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.

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.

Tata and Infosys Make Bigger and Bolder Moves in Latin America

Two of the world’s biggest outsourced services organizations are putting more investment into Latin America, expecting that stable economies, increasingly educated populations and broad language skills will be key factors in long-term growth.

Tata Consultancy Services opened its seventh Latin America site this week in Mexico, while Infosys is also planning to open a services facility in Mexico.

Infosys CEO: Latin America is going to among the fastest growing markets in the world

The provider is said to be looking to acquire providers in the region, especially those that posesses multi-lingual capabilities. Infosys Chief Executive Officer and Managing Director S Gopalakrishnan says that Latin America is expected to be among the fastest growing markets in the world.

Meanwhile, Tata has opened its third global delivery centre in Queretaro, Mexico. The other two Mexican centres are in Mexico City and Guadalajara in Jalisco state.

The opening of the centre in Queretaro represents an important step in the expansion plan of TCS in Latin America. The IT company also expects to hire 500 professionals during the current financial year for its new centre. With over 1,000 people in Mexico alone, TCS plans to take the headcount to 5,000 by 2012.

TCS has a presence in Brazil, Chile, Argentina, Uruguay and Mexico. The total headcount in Latin America is over 5,000. Contribution from Ibero America, which covers Latin America, was 4.7 per cent of the company’s revenue for FY09.

The new delivery centre in Mexico will provide advanced IT services, consultancy, test factory, business process outsourcing, contact center, IT infrastructure solutions, industrial & engineering services and solutions based on exclusive TCS products to existing and potential customers.

Ankur Prakash, director of TCS Mexico, Central America and the Caribbean, said: “This new facility reinforces our global leadership position in Mexico and will help underpin the accelerated growth that we want to sustain in this country and region by delivering certainty of outcomes to our customers.”

TCS established its operations in Mexico in 2003 and already serves more than 30 local clients in addition to international clients across various industries, including telecom, finance, banking, manufacture and retail. (Portions of this story are reprinted from a recent post at The Business Standard.)

DR Special Report: The Leader of the Caribbean Pack Thrives Despite Safety Worries

By Karina E. Cuevas

The Dominican Republic continues to hold the title of the Caribbean’s call center champion, edging out rival Jamaica and earning continuing praise from major in-country providers. With over 65 call centers, it is the second industry in growth after tourism, generating 40 percent of revenue for the overall DR economy. The call center industry has created around 22,000 direct jobs and there are hopes that as many as 100,000 new jobs will be added in the next five years.

Rodolfo Salazar, America’s Marketing Director for Stream, says the DR is a key part of Stream's Nearshore services strategy

In 2008, $7.2 million was driven from services exports and the country attracted $2.8 million in investments.

An Affinity Play
“Our affinity with the United States of America as well as location and telecommunication infrastructure are benefits aside from the low costs for the industry,” says Veronica Ogando, Investment Promotions Specialist for CEI-RD.
CEI-RD helps facilitate tax exempt status for providers, whether or not they are in an industrial park. The National Free Zone Council backs that proposal providing call center businesses access to the benefits of free trade zones, although this does not apply to the textile or manufacturing industries within the zones.

One of the main features that the DR call center industry counts on is the variety of languages available within the country. Its inhabitants have knowledge of Portuguese, French, English and Italian aside from Spanish. Companies like Stream, which happens to be the top provider in the country, credits cultural affinity as a key feature of the DR’s services industry.

“In the Dominican Republic, we credit not only the exceptional quality of the country’s English-speaking talent base, but also its cultural affinity for the U.S., and highly skilled, educated workforce,” says Rodolfo Salazar, America’s Marketing Director for Stream Global Services.

A Streaming Success
Although countries like the Philippines, Costa Rica, Panama, Guatemala, Venezuela and Colombia are the current competition for the DR, geographical positioning continue to be a primary asset. Stream credits it success with its 80 global clients to the proximity of DR to North America, thus enabling clients to travel to DR sites in a minimum amount of time, addressing any business ventures in one day, if needed.

Another company that is benefiting from the advantages of the free trade zones in the DR is Provitel, a growing and relatively new call center company located in DR’s capital Santo Domingo. With a client base of various Fortune 1000 companies, Provitel sites the neutrality of the government and its low investment costs as key factors for doing business in the DR.

“Because of the saturation of the markets in Argentina, Costa Rica and Mexico it has afforded us an increase in cost and efficiency within DR,” says Ramon Rojas, COO for Provitel. But because there are not enough call centers in the country for the market, there is truly no client competition, but yes a competition of resources and we have ideal human resources.”

“Washington Mutual cited safety as their number one concern in their decision not to relocate to the DR…We have found that when US companies see cities like Bogota, Panama City, Managua or even San Jose, they have a greater comfort level” – Doug Meyer, DRCCA

Necessary Feedback
Despite all the positive feedback some of the main outsourcing companies are receiving, it doesn’t seem to satisfy the Dominican Republic Call Center Association (DRCCA) expectations of what the government needs to apply to make it a better business venture.

Medical Tourism: Where Latin America has an Edge over Asia

Cultural familarity and proximity are key advantages Latin America has over Asia

As many as 23 million US citizens will seek medical treatment overseas by the year 2017 (spending close to $80 billion), and as much as 50% of those treatments will take place in Latin America.

Despite President Obama’s remarks today about the need to shore up the US healthcare system, there is little doubt that an increasing number of citizens will take advantage of what is seen as inexpensive and reliable health care services south of the border.

With such a huge upside, it’s no wonder that medical tourism development leaders in Mexico, Costa Rica, Brazil, Argentina, Guatemala, Colombia, Chile, and El Salvador are looking to get a stake in this growing market.

So what does make Latin America more enticing than say perhaps Thailand, or other Asian locations? The Medical Tourism Assocation magazine recently posted an article pitting Latin America against Asia. It explains that while Asia has more population and is more entrenched as a medical tourism leader, Latin America has some great qualities as well.

For example, some of the strongest factors in favor of Latin America include:

• The proximity of most medical tourism destinations are within a reasonable flight from North America.
• Most Latin American countries have a favorable exchange rate which leads to lower cost good and services.
• Many Latin American countries have high rates of fluency in both English and Spanish.
• Latin America has a booming tourism market with many scenic locations and various types of geography (beaches to mountains) to choose from.
• Latin Americans are known for their overall friendly and family-oriented culture (they also boast the hosting of a variety of world-renowned celebrations).
• The wonderful climate in Latin America destinations is deemed to be conducive to recovery.
• Services and procedures such as: rehabilitation, retirement, dental, cancer treatments, low-cost pharmaceuticals, reproductive medicine, and diabetic care.

Drawbacks include:

• Many medical tourists are either ill informed or fearful of travelling to Latin America because of a reputation of violence, corruption, and poverty/disease.
• Lack of standardized quality measurement and quality ranking systems.
• Difficulty in seeking legal remedy in the event of malpractice.
• Major insurance carriers have yet to promote or widely cover medical treatments in Latin America.

Several Latin American countries are trying to serve too wide a swath of the market to maintain a sustainable industry.

The business opportunity includes:

• Large, growing population of Hispanics in North America that are not opposed to traveling to Latin America to receive healthcare.
• History of Americans and Canadians receiving healthcare and other low-cost services in Latin America.
• Possibility of receiving funding by U.S. or Canadian government-sponsored programs.
• Many Americans can travel freely back-and-forth and in some cases without Visas as a result of free trade agreements (e.g., NAFTA, DR-CAFTA, etc.).
• Some governmental initiatives supporting medical tourism.
• Strong willingness of North American firms to reduce healthcare costs.

The article concludes with:

“As these regions continue to mature in their understanding of their strengths and weaknesses, we expect that regions and individual countries will find their ‘niche’ areas in which they excel.  The Asian region has the advantage of greater populations (several billion in the region alone) and a more ‘mature’ medical tourism market.  Whereas, the Latin American market has an advantage of being in close proximity to over 350 million North Americans and a fast growing and fairly youthful Hispanic population.

The major weakness that many countries in both regions currently have, in our humble opinion, is not understanding their core areas of competence and taking advantage of these by differentiating themselves in the market place.  However, both regions have many amazing opportunities to grow their economies in the near term through medical tourism.”

Canada’s Telus Sees “Mandatory” Need for Spanish: Exclusive Interview

Jeff Puritt, president of Telus International, sees further expansion in Nearshore operations sites in Guatemala, El Salvador and Panama

Telus is probably the most bullish company I have yet to run into that has established a comprehensive Nearshore presence. As the second largest telecom carrier in Canada, Telus has made global expansion a key priority under the leadership of CEO Darren Entwistle, who has run the company since 2000. That global growth comes partly in the form of responding to the requirements of customers, who increasingly require call center agents to possess Spanish language skills.

Telus, through its partnership with Transactel, runs three outsourced customer delivery sites in Guatemala, El Salvador and Panama, employing a total of 3,400 agents and support personnel. Customers can be other telecom providers, pizza delivery companies, video game operators or just about any business seeking BPO and outsourced call center services.

Jeff Puritt, president of Telus International, told us why Transactel was selected among over 100 Nearshore service providers, the commitment Telus has to corporate responsibility and why increasing geopolitical stability is great news for the entire Nearshore services industry. To read the interview, click

Is Cuba Ready for a BPO Revolution? We Have Some Answers

Costa Rica Services Summit Coverage (The show is over, but the reporting continues!)

Officials from Cuba's DISAIC (Cristina Espinosa on left and Mayra Barreto) spoke optimistically about Cuba's emerging professional services sector. CRM Central Editor Kirk Laughlin joins them at the Costa Rica Services Summit.

The establishment of Cuba as an Nearshore services base for US corporations is not as outrageous as we might have thought only a year ago. Recent geopolitical shifts (including the recent wrangling over Cuba’s potential OAS membership, detailed here in Time Magazine) are revealing a genuine thaw between the US and Cuba with the potential removal of the “insane” embargo in place since 1960.

While I don’t plan to incite any political firestorms here, there are clearly some valid causes to encourage normalized trade relations with Cuba, cultivate technology transfer and  enable Cuba to slowly develop a viable, long-term export services sector. Why? For the same reasons that apply to many of its Nearshore neighbors – from Panama to Nicaragua and Jamaica and the Dominican Republic – the  inflow of foreign capital into economically distressed nations generally causes good things to happen. Jobs appear where they didn’t before, university students develop career aspirations that are based on realistic opportunity, knowledge workers develop specialized skills and foreign corporations begin to investigate the long-term value of initiating sourcing relationships.

Can this happen in Cuba? It’s not as insane as you might think.

I say that because I sat down with two Cuba government officials at the Costa Rica Services Summit, both of whom work for at DISAIC, a government agency focused on consulting with Cuba business to improve their technology infrastructure, HR, training and technical services.  Sitting down for an interview was Cristina Ramirez Espinosa, marketing communications director  and Mayra Sanchez Barreto, IT consulting director.

What’s Working and What’s Not in Costa Rica

Costa Rica Services Summit Coverage: A Collective Q/A

Over 300 attendees make up this year's Services Summit. What's striking is there is literally no drop off - people are sticking around for the full conference.

The valuable part to blogging from  a buyer/seller (corporate speed dating) event from a business journalist’s perspective is you have deeper conversations with a focused group of individuals. Unlike a conference with on-stage speakers and panels, this type of event seems to enable you to self-direct your own line of inquiry and test market your opinions.

Here are the key topics I’ve been driving and the collective responses (drawn from about two dozen in-depth conversations throughout the summit):

Question: How does Costa Rica rate among other nearshore nations?

Answer: Costa Rica is not a lowest-cost provider. The nation’s services industry continues on an upward trajectory toward higher levels of quality, specialization and niche professional capabilities. The services sector is intentionally designed to be dynamic and the nation’s education system is in fact set up to align to business requirements now and for the next generation of market  demand.

Question: What is the hottest service sector right now?

Answer: CAD and architectural design is getting a lot of attention and the software development sector is filled with companies with a hard-core focus on differentiation and value-added service. Medical tourism, product development and patent and intellectual property research are doing well also.

Question: Costa Rica is increased looked at as a “hub” for nearshore outsourcing. What exactly does that mean?

Answer: Costa Rica is absolutely a shining light in the Nearshore region. The hub concept is starting to take shape in two ways – regional leadership (dozens of service provider companies from around the nearshore region participated in the Service Summit) and through an “aggregator” role – where business flows from client to the Costa Rica provider which manages the project/ relationship and selectively sources to other locations such at Panama and Colombia, based on need.

(My view: There continues to be a need for the Nearshore nations to come together more collectively as a block which will accelerate global awareness of the unique strengths of this region. Many observers expect CAFTA to enable some of that cooperation. Yet, to be honest, there is definitely a sense of competitiveness among the Nearshore Lions (Costa Rica and Mexico) and the Tigers (Jamaica, Colombia, Guatemala, Puerto Rico and Barbados). There is more talk of cooperation than real action.

Question: Where are Costa Rica professional services providers struggling?

Answer:Without question the weakest point for many of the providers in Costa Rica (the vast majority of them have under 50 employees) is sales and marketing. These companies generally  need help developing targeted marketing campaigns and messaging that highlights their core value proposition. Reaching the US buyer is a top issue – since  (at risk of oversimplification) the practice of Nearshore outsourcing is invisible to many US clients. PROCOMER is identified by many providers as a key faciliatator of awareness-building in the buyer audience.

Medical Tourism: Who could argue with bustline enhancements for under 5K?

Hernan Campos, marketing director for Costa Rica Medical, sampled the services of his company when he went for vibro liposuction. Find out what happened in this post.

Costa Rica Services Summit Coverage

When Hernan Campos decided to trim a good bit of fat off  his shoulders, belly and other pats of his body, he knew exactly who to turn to. (BTW, I checked with Hernan and he gave me full permission to share his story.) Hernan shed about 35 pounds in one treatment, provided by Costa Rica Medical, a San Jose-based, medical services organization that provides a wide range of cosmetic surgery and other popular procedures not generally covered by US insurance carriers. Hernan underwent a new, more advanced procedure called Vibroliposuction, a treatment that has not been approved yet by the FDA for usage in the United States.

Read more to find out how things went… .

Blogging Live: Costa Rica Services Summit

Hotel San Jose Palacio is the site of the Costa Rica Services Summit, starting today. (Post script: Internet connectivity unfortunately has been a nightmare throughout the conference. We are confident PROCOMER will choose a different venue for the 2010 Services Summit.)

SAN JOSE, Costa Rica —  Over 300 attendees from across the Americas and Europe are here this morning, and for the next two days, to strike up business relationships with Costa Rica service providers in four key sectors: health/ medical tourism; engineering and design; entertainment and media and IT and software development. Two Costa Rica economic development agencies – CAMTIC and PROCOMER – organized the event.

The event is largely organized around the increasingly popular corporate matchmaking process, where buyers (over 100 are here) meet the service providers in the various sectors.

Costa Rica has established itself as an early pioneer in outsourcing services and its maturation has positioned the country to go after niche, value-added services. I will be meeting with over a dozen service providers in IT and medical tourism and will follow up with more posts.

For further data and details on the Costa Rica services market – following this post.

CAD and graphic design a specialty for emerging Guatemala Firm

Mario Espana is the managing director of CADIS, a Guatemala City-based services firm.

Nearshore services involving product development, R and D and project support are definitely on the rise. While there remain concerns that the Nearshore region – especially Central America – risks being limited to call center and customer support services, we continue to see important signs of growth in value-added business support operations which – in our view – must define the next phase  of expansion for the Nearshore community.
Mario Espana is the managing director of CADIS, a Guatemala City-based operation providing graphic design for sales materials, CAD design for architectural projects, web design and other services. Espana views human capital as one of the primary attractions of the Guatemala services sector. In an interview with the Examiner (an online news journal), Espana points to the emergence of a qualified and eager workforce as a key reason why CADIS located here.
He points out:

• Guatemala has the largest population in Central America, of which more than 50% of the people are under the age of 25.
• There is a strong trajectory of outsourcing companies in different industries: from apparel to call centers to back office services.
• Guatemala also has the largest college student population in the region, and both government and private sector are investing in new industry oriented training facilities and programs.
• A new $10 million IT training facility has recently opened, which was established to house call center and BPO incubators, CAD and web design labs, and – in partnership with Studio C – a state of the art 3D animation studio.