Latin America: A New Land of Opportunity for Outsourcing


Latin America: A New Land of Opportunity for Outsourcing

By TMCnet Special Guest
Raul Navarro , general manager for Sitel�s Latin America division
  |  December 11, 2012

This article originally appeared in the Nov. 2012 issue of CUSTOMER

When most people think about outsourcing, the two prominent locations that come to mind are India and the Philippines. India’s BPO sector continues to grow at an astounding rate, with more than 2.77 million employed in the country overall, only to be outdone by the new leader in outsourcing: The Philippines. However, experts have been looking toward Latin America as the new land of opportunity. Countries such as Nicaragua Panama, Colombia and Brazil are positioned as the future venue for BPO. With the combined factors of proximity and cultural affinity to the United States, there doesn’t appear to be a better location for BPO practices.

Just south of the border of Honduras lies the country of Nicaragua. With roughly 3 percent of the country’s GDP coming from BPO practices, the nation’s broader outsourcing space still has room to grow. What most people don’t recognize, however, is that Nicaragua is the No. 1 English-speaking country in all of Latin America. This is an important benefit for serving English-speaking customers. Additionally, telecommunications costs are approximately 20-25 percent lower there than costs in many other Latin American outsourcing locations, making Nicaragua a very cost-effective option. Nicaraguan President Daniel Ortega’s policies have been favorable to the outsourcing market, enabling economic growth for the country and business opportunities for companies seeking to do business

Another rising star in the Latin American sector is Panama. Experts refer to this nation as “the new Miami.” The country is known for its strong work/life balance, providing excellent opportunities for call center agents to have successful careers. There is a large pool of skilled professionals with years of experience under their belts, providing a base for top-notch customer care servicing. A recent survey by Gartner (News - Alert) Research included Panama among the top outsourcing countries. According to the annual report, Panama was recognized for its “language skills, cultural compatibility, government support, and political and economic stability.”

The nation of Colombia also provides excellent opportunities in the BPO sector. The once unstable nation has transformed itself into one of the best locations to do business in Latin America. Besides highly favorable wage rates, educated, multilingual and available workforce, robust communications and IT infrastructure, and the highest CAGR for English offshore in the region, one of the most attractive aspects of outsourcing to Colombia is the labor costs. In fact, the cost for bi-lingual employees in Bogota is 15-25 percent lower than in similar locations such as Buenos Aires or Monterrey. The GDP in Colombia also continues at a steady climb, with an annual average of 4 percent growth over the last five years. With improvements in national security, political stability and education, Colombia is developing a high-quality talent pool, which positions it among the leaders in the BPO market.

However, it’s Brazil that is considered the king of outsourcing in Latin America.The nation is known for its unique characteristics that differentiate it from similar BPO locations such as the Philippines and India. According to Gartner Research, "Brazil's economic footprint, combined with the largest domestic IT consumption in Latin America, makes it a natural destination for IT services." Furthermore, there is a minimal time difference with the United States making it a prime location for companies to outsource their services. The key challenge is that while many Central and South American nations boast excellent English written and oral communication skills, Brazil’s numbers on these fronts could be higher; a low level of English skills is hindering Brazil’s ability to reach its full potential as a BPO center beyond the Portuguese, Spanish-speaking support it provides. To increase levels of achievement and retention among current and prospective employees, public and private companies have been providing tailored training in verbal and written communications.

The emergence of Latin America as a critical player on the outsourcing playing field is changing the way the world looks at BPOs. Major industry leaders such as India and the Philippines are no longer the only prominent destinations. With close proximity to the United States, similar cultural tendencies and nearly identical time zones, major companies are now looking nearshore for these outsourcing services. Nations such as Nicaragua, Panama, Colombia and Brazil are up-and-coming superstars in the future of a global services platform.

Raul Navarro is the general manager for Sitel’s Latin America division ( Navarro has more than 20 years of senior management experience in BPO, which includes experience in consumer products, product management, executive sales, and marketing management

Edited by Brooke Neuman
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