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Nearshore Americas to launch in September!

NA_logo_4C_SMI’m excited to announce the launch of Nearshore Americas in September. The site will the first truly independent news and commentary online resource for the emerging nearshore community. (This is the first public viewing of our new logo by the way – the three sweeping elements are meant to reflect North, Central and South America working as one.)

We are launching the media brand to meet a strong hunger for relevant and deep analysis of how to develop profitable, long-lasting partnerships in Latin America and the Caribbean. We will have much more to tell you in September, including launch of a regular newsletter, contributions from outsourcing experts, buyer case studies, live blogging and much more! Response to our current brand – Caribbean CRM Central – has been overwhelmingly positive. We expect to play a part in helping the Nearshore community establish itself more visibly on the world BPO stage.

Meet Nearshore Americas at the SSON Conference in Chicago

eventlogoThe North American Shared Services and Outsourcing Summit is coming to Chicago, from Sept. 28-Oct. 1 and I’ll be there blogging live (for our new brand Nearshore Americas) and talking to customers of Nearshore outsourced services. Event organizers have done a great job landing high quality customer speakers – including executives from Wal-Mart, Cigna, Kraft Foods and Hyatt. I will be tuning in specifically to sessions relevant to companies who continue to try to navigate in the outsourcing universe, including:

- Innovative pricing models and contracting

- Building a world class HR shared services function

- Getting your organization ready for BPO

There will also be a session specifically dedicated to emerging outsourcing regions, particularly Latin America.

If you’re going to be in Chicago for the event, let me know -  let’s connect:

Is Disaster About to Strike India Outsourcers?

Forrester Research came out with a research piece this week, titled “Will your Offshore Provider Survive The Recession? that asks BPO clients to take a cold, hard look at the health of India-based providers.

The Forrester researcher, Sudin Apte, paints a pretty grim picture of the India BPO sector citing that major providers are ill-equipped to handle a perfect storm of diminished demand, picky clients wanting better deals and anti-outsourcing rhetoric from President Barack Obama.

The researcher says: “Indian providers’ limited preparedness to fight the recession poses a risk for clients. While in the short term sourcing professionals will find it attractive to obtain lower rates, vendor viability is challenged in the  long run — putting project delivery and overall client work at risk.”

These are pretty strong words and have major implications for Nearshore providers and US customers. What can providers learn?

Lesson 1: Differentiate yourself and your brand. Part of the problem for many India providers is they are doing too much and have lost sight of their core specializations.

Lesson 2: Build credibility through service excellence. The outsourcing business is very much a long-term gain proposition. It remains essential that providers consider their delivery value through continuous engagement and committing to invest in competency areas.

Lesson 3: Be honest. Say No. Part of the advantage of working in the Nearshore region, is the sharing of similar cultures. For that reason, the Western Hemisphere is probably better known for its ability to be “professionally blunt” when necessary to get the point across. This is an advantage for providers who are working with clients who are used to receiving “push back.” Being tactfully frank when necessary is something that customers will respect you for.

Lesson 4: Offer new methods of engagement. This point – courtesy of Forrester – is important since providers need to demonstrate that they are innovating in the right areas and looking at ways to improve the delivery of service, through human capital efficiencies, technology improvements or other creative models.

Is the India outsource industry about to collapse? Absolutely not.

But when major research firms like Forrester talk about anticipating bankruptcies – it’s a wake up call I would pay attention to.

Forrester advice to US clients working in India: “Rather than wait for a provider to go bankrupt or be acquired and face work disruption, identifying early symptoms of risk can save a lot of pain.”

Honduras BPO Stays the Course Despite Political Instability

The more I talk to those connected to the Honduras outsourcing sector, the more I flagggggrealize that – frankly – the country might just be a lot better off if former President Manuel Zelaya never comes back to the capital of Tegucigalpa. Even US Secretary of State Hillary Clinton says an attempt by Zelaya to return to Honduras would be “reckless” and would damage attempts for constitutional order.

No hard feeling Mel, but if you and the rest of the political leadership want to truly serve your country then walk away from the righteous arguments and let stability – and commercial growth and opportunity – prevail.

Of course, the political situation in Honduras is not that simple. But what is encouraging is that despite the past several weeks of negotiations and high-level wrangling, the country’s emerging BPO industry is holding itself together nicely.

First, it is critically important to note that the cooler heads in such situations are often business people and investors who see well beyond the political rhetoric, knowing that this too shall pass. Companies preparing to establish or expand operations in Honduras include the giant food and agricultural corporation Cargill, the globally renowned marketing and ad agency McCann Ericsson, and Netsol, a global provider of  business services with branches around the world.  This encouraging news was relayed to me by Ruben Sorto, Corporate Marketing and New Projects Director at Grupo Karims, which is establishing several world-class office centers, including the Altia Business Park project near San Pedro Sula. (Check out the virtual tour here.) “The project is right on track and within the scheduled program,” says Sorto. “We will finish the first tower by December and we expect to have everything up and running in the first quarter of 2010.”Sorto says that his firm has rented about 70% of the first tower (14 floors, each floor with 11,000 sq. feet) to corporate tenants.  

Ruben Sorto, left, of Grupo Karims joins Carolina Pascua (far right)  from FIDE (the Honduran Investment Agency) and an unidentified executive during a recent meeting in Honduras.

Ruben Sorto, left, of Grupo Karims joins Carolina Pascua (far right) from FIDE (the Honduran Investment Agency) and an unidentified executive during a recent meeting in Honduras.

Honduran-based business leaders are continuing to come out publicly in support of Zelaya’s ouster: “We’re here to support the brave actions of the new government, said Santiago Ruiz, president of the Agriculture Association of Honduras.

While some might argue that Zelaya’s strength was in promoting Honduras as a public relations pitch man, the reality is – upon reflection – that he appeared to quite keen to establish his own home made brand of continuismo, where he would defy the constitution and hold on to power as long as possible.

As we’ve said in this blog before, Honduras has a great upside in terms of outsourced services. We just hope that same sense of patience and focus that helps create sound businesses begins to form the foundational approach of the national government level.

Invest in Guatemala takes a huge cut in staff

Invest in Guatemala (IIG), the economic development agency based in Guatemala guatmapCity, recently lost 12 of 15 staff members in a sweeping layoff that has many in the local outsourcing industry wondering: What is the government thinking?

The agency is a key catalyst in promoting the BPO/outsourcing sector in Guatemala, and also helps attract investment into other industries such as agriculture, tourism, energy and manufacturing.

The news is a big shock to many who have come to recognize the Guatemala government as having an enlightened approach to attracting foreign investment.  IIG staff are charged with facilitating discussions between local service providers in the BPO sector and foreign clients. Most of the clients are from the US, and those formative relationships – cultivated by IIG – are built oftentimes on trust and continuity.

There is nothing more alarming for an foreign investor to learn about sudden shifts in strategy. We will try to find out more about the issues that triggered this sudden change – but will also invite readers to offer their own opinions.

The Guatemala economy is not enduring the same pain as some neighboring countries – which makes the cut even harder to understand. Just announced figures from the United Nations Latin American and Caribbean Economic Commission indicate the Guatemala economy will shrink by just 1% in 2009.  (Costa Rica, by comparision is enduring a 3% decline).  The overall Latin American region will slow by 1.7%, with Mexico facing a sizable 7% contraction.

The region is expected to get back on a growth track in 2010 – with economies expanding by 3% next year on average.

How much will the losses at IIG impact the outlook for the local BPO economy?

Colombia Shows Signs of Becoming a Major Outsourcing Hub; Officials Condemn “Risky” Label

By Karina E. Cuevas

Bogota employs over 30,000 people in the contact center industry

Bogota employs over 30,000 people in the contact center industry

Plenty of heads shook with dismay across Latin America, and particularly in Colombia, when Bogota was labeled as the riskiest outsourcing destination in the world for 2009, according to publishers of the Black Book on Outsourcing.

Lots of rankings come out annually about outsourcing providers, specialty areas, regions and cities – but this particular announcement seemed to be so at odds with reality that it triggered a slew of condemnations across the Internet and raised serious questions about the methods used by authors Scott Wilson and Doug Brown. (For further opinion, see Nearshore Americas’ reaction here.)

Modern City on the Rise

A city that generates over $250 million annually in the call center/outsourcing industry can hardly be called a dangerous investment option.  “It [Bogota] has a big and modern economy with over 500,000 college students, a major international airport and the advantage of moving more cargo in Latin America [than any other country],” says Vladimir Ramirez, Managing Director of International Development Group, a management consulting firm with operations in Colombia, New York and Chicago.  “It was number one in foreign investments last year (in LATAM) making it the first port of entry in Latin America and having both Colombian and international Spanish call centers located in Bogota.”

With facts like these, it’s hard to believe the negative comments on Bogota, but Black Book of Outsourcing doesn’t stop there. It places Bogota under the radar as a dirty and polluted city with an immature legal system.  When contact about the report, authors Scott Wilson and Doug Brown did not respond to questions.

“Many people know very little about Latin America and nothing about Colombia, so I don’t know if those people have ever been here or where they get their data,” says Ramirez. “Colombia, within its political context, has never had a coup d’état, it has only entered in a recession once at the end of the last century and from a public order point of view it is no more corrupt than India, Indonesia and other countries in Latin America.”

Teleaccion: Training Plays a Key Role

Colombia counts on the expertise of a consulting and training company, unique to Latin America, called Teleaccion.

  • It’s a 21-employee institution specialized in improving technology and BPO management within the country and nine other nations around Latin America.
  • It has focused on three primary countries of growth for the call center market, including Colombia, Peru and Venezuela.
  • “We have trained around 23,000 people within 157 contact centers in Latin America,” says Patricia Alzate, General Manager of Teleaccion. “We work for Latin American reality, not for American or European cultures. Our method is a practical and simple one that has showed great results.”

According to Ramirez, Colombia is a market waiting to be discovered by the international community.  Currently there are around 120,000 employees within the call center industry.  The largest call centers are located in Bogota which employs around 30,000 people. The country, with seven distinct regions, offers over 12 cities in which to base a company.  In five years, the call center/outsourcing industry is expected to generate $2.5 billion in revenue for the country.
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Q/A Capgemini’s Steve Rudderham: The Nearshore Splashes into a New Era

I met Steve Rudderham in Guatemala City a few months ago at the IAOP chapter meeting and was immediately struck by his vision for driving higher performing outsourcing relationships and how Nearshore providers have a huge opportunity to capture a bigger share of the global exported services marketplace. We recently checked in with Steve who just recently joined Capgemini as vice president of  client engagement for the Americas. In the interview we talk about critical issues facing the sector including Life Beyond Call Centers, Governments’ Role in Driving BPO activities, the Key Advantages of the Nearshore Customer Relationship, Safety and Risk issues, Building an Active Community of Nearshore Professionals and Capgemini’s Leadership Role in the Region.

Question: Steve, at the recent IAOP Central America meeting in Guatemala you called on Central America outsourcing service providers to think more about higher value services and that “there is more to life than call centers.” What risk do these providers face and where should they be headed?

Steve Rudderham recently left his position at Genpact and is now a vice president at Capgemini's Latin American operations.

Steve Rudderham recently left his position at Genpact and is now a vice president at Capgemini's Americas operations.

I wanted to encourage local providers to look beyond the capabilities of Call Centers – that is what India, Europe and now China have done well. It becomes an iterative process where people see career growth in a company beyond answering the telephone, and stay with that provider, and in turn that allows the providers to demonstrate a stable workforce which then allows them to market more services, and hence more career growth for individuals and the community. Without these value added services, the outsourcing economy for a particular will quickly flatten out in terms of growth and development.

Capgemini Latin America vitals:

Total employees in Latin America  – Approximately 1,000

Locations: Guatemala, Santiago, Buenos Aires, Sao Paulo (San Salvador and Xela)

Services: F&A – O2C, R2R, P2P, Customer Care & Intelligence

Languages: Spanish, English and Portuguese

Question: In looking beyond call centers, what higher-value services can Nearshore services providers move toward and what human capital capabilities will they require?
There has been an increase in demand within the F&A Services sector for Nearshore alternatives – particularly in Accounts Payable and Accounts receivable processes. Once the clients are comfortable with these processes staying Nearshore, it opens up the opportunity for more complex work like General Accounting, General Ledger and FP&A work, so long as the country can support this demand with the resources. Supply Chain and procurement is another growing vertical that Latin America countries should look to take advantage.

Question: Tell us about your new role at Capgemini.

I have recently moved from Business Leader of Genpact’s Latin America operations to Capgemini as a Vice President for Client Engagement in the Americas. In this role, I will be leading the engagement for several key clients in the Americas and ensuring that service delivery is exceeding customer expectations.  I am looking forward to the challenge and excited about working within Capgemini as they expand their Americas footprint.

Question: What has the economic crisis done to impact the way Capgemini supports US clients seeking support in Nearshore markets?
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Poll: Will the ouster of Zelaya hurt the growing BPO industry of Honduras… What’s your opinion?

Honduras Looks to Call Centers and Strong Bilingual Abilities to Grow Outsourcing

So far, 2009 looks like a good year for the emerging Honduras BPO community.

The first tenants at Altia business park are planning to move into the state-of-the-art facility in September.

The first tenants at Altia business park are planning to move into the state-of-the-art facility in September.

Worldwide outsourcing provider ACS recently announced plans to locate a call center near San Pedro Sula and operators of several industrial parks are helping make the case to invest in Honduras – a  country that is becoming well-known for strong English language skills. There are well over 400 English language schools operating in Honduras.  In fact, in a story that came out today in the Honduras publication “La Prensa” (click on this link for the Googlized English translation,) the author claims that Honduras has more bilingual speakers per capita than any other Central American nation.  (Although Belize is probably the Central American country to have the most bilingual speakers – I invite others to make their points in the topic.  Friends in Costa Rica or Guatemala, any comments?) To view the LaPresna story in the original Spanish version, click here.

The story notes that Altia Business Park is one of the leaders in trying to attract outsourcing operations, based on tax incentives and economically priced telecom services.

Another important player is Gruppo Karims, a worldwide organization which invests in industrial real estate, textiles and tourism. The company has operations in Pakistan, Mexico and Hoduras, and offices in Guatemala, China, Dominican Republic and the USA. Karims operates a large industrial facility called Green Valley Industrial Park, considered one of the largest and most technically advanced facilities in the entire Nearshore region.

Finally, there continue to be plans for Honduras to host a Central America chapter meeting of the IAOP sometime before the end of the year. We will provide updates at Caribbean CRM Central when more news is announced by Chair Chris Disher.


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