2009 Services Summit: A first hand look at Guatemala’s talent pool

For those US companies who want to know more about the advantages of partnering with Guatemala outsourcing providers, a good place to learn more is to attend the upcoming Services Summit, running from Sept. 10-12 in Guatemala City.

The event will be organized under a corporate matchmaking format, allowing buyers and sellers to spend quality, one-on-one time together. This is a second annual event, sponsored by the Guatemala Exporters Association. Sessions will be organized around these key topic areas:

• Sustainable Tourism
• Health & Wellness Tourism
• Laboratory Services
• Software Development Solutions
• Contact Centers & BPO´s

To register, just visit this site.

Honduras BPO Stays the Course Despite Political Instability

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.  

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.

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.)

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.

Mexico’s BPO Sector Surges 25%; Soars Past $3 billion

Mexico’s BPO sector showed no signs of slowing down in 2008, according to a new study by AT Kearney,  recently reported in this post on the “dramatic shifts” in global outsourcing. The BPO sector in Mexico grew at a rate of 25% last year, moving past the $3 billion mark and placing the country at 11th place in the global rankings of national outsourcing destinations.

BNAmericas takes a closer look at the factors underlying Mexico strong BPO track record here. Signs point to a bright future, largely because of Mexico’s strong reputation as a breeding ground for skilled workers.

ICT Group is Hot on Latin America and Sees More Investment

ICT operates centers in Costa Rica, Mexico and Argentina

ICT Group (which employs about 1,700 workers in Costa Rica, Mexico and Argentina) is yet another global proponent of Latin America outsourcing based on some remarks senior executives made on Wednesday about the company’s outlook and why centers in Latin America will play a bigger support role for clients. The company, based in Newtown, PA, brought in close to a half-billion in revenue last year and-  like many in the BPO provider community – the firm is trying to leverage its higher margin offshore operations. Some highlights of the ICT analyst call (which is available in full text by clicking here):

• Latin American operations provide for alternative offshore capacity for North American and European clients.
• Companies are increasingly looking to outsource more of their non-core functions to reduce cost and they continue to prefer lower cost offshore solutions. Increasingly, they are looking for a second offshore geography particularly Latin America, so as not to put all their eggs in the Asian basket.
• Latin American expansion: It’s  earmarked for international development.

IBM Takes on Unilever HR Functions in Latin America; Costa Rica Benefits

IBM’s investment in BPO operations in Latin America continue to payoff with the recent announcement that Unilever will rely on IBM to handle HR functions for its workers in Brazil, Mexico and Chile. Analyst see the move as further indication that large companies are content with splitting up outsourcing functions based on the specializations of providers.

The deal signals another positive sign for Costa Rica, where one of IBM’s near shore BPO hubs is based. Most recent estimates are that close to 40,000 people work in Costa Rica’s call center and IT support industries.

The deal extends an existing contract where IBM provides payroll, benefits administration, employee data management and contact center services for Unilever’s employees.

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

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

  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.