaps' (CS08).
Explore Strategic Partnerships or Acquisitions for Complementary High-Value Services
While divesting low-value assets, concurrently look for opportunities to acquire or partner with companies specializing in advanced analytics, AI-driven CX, or industry-specific complex support. This helps in 'Continuous Innovation & R&D' (ER07) and rapidly building capabilities in strategic growth areas.
From quick wins to long-term transformation
- Identify and cease all new investment into clearly commoditized and low-margin contracts/service lines (e.g., simple inbound information requests).
- Begin internal audit of client profitability to flag lowest-performing accounts for deeper review.
- Initiate discussions with key employees in potentially affected areas to manage expectations and explore internal re-deployment options.
- Pilot automation solutions for identified harvest-candidates to transition customers away from human agents.
- Negotiate partial or full divestment of specific, smaller client contracts or service blocks.
- Develop and launch targeted reskilling programs for agents affected by harvesting/divestment, focusing on skills required for future growth areas.
- Begin market sensing for potential buyers for larger divestment targets.
- Execute major divestitures, including sales of entire business units or offshore facilities, ensuring smooth transitions for clients and employees where applicable.
- Completely re-architect service offerings to focus on high-value, complex, and specialized services, supported by a re-skilled workforce.
- Establish robust governance for continuous portfolio review and future harvest/divestment cycles.
- Shift organizational culture towards continuous innovation and value creation, moving away from 'cost center' mentality.
- Poor communication leading to employee morale issues and high turnover in both divesting and remaining units.
- Underestimating the complexity and cost of unwinding contracts and legal obligations.
- Misjudging the market's decline trajectory, divesting too early or too late.
- Client backlash due to service disruption or perceived abandonment, leading to loss of other business.
- Failure to effectively reallocate freed-up capital and talent into strategic growth areas, resulting in missed opportunities.
Measuring strategic progress
| Metric | Description | Target Benchmark |
|---|---|---|
| Gross Margin by Service Line/Client Contract | Tracks the profitability of individual service offerings and client agreements to identify underperformers. | Achieve minimum target margin for remaining services, improve average margin by 5-10% annually. |
| Cash Flow from Divested Assets | Measures the cash generated from the sale or winding down of harvested assets. | Meet or exceed forecasted cash generation targets from divestments. |
| Revenue Growth in High-Value Services | Tracks the growth rate of services identified as strategic and high-value, demonstrating successful resource reallocation. | Achieve 15-20% annual growth in strategic service lines. |
| Employee Retention Rate (Reskilled Talent) | Measures the percentage of employees from harvested units successfully re-skilled and retained in new roles. | Maintain >85% retention rate for reskilled employees. |
| Customer Churn Rate (Post-Transition) | Monitors customer attrition specifically from affected service lines or after transition to new providers/self-service. | Keep churn rate below 5% for transitioned customers. |
Software to support this strategy
These tools are recommended across the strategic actions above. Each has been matched based on the attributes and challenges relevant to Activities of call centres.
Capsule CRM
10,000+ customers worldwide • Includes Transpond marketing platform
Transpond's email marketing and audience tools support proactive brand communication that builds customer loyalty and reduces churn-driven reputational fragility
Cost-effective CRM for growing teams — manage contacts, track deals and pipeline, build customer relationships, and streamline day-to-day work. Paired with Transpond, a dedicated marketing platform for email campaigns and audience management.
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HubSpot
Free forever plan • 288,700+ customers in 135+ countries
Deal intelligence, win/loss analytics, and pipeline data give sales teams the evidence to defend price with ROI proof rather than discounting reactively against commodity competition
All-in-one CRM and go-to-market platform used by 288,700+ businesses across 135+ countries. Connects marketing, sales, service, content, and operations in one system — free forever plan to start, paid tiers to scale.
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Gusto
$100 bonus for referred businesses • Trusted by 400,000+ businesses
Modern HR, compensation benchmarking, and benefits administration directly addresses the root drivers of workforce turnover and human capital scarcity
All-in-one payroll, benefits, and HR platform for small and medium businesses. Automates payroll processing, tax filing, employee onboarding, benefits administration, and compliance — reducing the administrative burden of employment law for businesses without a dedicated HR function.
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Bitdefender
Free trial available • 500M+ users protected • Gartner Customers' Choice 2025
Threat detection and device-level controls prevent unauthorised access to institutional knowledge, proprietary data, and sensitive IP held on employee machines
Enterprise-grade endpoint protection simplified for small and medium businesses. Multi-layered defence against ransomware, phishing, and fileless attacks — with centralised management across all devices. Gartner Customers' Choice 2025; AV-TEST Best Protection 2025.
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Other strategy analyses for Activities of call centres
Also see: Harvest or Divestment Strategy Framework