The Guatemala Story: Will Big Tech and ITO Define the Next Wave?

During last week’s  IAOP Central America conference, I had the unique pleasure to spend some time with Ingrid Jacobs, a high energy and enthusiastic champion of near shore outsourcing in Guatemala. She is a senior advisor in the government-supported Invest in Guatemala agency.

Ingrid Jacobs is a senior advisor at Invest in Guatemala

Ingrid Jacobs is a senior advisor at Invest in Guatemala

Ingrid played a major role in driving the success of the  conference  – pulling together logistics, orchestrating sponsors and driving registration – all in a span of about six weeks.

Ingrid reports that:

  • The number of BPO employee in Guatemala has roughly doubled in the last 6 months, rising to 12,000 FTEs.
  • The government is increasingly focused on bi-lingual education, both in near term and long term.
  • Attracting firms seeking support for ITO functions is becoming a major initiative for Guatemala.

No doubt Guatemala’s leadership sees the advantages of ITO and KPO partnerships — higher service and value delivery to clients, the creation of more vertically-oriented career paths and the potential to become a hub of ICT support throughout the region.

Word is that both IBM and HP have existing near shore operations in Guatemala City.* (see note below)

Another great contact at Invest in Guatemala is Luisa Ybarra. Both Luisa and Ingrid are exceptionally helpful and can answer many of the important questions firms might have about setting up ops in Guatemala. The English-version of the Invest in Guatemala website can be found here.

Editorial Note: We will continue to work with captive outsourcing companies, BPO providers and national investment agencies to shed light on the real impact near shore outsourcing is having in producing greater value to client  organizations. Our intention is not to expose companies not interested in getting exposure – rather it is our belief that near shore outsourcing carries with it a wide range of positive impacts: from creating social and economic stability in near shore nations to spurring goodwill and friendships across borders to providing powerful innovative tools to sponsoring clients.  Continue to send leads and ideas to me: kirk@nextcoastmedia.com Thanks!

Smile for the Camera at IAOP Central America!

IAOP: As India Wanes, Does Central America Become a New BPO Hub?

I kept hearing it throughout the IAOP Central America chapter meeting this week in Guatemala City:

India is reaching a BPO and KPO saturation point. Companies want more options but they want the same kind of process discipline that originally put India on the map. Is Central America ready to fill those big shoes?

qqqqqqqqqqqqqqqqqqqqqqqqqqqLori Blackman, president of DNL Global and a key behind the scenes organizer of the event, made a great point when she insisted the greater Latin America region has to take a close look at itself and decide what it can do better than anyone else. As a result, I kept asking my new provider friends: What makes you different? Beyond building call center operations, what’s the long term value play for your operation? Lori says it’s the natural ability to sell and smoothly engage with people which makes for promising opportunities.

I agree – but to be honest – industry leaders are definitely not there yet in terms of saying “our most precious resource are agents who have a natural proclivity to sell, or upsell.” Mario Lopez, a director with Transactel, pointed out that the region has to walk before it runs.

As far as filling the shoes of India, it’s safe to say that Central America has some room to grow. Standards of organizational process (a theme hit hard by former BP global CIO Don Althoff of British Petroleum which I will blog separately about), where companies and nations get on the Six Sigma and ITIL bandwagon, is not exactly a competency most regional providers are touting.

The “good news” as Stephan Manning, an Offshoring Research Associate from Duke University, pointed out during his presentation: Latin America is rising to become a top destination for call center business, in part because of Spanish language strengths. Demand for administrative support and BPO work, as well as product development (a theme we heard about repeatedly) are all up.

The flipside: There is a nasty race to the bottom in the price-is-everything world of call center sourcing. Commoditization is a very real concern and Manning – as well as others – stressed that providers need to take serious steps toward building a roadmap to higher value, and higher margin services, like KPO. My belief is KPO capabilities will begin to show up more and more and it will be introduced by the major, global players already beginning to build a beachhead in the region. The upside is huge – as long as providers commit to playing for the long haul.

IAOP: Where are the Caribbean Players?

It’s a shame we didn’t see a Caribbean presence at this week’s IAOP meeting. The Caribbean region does not currently have its own IAOP chapter, but IAOP chairman Michael Corbett told me it’s an issue that the association’s leadership is looking at. caribbeanmap0000000000000000000000000Whether the Caribbean outsource community joins the Central America group, or goes out on its own, is an open question.
One thing is for sure: The networking, spirit of collaboration and organizational best practices were what made the IAOP meeting in Guatemala so successful. I am confident the Caribbean can develop a similar community to help the islands’ outsourcers speak as one and help better define the unique value of the region. If you’re active in Caribbean outsourcing and want to get involved in potential discussions around forming a group, drop me a line: kirk@nextcoastmedia.com

IAOP: Quick Country Snapshots from the Show Floor

Cuba: A report is floating around that over 60,000 well-trained IT professionals are standing by ready to take on BPO work in a country that is quickly shedding its pariah status. Anybody up for planning a BPO conference in Havana?

Honduras: Some savvy folks from this emerging nation are making a strong case for cooking up some deals based on available capacity and its strong English-language training. Country leaders  must continue to define their asset base and bring out the more differentiated characteristics of this promising nation. Searching for answers on this market? Gabriela Calix of Green Valley Industrial Park is a great resource.

Colombia: Wow, what an interesting upside. Over 45 million people and a very compelling combination of favorable factors including a far safer society than in years past,  new telecom infrastructure and tax incentives. Vladimir Ramirez and Pedro Quintanilla both of IGDC. Inc. are helping bring more recognition to the country and plans are underway for a 2010 IAOP chapter meeting in Colombia.

Nicaragua: What can you say about a country which has done a good job so far executing its BPO strategy? Sitel apparently still loves the country, having recently doubled its workforce to support (reportedly) Virgin Mobile.

Full House at IAOP Central America Chapter Event

Vista Real Resort is the site of IAOP chapter meeting

Vista Real Resort is the site of IAOP chapter meeting

We are reporting live today from Guatemala City where a group of nearly 100 outsourcing providers from across Latin America, private equity investors, national economic developing agencies and North American client organizations are joining the second chapter meeting of the International Association of Outsourcing Professionals.

Chris Disher, of Chris Disher and Associates and former Booz Allen global vice president, is conference chair. Sponsors include ACC, Genpact, Modulares PB, Stratasoft and Transactel.

Conference Vibe: Great networking and very positive outlook for regional growth. The big issues on the table include: raising performance standards, cultivating English-language skills, coping with growth and scaling issues and the special sauce which differentiates Latin America from the rest of the world.

IAOP: Corbett Sees Outsourcing Staying on Course Despite Obama Rhetoric

Michael  Corbett, chairman of IAOP, offered rich, pointed remarks about the current state of global sourcing this morning at the IAOP meeting, touching on the global economic crisis and its impact on outsourcing, Peter Drucker’s prescient views on outsourcing and the recent political debate about working with offshore organizations.  Some of his key insights:

Current Economic Crisis:

  • Corbett stresses the 'one nervous system' concept in linking providers with client partners

    Corbett stresses the 'one nervous system' concept in linking providers with client partners

    The best quote of the day so far: “Is the economic crisis an opportunity to strength the core or allow outsourcing  to be swept up under  the tyranny of immediacy of getting through the current month or current quarter?”

  • Client businesses are faced with a fundamental choice on how they look at current and future outsourcing relationships. “Am I going to view the relationship as a vendor-customer relationship, leading to pressure on lower cost?  Or is this a real opportunity to redesign and rethink the relationship in order to  produce more value for everyone?
  • In Corbett’s view: Executives with a  broad sourcing vision are the ones looking to seize the   opportunity to strengthen relationships in this time of economic turmoil.
  • Very few clients have embraced outsourcing as a profession. They tend to bring in outside executives to oversee operations.  Very few clients have incentives tied to outsourcing performance by the actual people handling the functions.
  • On the political debates about outsourcing: There’s no doubt you’re going to have the rhetoric.  But at the end of the day, from a real regulation standpoint that will tie the hands of business? I don’t see that happening.

  • Recalling Drucker: Corbett referenced an article written by Peter Drucker back in 1988 which famously asked companies to “sell the mailroom.” Although not called outsourcing at the time, the premise for taking business functions and turning them over to partners who specialize in the actual function leads to good social policy as advancement is oriented toward skills and competency-based performance.

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