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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Opinion: Harsh Criticism of Bogota is Out of Line

The hit on Bogota as the “Riskiest Place on Earth for Outsourcing” is a huge reminder of the vast amount of ignorance that exists both within the outsourcing industry and beyond about doing business in Latin America. I personally contacted “Black Book” author Scott Wilson two weeks ago to pursue details on his research methods and he initially was responsive. Continue reading

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.

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.

images.tataThe 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.)