I’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.
The 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: firstname.lastname@example.org
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.”
The more I talk to those connected to the Honduras outsourcing sector, the more I realize 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.
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 (IIG), the economic development agency based in Guatemala City, 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?
By Karina E. Cuevas
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.
Filed under: Nearshore Outsourcing | Tagged: Black Book on Outsourcing, Bogota outsourcing, colombia outsourcing, Invest in Bogota, Mauricio Velasquez, Teleaccion, Teledatos, Vladimir Ramirez | Leave a comment »