By Dan Berthiaume

Everyone seems to have at least one story about a nightmare experience dealing with telephone customer service. The fact that many call center providers are located in countries where language and customs are significantly different from US norms only exacerbates the problem. Some experts recommend that companies outsourcing call center functions attack the problem of poor customer service by focusing more attention on serving the needs of customers. But is that always the best strategy?

Michael D. Brown, a corporate consultant and trainer who specializes in developing professional brands, has a slightly different recommendation. “Step back and take care of the employee first,” Brown says. “They will then take care of the customer. Make the employee number one and the customer number two.”

Brown realizes that his advice to place the frontline employee before the customer amounts to heresy in the eyes of many customer service gurus, but he hastens to explain that this is actually the best way to ensure a top-quality customer experience. “When you look at unfavorable dealings with the end user, there is a rush to judgment to put a band-aid on the situation,” says Brown.

Instead of approaching each individual customer complaint as a separate issue necessitating an on-the-spot fix, Brown says companies should make more effort to understand how the frontline call center employees actually spend their day. “Take a side-by-side walk with your frontline employees,” says Brown. “See what a typical day is like; see what types of calls they’re getting and where the roadblocks are. Then ask, ‘Do I have the right processes in place?’”

Brown says real-time communication technologies such as Skype and FaceTime allow US companies to virtually perform side-by-side walking with call center employees who may be working from distant offshore locations.

After performing side-by-side walking (either in-person or virtual), Brown says companies should then go about “smart tasking” outsourced call center employees. “What do the employees do besides just answering calls?” asks Brown. “To deliver a world-class call center customer experience, look at the sequence of tasks employees perform and see if you can make any changes to enable them to deliver a better customer experience.”

Let Frontline Employees Make it Right

Following smart tasking, Brown says companies should provide outsourced call center employees with what he calls “Make it Right” power, or the ability to solve certain problems on their own. “Often the person answering the call can do nothing other than pass on the call to someone else when there is a problem,” says Brown. The customer becomes even more infuriated when they are passed to person after person.”

Instead, Brown says the employee manual should provide frontline employees specific instructions on how to resolve common issues and that the second person they speak to should have the authority to handle all problems.

“Most customer problems are not rocket science,” comments Brown. “The frontline employees hear the same issues day in, day out. Ask them what they are doing day to day and look for organically developed solutions.” Brown says companies should then compile these solutions into a continually growing “What-If Arsenal” of resolutions to common problems that is built from the bottom-up, guaranteeing employee buy-in.

Brown says is it also important for companies engaged in call center BPO to encourage “bubble up innovation,” or innovative ideas that come from frontline employee brainstorming sessions. “Often we don’t have the answers, but need innovation bubbling up from the bottom,” Brown says. “It gives the frontline employees ownership in the workplace.”

Clued In

Brown says all the steps he recommends to achieve world-class customer service in an outsourced call center will not succeed if everyone involved is not relentlessly focused on the same goal. “Does everyone understand the vision, or are people in different silos?” he asks.

Of course, companies also need to simply follow through and make world-class customer service happen at their outsourced call centers. This includes remaining open to making changes in response to changing needs of customers. “Keep it fresh,” says Brown. “Things will change. Look at what happened to Borders. To take call center customer service to the next level, you need to say enough call centers are giving the industry a bad name, it’s time for us to rise to the top.”

An essential part of making it happen is ensuring frontline employees fully understand what customers expect from products and services. “Too often the call center employees haven’t a clue,” he states. “They must understand how things are made, not necessarily from a technical standpoint but in terms of the promised experience. Often the call center employees don’t know what has been promised to the customer.”

Jamaica’s growing reputation as a top Caribbean destination for investment in Information and Communication Technology (ICT) and other key growth sectors is set to take centre stage on March 1-2, 2012, as the island lays out the red carpet for investors seeking opportunities in the region’s largest English-speaking economy.

The Jamaica Investment Forum 2012, which will be staged at the new Montego Bay Convention Centre, will focus on the business opportunities that exist in ICT, as well as other priority areas such as Tourism, Manufacturing and major privatization and development projects.

The Prime Minister of Jamaica, the Most Hon. Portia Simpson Miller, will head a high profile slate of local and international speakers at the Forum, which is being organized by JAMPRO, the country’s investment promotion agency, in partnership with the Inter-American Development Bank (IDB) and the Compete Caribbean Programme. The opening of the event will feature presentations from Anthony Hylton, the Minister of Industry, Investment and Commerce, and a high-level representative from the IDB.

The sectoral session on ICT will focus on opportunities in Business Process Outsourcing (BPO) and IT Export Services (ITES) and will feature a mix of information and testimonials from expert panellists and existing investors. Among the confirmed speakers for this session are Connie Harvey, EVP, COO, Commercial Solutions, ACS, A Xerox Company; Dr. Harsh Muthal, CEO Tholons Inc.; Ambassador Patrick Casserly, Special Envoy for ICT; and Helena Lawson Brooks, SVP- Specialty Operations, Convergys Corporation. Phillip Vandervoort, Head of Business and Marketing Operations, Microsoft, is scheduled to deliver a presentation during the investment climate plenary.

Participants will have the opportunity to see first-hand some of the select investment projects on specially arranged JAMPRO site visits and private meetings. Prime Minister Simpson Miller will also host a welcome reception at which participants will be able to meet members of the Jamaican Government and senior leaders in the private and public sectors. A special “Jamaica Night” reception will cap off a comprehensive social programme that will offer participants, diverse opportunities for leisure, tours and sightseeing.

Jamaica is home to four of the world’s top 10 outsourcing companies, and currently has over 11,000 full-time agents in the offshore business process outsourcing (BPO) sector. With nearshore access to the United States, a neutral English accent, low attrition rates and high labour force availability among secondary and university graduates, Jamaica continues to offer a very strong value proposition for BPO investors.

Most recently, Jamaica landed a major investment from Convergys Corporation, one of the largest agent-assisted customer service companies in the world. The company is projected to employ nearly 1,000 persons when its first call centre slated for Montego Bay becomes fully staffed in 2012.

The Jamaica Investment Forum will provide potential investors with insightful information pertaining to the Government of Jamaica’s investment policies and incentive regimes; and networking opportunities among existing investors and leaders in the local business community. The Forum has received strong backing from the local business community. Among the many local sponsors are: FLOW/Columbus Communications, LIME, Digicel, Jamaica Public Service Company, and the Bank of Nova Scotia.

Source: The Jamaica Observer

Although mandated studies have found an estimated overall 64 per cent level of “compliance” in the Caricom Single Market and Economy (CSME), the harsh reality is that it is yet to be “fully embraced” by a number of member states.

That, basically, is the assessment of findings in reports submitted to the Georgetown- based Caricom Secretariat with free intra-regional movement of services and the right of establishment identified as the two areas of “major deficiencies” among the five “core regimes” of the CSME.

Additionally, there continues to be disappointment and discomfort with respect to the pace of progress in addressing the old problem of free movement of Caricom nationals with particular concern in relation to advancing the process of free movement of skilled nationals of the 15-member community.

The five “core regimes” of the CSME — the often claimed “flagship project” of Caricom which will mark its 39th year of existence with this coming July’s annual Heads of Government Summit — are the free movement of skills, goods, services and capital, and the right of establishment of businesses to freely operate in member states across the community.

While, at first glance, the approximate 64 per cent “compliance” may bring comfort to some, the real concern for all governments and business sectors anxious for the realisation of substantial progress of the CSME should be an effective process of combined monitoring by them to ensure required compliance.

This does not have to be done publicly — unless really necessary — but quietly with set timeframes with a view to, hopefully, avoid more of the same ad nauseam post-mortem why the CSME seems stuck in the mud while our ears continue to be filled with official rhetoric of our regional “survival together” — against the odds — or “perishing collectively”.

Much criticism is often levelled — and not without relevance — about the foot-dragging politics by governments in steering a committed course in advancing the arrangements for realisation of a seamless regional economy via the CSME.

The reality, however, is that too often the regional private sector, and in particular the so-called “captains of industry” and “enlightened entrepreneurs” escape blame when such blame should be shared.

Caribbean Business Council

A good example, outside of the real and perceived “deficiencies” in the “compliance” level with respect to the CSME could well be the failure by governments and the private sector to make a reality of the long mooted and recognised need for the creation of a Caribbean Business Council (CBC).

Such a mechanism was once vigorously advocated by once very articulate and visionary spokesmen on behalf of the region’s private sector — such as Jamaica’s James Moss-Solomon and Guyana’s Pat Thompson. I have covered regional Heads of Government and ministerial meetings where leaders of governments and the region’s private sector spoke eloquently in favour of establishment of the CBC.

But sadly, while by October 25 last year we were learning of the coming establishment of a Latin America and Caribbean Business Council as an initiative of the Group of Latin American and Caribbean Countries (GRULAC) — an announcement that came via Kuwait — there is yet to be some concrete evidence of regional initiatives within Caricom for the inauguration of the long promised Caribbean Business Council.

Truth is, more than the apparent need for hastening the process for inauguration of the CBC to strengthen government/business partnership for regional development, and consistent with the primary objectives of the CSME, there seems to be an urgent need for a permanent monitoring mechanism on “compliance” with provisions of the Revised Caricom Treaty on which the CSME is anchored.

But it is felt that such a process, which could be done with minor staff adjustments within the Caricom Secretariat, should be approved — perhaps at the coming first Inter-Sessional Meeting of community leaders in Suriname — but should be linked to a sanction requirement on defaults.

Other wider perspectives on the future of Caricom, and specifically realisation of the CSME, include suggestions for new invigorated approaches to deepen intra-regional investment and trade to include Cuba, the Dominican Republic and Central American states such as Costa Rica.

Further, that public-private sector partnerships could be pursued within the scope of a new arrangement for a special window being opened with the Caribbean Development Bank (CDB) and the Eastern Caribbean Central Bank (ECCB) for the blending of grants and concessionary loans along with excessive liquidity available in some countries.

The sectors to be targeted, according to such advocates who are regularly monitoring regional developments, can include maritime transport, food security with increased production of staples like root crops and rice, as well as small livestock (for sheep and goat meat) and tropical agricultural products and cultural services geared for the tourism industry.

By Luke Bujarski

High employee turnover is something that sourcing managers have learned to put up with when offshoring IT and BPO tasks to India. But now the Philippines has also begun showing signs of overheating. Given Latin America’s relatively small labor pools, we worry that the region might follow suit and succumb to the same pressures that have pushed the Philippines to its limits. So far, rampant turnover has not been a major problem with LatAm markets. But just in case, we decided to take another look at some of the details around attrition and other symptoms of hot labor market conditions.

What we found is that while Latin American labor pools are fewer and often smaller, sound management practices at the company level, greater company loyalty, and slower, more organic industry growth have kept attrition rates lower than what has been seen in both India and the Philippines.

What’s Up with the Philippines? 

“BPO firms [in the Philippines] are experiencing difficulty in hiring and retaining “capable employees,” thus, resulting in higher attrition rates and an increase in hiring and retention costs,” noted global consulting firm Tholons in a recent report. Other sources suggest that up to 75 percent of the Philippine people speak good English, so it’s no surprise that the BPO industry (in revenues) has been growing at 20 percent annually. Market research firm XMG Global also expressed concern over the growing “talent problem” in the Philippines – not only with today’s labor force, but also with high dropout rates in the labor pipeline in primary and secondary school. As a result of this and other factors, labor costs are expected to go up by 25-60 percent over the next five years.

Despite these warning signs, the Business Process Outsourcing Association of the Philippines, in a joint report with Everest Research, anticipates the industry to almost double by 2016 to 900,000 employees. For those service providers already battling it out with runaway training and recruitment costs, wage inflation, disrupted project workflows, and inconsistency in service level quality, those projections may be a hard pill to swallow.

LatAm Sensitivity to Demand Pressures 

When it comes to contact centers and BPO, English-speaking labor pools in Latin America are relatively small and hence tend to be more susceptible to demand and supply misalignment. Central American countries are a case in point as is currently being witnessed in Guatemala, where a growing price war for bilingual agents is forcing companies like 24/7 Customer to diversify their coverage base into Nicaragua. Going forward, as even smaller markets like Belize and Honduras grow into the BPO industry, service providers should take care not to over promise and under deliver on total cost and service level agreements. Likewise, government officials should be careful not to ‘over promote’ their regions’ capabilities, without backing up their initiatives with matching training and education dollars.

Concern over employee churn also has a lot to do with the type of business that you’re in. According to Tony Mataya from Think Solutions, on the whole, Mexico’s IT services industry has not seen the type of attrition rates experienced in India. Chris Snyder CIO of Hulcher also said that it has a lot to do with the fact that just like Americans, “Indians don’t want to work the third shift if they don’t have to” – referring to the 12-hour time zone gab between the US and India. This is particularly true when dealing with agile, scrum and other live-time software development methodologies. “We tried agile with India, but turnover got to the point of ridiculousness.” Snyder also noted that they’ve had much better luck in Brazil, although they’ve found it increasingly difficult to retain and recruit talent since signing on with Stefanini Solutions three years ago.

Market Fundamentals: Mexico vs. India vs. the Philippines 

When looking at macro-level data there are a couple of things to be mindful of when analyzing labor markets. Consumer price inflation is perhaps the most indicative of rising wages, since employers typically need to adjust salaries annually in line with overall inflation. Below we see that the cost of living has more than doubled in India over the last five years, while Mexico and the Philippines have seen lower inflation year on year. GDP per capita is clearly much higher in Mexico, which puts a premium on wages. Likewise sheer market size in terms of population emphasizes India’s dominance as an offshore hub to both Mexico and the Philippines.

Attrition Boils Down to Economics, Management, Culture

Personal expectations and the promise of higher wages is what ultimately cause BPO employees to jump ship. However, work culture and company management style also has a lot to do with it. Eric Simonson Director of research at Everest pointed out that “the Indian work mentality is focused more heavily on ‘getting ahead’, rather than subject matter expertise. We’ve seen good things coming out of Poland lately partly because the work culture follows a more artisanal approach focused on mastery and domain expertise.” Mataya from Think Solutions also backed up this claim and mentioned that it is “not uncommon to see BPO workers in India move companies for ten cent raises”.

Second Annual Nearshore Nexus Comes to New York City this April

Nearshore Nexus, the only North America investor conference focused entirely on the Caribbean and Latin America IT and BPO sector, will take place on Thursday April 19, 2012, in New York City.

Nearshore Nexus will feature the best minds in global services to examine the growing role Latin America is playing in delivering quality outsourcing services to businesses across the Americas. The outsourcing sector in Latin America has been growing at over 20 percent per year – noticeably higher than the global average. The theme for the 2012 edition of Nexus is: “Intelligent Analysis of Outsourcing in the Americas.”

“I’m very proud of the fact that we will attract delegates and sponsors from over 15 countries in Latin America. This testifies to the strength of our business and the appeal of this topic,” said Kirk Laughlin, CEO and Founder of Nearshore Americas, the company staging the conference. The event brings together CIOs and IT leaders, global sourcing decision makers, procurement heads and country representatives. Besides analyzing complex ideas and generating stimulating debate, Nexus is also a place to enjoy something different. Musical entertainment will be provided during the event, and multiple networking opportunities are built in.

”The Nearshore outsourcing market is extremely robust,” noted Laughlin, “yet a good percentage of U.S. buy-side sourcing customers continue to lack sufficient knowledge of Latin America to make good business decisions. Our conference is all about accelerating that awareness and generating high-value connections.”

Nearshore Nexus features a list of top tier speakers from organizations such as GE, The McGraw-Hill Companies, Pace Harmon, Pegasus Solutions, UBS, HfS Research, Tata Consultancy Services, Ci&T and A.T. Kearney. Topics range from the current state of outsourcing in Latin America, getting smart about site selection, and how to manage vendors in a multi-vendor, multi-location environment.

Sponsors include Tata Consultancy Services (Diamond); Ci&T (Platinum); BRASSCOM, MexicoIT and Pro Mexico (Gold); Belatrix Software Factory, Common Sense, Invest Pacific, Nearshore Call Center Services, Neoris, ProBarranquilla, VSI Nearshore Outsourcing and Wipro (Premier). Partners include Avasant (Advisory Partner) and HfS Research (Research Partner).

This year’s conference will be held at the elegant Crowne Plaza Times Square Manhattan, which offers a luxurious oasis in the middle of Manhattan’s most vibrant and iconic neighborhood. Nearshore Nexus has secured a special room rate for attendees of $309 per night. This rate expires on March 16, 2012.

Nearshore Nexus is an invitation-only event. Individuals who are outsourcing services decision makers may request an invitation to the conference by sending an email, with your title and company name to invitation@nextcoastmedia.com . After submitting your registration request, your qualification status will be verified for eligibility. Qualified invitees are granted complimentary access to the entire conference. Vendors, service providers, business parks and government/private promotion and investment agencies may obtain access to the conference through sponsorship.

For information about Nearshore Nexus, visit www.nearshorenexus.com or contact the conference office at (516) 277-1108. Nearshore Nexus social communications can be found on Twitter and LinkedIn.

By Reshaad Durgahee

Lima, Peru: Surprisingly emerging.

In the period 2003 through 2010, Europe and Asia were the largest recipient regions of foreign investment projects in shared services and BPO activities, accounting for 46% and 29% respectively. Meanwhile, interest in Latin America has clearly been growing. The number of shared services and BPO foreign investment projects in Latin America rose year on year until 2010, when the total number of projects entering the region decreased by 15%.

However, in terms of jobs created by these investment projects in shared services and BPO, 2010 saw the highest number in the Nearshore region since 2006, increasing by almost 10% over 2009.

After the Asia-Pacific region, Latin America is now seeing the largest-size centers being set up, and indeed, the region continues to be characterized by a number of labor-intensive shared-services projects, with on average 350 announced jobs per center in 2010.

General trends in announced shared services jobs by world region, 2003-2010

Typical destinations for shared-services establishments in Latin America, such as Colombia and Costa Rica, continued to lead the rankings in 2010, representing 22% and 14% of regional shared-services job announcements. Brazil and Argentina – as dominant markets in the region – also continue to attract their share of investments.

Top ranking SSC/BPO destinations in Latin America & the Caribbean by estimated jobs, 2003-2010

However, it is the emergence of newcomers in the rankings, such as Nicaragua and Peru, that piques the interest of the observer of the outsourcing industry. These two countries attracted large-scale investments in shared services, demonstrating the widening of investor confidence across the region. Companies are now seeing the potential of previously untapped labor markets. Countries such as Nicaragua and Peru offer companies that are willing to take risks a first-mover advantage in terms of potentially lower labor costs, lower levels of competition from similar operations, and the opportunity to become the major player in a new market.

This would be in contrast to already well established shared-services locations in the region, which offer a more experienced labor pool and potentially higher-quality level of infrastructure, but are also starting to experience side effects such as increased levels of competition and elevated attrition rates.

The Rise of the Second Tier

In 2010, leading agglomerations in Latin America in terms of job creation through foreign investment in shared services and BPO included Bogota, Lima, San José, Guadalajara, Managua, and Medellin, the first four of which make the Global Top 20 ranking. Examples of new investments include Sitel, which announced 450 jobs at its new contact center in Managua; National Instruments, which has announced the establishment of a shared service center in San José creating 200 jobs in CRM, finance, IT, and sales; and Convergys, which has established a bilingual contact center and back-office support site in Bogota, creating up to 1,000 jobs.

The appearance of Bogota and San José, as now-seasoned shared services destinations comes perhaps as no surprise. The Mexican city of Guadalajara and Colombia’s second city Medellin highlight the potential of such second-tier cities in the region to operate shared services at lower cost than their capital cities, whilst still maintaining suitable operating environments desired by investing companies. Recent investments include West Customer Management’s bilingual contact center in Guadalajara and HP in Medellin.

Function-wise, investment in this sector into Latin America has been focused on contact centers (primarily to serve the local market and Spain, but also increasingly bilingual centers to serve the United States). In addition, in recent years, more and more companies have seen the potential for more value-added shared services operations in the region’s more mature locations, where there are now multiple finance and IT shared services, for example.

Sources of Investment

By far and away the largest source country of foreign investment in shared services operations in Latin America is the United States, which between 2003 and 2010 accounted for more than half of the jobs created in the region in this activity, generating almost 70,000 positions. Although Europe and Asia remain the most popular regions for US companies setting up shared services and BPO operations, Latin America remains a key market, in particular for nearshoring activities due to factors including timezone advantages and natural availability of Spanish language skills.

Between 2003 and 2009 Spanish companies (such as Telefonica and Banco Santander) accounted for about 20% of jobs created in shared services and BPO in the region, solidifying Spain’s position as the second largest investing country in this sector in Latin America.

Top source countries for SSC/BPO foreign investment into Latin America & the Caribbean, 2003-2010

Much has been written on the rise and dominance of India as a destination for shared services and BPO, but it is also interesting to note the rise of India as a source of such activities. Globally, Indian companies created over 15,000 jobs in this sector in 2010, continuing the year-on-year growth witnessed since 2005, accounting for 12% of all jobs created worldwide by foreign investors in this sector. From a Latin American perspective, in 2010, Indian companies such as Wipro, Genpact, and 24/7 Customer created just over 10% of shared services and BPO-related jobs announced by foreign investors in the region – a 60% increase from the previous year. It all represents a move to get closer to customers in a new market, highlighting the rise of India as an outward investor in shared services and BPO activities.

Profusion of Possibilities

Latin America continues to succeed at offering attractive options for companies wishing to establish shared services and BPO activities, as demonstrated by the increasing number of jobs created in the sector from foreign companies in recent years. These options come not only in the form of mature, well-established destinations, but also up-and-coming locations that companies are now finding worth investigating for outsourcing activities.

That is not to say that the mature shared services locations of the region are in decline. On the contrary, mature locations such as Costa Rica, Colombia, Argentina, and Brazil continue to attract their fair share of investment. In today’s economic climate, many companies have become increasingly risk-averse, and are content with opting for tried-and-tested options in the region, where costs may be slightly higher but where there is an availability of highly experienced shared-services profiles to recruit from. On the other hand, emerging Nearshore destinations offer those companies willing to be pioneers the opportunity to tap into new sources of talent and at a lower cost base, resulting in these locations now appearing next to traditional shared services locations in our global rankings.

Latin America’s profusion of location possibilities – both mature and emerging – means that it continues to develop as a strategic region that companies are considering for their shared services and BPO operations. Be it North American firms using the region as a nearshoring solution, Spanish companies cementing their presence in countries with similar linguistic and cultural affinities, or companies from emerging countries such as India wishing to extend their global footprint and gain a foothold in a new market, Latin America is sure to remain “on radar” for companies for the foreseeable future.

Reshaad Durgahee is a Senior Consultant at IBM Global Business Services’ Plant Location International (PLI) division. More analysis of location trends is available by download here.

By Patrick Haller

With 2012 in full-swing, a critical look at what lies ahead for Nearshoring  is in order. With a shaky global economy, and some forecasts calling for a sluggish year in IT and BPO sourcing, this is no time to be complacent.  Whether it’s building solid skill sets, creating sufficient scale, matching client’s expectations, managing expansion, or doing business amidst social change and myopic political theater, providers have a lot to confront. We tapped some of the leading experts in the Nearshoring space for their answer to the burning question: What is the single biggest challenge you think the Nearshore outsourcing industry faces in 2012?

David Rutchik

Partner, Pace Harmon, LLC

For outsourcing buyers, Nearshore vendors are often a better buy because of the typically touted travel, time zone, and language benefits, not necessarily the capabilities provided. As Nearshore economies become stronger and currency arbitrage becomes a challenge, Nearshore outsourcing vendors must build out their skill sets so they can stand on their own. For ITO they need to develop a greater breadth of capabilities, and for BPO they need to improve on both the depth and breadth of capabilities.

Anupam Govil

President/Partner, Avasense Inc./Avasant LLC

Globally, 2012 will be an interesting year for outsourcing as technological (cloud) and economic disruptions will shape the future of the industry. Gauging by recession-affected market sentiments, most companies are unlikely to tinker with their current outsourcing strategy (new contracts, change service locations, etc). This would in turn limit new expansion opportunities at a global level.

From a Nearshore point of view it will be a crucial year. While many providers have established significant presence in Latin America, the second stage of scaling-up looks challenging. The key reason for this is the lack of depth in service delivery maturity. Many companies in the region are finding it challenging to replicate quality, and lack maturity models as well as training programs that have been one of the successes in other offshore destinations.

It is imperative for the region to develop a strong mechanism to ensure constant flow of trained professionals and educate middle management on business aspects of remote service delivery (IT management, maturity models, IT security, client relationships, etc.). Some of the smarter providers have achieved this by cross-pollinating resources between their Nearshore and offshore locations.

Atul Vashistha

Chairman/CEO, Neo Group

I think the biggest challenge is the ability to show a value proposition beyond cost at scale. While one can show resources in many locations lower in cost than the USA, one needs to show capability at scale that can show better outcomes: quality and/or speed and/or greater ability to collaborate.

In the end, it’s about credibility.

Peter Ryan

Lead Analyst, Ovum

In my view, the single largest disruptor in the coming 12 months will be political/economic instability in the region. The year has not gotten off to a good start with Daniel Ortega hosting political pariahs Hugo Chavez and Iran’s Ahmadinejad in Managua for Ortega’s inauguration . The optics of this are beyond terrible in the US. Couple that with a Mexican election that no one knows how it will turn out in a country that is facing monumental problems around violence and uncertainty around Argentina’s economic direction, it is possible that American firms may look to other regions, or even domestically. for service delivery alternatives.

Dawn Tiura Evans

CEO, Sourcing Interests Group

The biggest challenge with Nearshore as a “destination,” in my opinion, is that it is truly “many destinations” with few overlapping commonalities, laws, and capabilities. My hope is that 2012 is the year of increased awareness of the issues facing Nearshore, resulting in the initiation of more government support for infrastructure, education, and legal reform. Until Nearshore can start converging as a single destination, it is going to struggle to gain the traction that India or China is capable of creating.

Eric Simonson

Managing Partner of Research, Everest Group

Nearshore outsourcing will face continued concerns about its security risk profile, which may be compounded by rhetoric from the US election cycle. The political spin will potentially heighten the criticism of Nearshore/offshore jobs. More fundamentally, we may see the US questioning its objectives and commitment to projecting itself beyond its own borders. Growth in Nearshoring is likely to face headwinds as uncertainty awaits around most corners.

Jeffrey Sheehan

Senior Vice President, Site Selection Group

To be fair when discussing Nearshoring, it should always be a two-part question:

1.Challenges/Concerns

2. Benefits/Opportunities

This may seem like a broken record regarding the challenges/concerns for Nearshoring, but this is what I believe:

To begin, many companies have gone beyond having concerns for Nearshoring and thus removing the challenge for the growth in Nearshoring. With that being said, we clearly are still seeing companies, when we discuss the opportunities of Nearshoring, having concerns in making a decision to be the pioneer as “they” see it, in making a jump to Nearshore. For many companies, countries such as the Dominican Republic, Costa Rica, and Guatemala are seen as making progress in building their base with a skilled workforce and such but still are a ways away from being ideal to some groups. Countries such as Bolivia and Venezuela are very touchy due to the political environment. With that being said, we are currently looking at sites for various clients in several Central American countries. For manufacturing groups, the economic numbers are too compelling, especially in Mexico; supply chain relief, speed to market, NAFTA, cultural affinity. The challenge for Mexico is simply safety. This has been compounded for the worse with the ongoing perception/reality of the violence….this is a HUGE challenge. The business benefits are great but the perception/reality of doing business there is one that needs to be changed; many companies will not take that risk.

Juan Manuel Gonzalez

Research Manager, Argentina Office & Enterprise Communications Industry Manager,

Frost & Sullivan

I think during 2012 the big challenge that Nearshore providers will face is the pressure from clients for consistent achievement of key performance indicators while keeping costs down, along with the ability to measure customer satisfaction and first-call resolution.

By Patrick Haller 

Forrester's Lutz Peichert recommends "a holistic view" of a supplier.

Effective vendor management requires more than monitoring service level agreements and keeping a watchful eye on things after the contract has been signed. Buyers can save themselves a lot of grief by examining certain criteria in advance that might not currently be part of their due diligence process.

Many companies seem to be aware of the fact that they need to improve their vendor management processes. In the latest Forrester’s Forrsights Business Decision-Makers Survey, Q4 2010, 48% of the respondents indicated that they will expand their vendor management capabilities.

And 56% plan to have a special innovation council in place within the next 12 months. In most cases, this council will include internal employees and external suppliers and a strong role for the most strategic suppliers within the organization.

The Forrester report suggests a variety of things a vendor manager should to to guarantee a productive, cost-effective relationship with a provider:

• Examining the vendor’s financial stability
• Soliciting feedback from the vendor’s current and former customers
• Acquiring information on the vendor’s wins/losses
• Monitoring the vendor’s product strategy
• Understanding the vendor’s industry/geographic focus
• Gauging the supplier’s flexibility and willingness/ability to be a partner

Nearshore Americas discussed details of the report’s findings with Lutz Peichert, Forrester Research Vice President and Principal Analyst.

NSAM: What is the most important thing that customers should be watchful for when managing vendors? 

Lutz Peichert: In general there are two things to observe: the delivery performance of the vendor and establishing a good relationship with the account manager. Delivery performance is being monitored anyway as part of the vendor management duties. And not only monitoring the performance to ensure “what we get is what we pay for,” but analyzing performance consistency and stability over time gives an indication of the vendor’s stability in the area we source. And a good relationship with the account manager or the account team will provide an information channel that can add a lot of insights when used in the right way. Through this channel a client may receive information about management moves and changes, product strategy changes, and other information.

NSAM: Do you recommended not using new vendors and only those with a track record?

LP: Not at all! For sure new vendors can’t provide a long-standing financial track record. But not using them would sacrifice any innovation, as new vendors fuel the market with innovative ideas and solutions. Financial stability in respect to the research I have published does not mean that we will not utilize “new kids on the block.” We will simply have a closer look at those vendors – i.e., the time between the financial analyses of those vendors would be shorter than the frequency in which we check “established” vendors. When Forrester supports clients in vendor selection activities we propose to ask for a three-year financial track record. But if there is a vendor in the market that is not in business for that period but the solution will help to better do business – we would take this into account when defining the risk mitigation strategy.

NSAM: How many customers should be consulted in order to get a good picture and understanding of the vendor? 

LP: This can vary heavily. In most cases – for the large vendors – the professional network of the sourcing and vendor management (SVM) manager will provide sufficient information through regular meetings. Other than that most vendors provide “user groups” or “customer advisory boards” as well, enabling the SVM professional to get in touch with peer clients of those vendors. Having a good relationship with three to five other clients shall be enough if the other sources are not sufficient. But it is important that those clients are selected by the SVM professional – not by the vendor.

NSAM: How do clients find information on the vendor’s wins and losses? 

LP: SVM professionals will need to tap into various sources. Press, Internet, or analyst firms will provide such information. A good relationship with the account team can be used as a source as well. And the relationships through customer advisory boards, user groups or other professional networks will help.

NSAM: Is it more important to ensure the vendor can provide the products needed by the client as opposed to understanding the product strategy? 

LP: For me as a client it is most important that there is a stable product strategy in place for the goods and services I purchase as my ability to deliver relies on those solutions. If the vendor’s strategy changes, this may have a negative impact on his delivery performance for the products I use. And understanding and monitoring the product strategy will allow a client to discuss any contingency plans with the vendor early enough – if the vendor doesn’t automatically inform the client about upcoming changes.

NSAM: Should it be required that the provider advise the client well in advance of changes in its industry/geographic focus? 

LP: Sure – in an ideal world, yes. But broadly forming strategic relationships is new to the market. When a real relationship is formed – all of those discussions may go away as there is a trust level between both parties. Or all of the mentioned information is provided by the vendor and openly discussed as part of the relationship. But until this level of trust is established, the SVM professional is the responsible person for vendor analysis. And it is his sole job to monitor and manage the external supply.

NSAM: What is reasonable to expect when it comes to supplier flexibility? A client could make too many changes or demands that the vendor is unable or unwilling to comply with. 

LP: Yes – but as said in my research document – it is the holistic view on the vendor’s behavior. And professional SVM managers do know the line between “reasonable” change requests and a demand that will require an addendum to an existing contract or even new contract negotiations. The intent of this measure is not to ask the vendor for all we need for free. And I am not saying we want it all for free. Flexibility can mean as well that the vendor moves first and the client and the vendor will find a mutual agreement after solving the issue. Rather than the vendor asking for a contract before moving at all. The notion of all of this is a level of partnership that needs to be established. And a partnership requires investments from both sides.

It is important to mention that all of the above points have to be seen in a holistic approach. The main reason for performing those activities is to enable clients to get indications if something changes on the vendor side. So a single indicator may not tell a big story – but comparing it with other facts and analyzing the information in relationship will provide a holistic picture. And will enable the client to take actions before something happens. Or at least be warned to react fast if something happens.

Source: The Washington Post

Jamaica’s first female prime minister has officially led her party to a landslide victory in general elections with final results announced Tuesday giving it a two-to-one margin in Parliament.

Portia Simpson Miller’s People’s National Party captured 42 seats in the country’s 63-seat Parliament and the incumbent Jamaica Labor Party just 21, according to official results from Thursday’s elections.

The count includes one more seat for the 66-year-old Simpson Miller’s party than was first announced in the preliminary results.

After a days-long recount, outgoing Commerce Minister Christopher Tufton was found to have lost his seat by just 13 votes, according to Elections Director Orrette Fisher. Officials had initially credited Tufton with a narrow win.

Walloped by the lopsided loss, dazed Jamaica Labor Party leaders are trying to figure out what went wrong. They have been in control of the government since 2007, when they ended a nearly two-decade run of electoral wins by the People’s National Party.

“We’re going to consult and assess the situation in each and every constituency to determine what was the cause of the defeat,” Labor campaign director Karl Samuda said Tuesday.

Samuda has said the party was partly hobbled by lingering questions about ex-Prime Minister Bruce Golding’s handling of a 2009 U.S. extradition request for Jamaican drug kingpin Christopher “Dudus” Coke, the island’s most notorious extralegal figure.

Many Jamaicans were upset that Golding authorized a U.S. firm to lobby Washington to drop the request, only reversing course after nine months. He ordered an offensive to find Coke in his West Kingston stronghold that led to one of the bloodiest episodes in Jamaica’s recent history.

Andrew Holness, who became prime minister two months ago after Golding abruptly stepped down amid anemic public backing, became the new face of the party. The 39-year-old did little to inspire Labor tribalists or swing voters, but there has been no public hand-wringing by party officials over Holness’ leadership after the election loss.

On Tuesday, Samuda said that Labor will now focus on being an effective opposition.

Political analysts say the winning side has no reason to gloat, since only a little more than half of the eligible 1.6 million voters cast ballots.

“Based on the low voter turnout the new government has to get civil society engaged to get more people involved in the process,” said Trevor Munroe, a lecturer in government at the University of the West Indies.

Last week’s electoral win marks a remarkable political comeback for Simpson Miller, who was Jamaica’s first female leader during her year-and-a-half-long first stint in office that ended in 2007. She will be sworn in on Thursday.

By Patrick Haller

San Andres, Colombia is a top vacation spot for Colombians and foreigners from around the world. Long-known for its relaxed vibe, coral reefs, snorkeling and similarities to Jamaica (including a vibrant Rasta culture and worshipful love of Bob Marley), it is perhaps one of the last places one would think of to open a contact center. Yet, that is exactly what Barranquilla, Colombia-based Transcom did a year ago.

So, what happens when the high-demands of a 21st century call center are put on the shoulders of a culture that is more familiar with sandals and sunshine than service-levels and client “sat”?

Although English is the first language for the majority of the native population, the creole accent sounds like a sharper version of their Jamaican ancestors, which can make comprehension a bit  challenging.  Despite the fact that the national vocational training institute, SENA, has established call center training and English classes there, and a new $27 million dollar fiber-optic cable connects the island to mainland Colombia, the 22 square mile island of under 100,000 residents, San Andres is very much in a class by itself as it warms up as a niche destination in Latin America outsourcing.

Transcom started a pilot program wherein they hired people from San Andres to work in their Barranquilla office but they soon realized that there was an untapped opportunity on the island and decided to open a center there. The company took a risk and retrofitted existing office space into a 110-seat call center operation to service a transportation client in the US and Canada.

Since the population is dependent mainly on the tourism trade, which is affected many factors such as economics, island-wide illness and perceived security issues, the unemployment rate on San Andres is higher than in mainland Colombia. But this fact didn’t make the recruitment process, or establishment of a new work culture, any easier. Since the center operates 22 hours non-stop, one of the main challenges Transcom encountered was finding people to work the 10:00 p.m. to 2:00 a.m. shift. Or to start the day at 4:30 a.m.

Alone on the Island

“We have the only call center on the island, so we are implementing a new culture,” says Lelio Sotomonte, CEO of Transcom. Prospective agents are attracted to the regular employment, fair pay, a career track and a comfortable work environment. The agents also have the chance to interact with other cultures and to improve their English. “I wouldn’t say it was difficult, but we had to make them understand what a call center is,” Sotomonte recounts. San Andres boasts a population of about 60,000 residents and to the surprise of many, sits far closer to Nicaragua’s east coast than it does to Colombia. (Territorial disputes continue today in fact between the two countries regarding Caribbean possessions.)

Instead of just hiring anyone they could, Transcom was –and is– selective about the people they consider. Chief among the qualifications they look for are computer skills, a good work ethic and strong English capabilities. The company currently employs 90 people on San Andres, with the intention of filling all 110 seats. Instead of casting a wide net, Transcom now relies mostly on referrals from existing employees for qualified candidates. Initially, Transcom sent supervisors from their Barranquilla operation to San Andres for four months to help get the operation up and running, and to identify which agents had what it takes to be a good supervisor. Now, all supervisors are chosen from the existing agent’s pool and overall retention is good, according to Sotomonte.

Sotomonte reports that Transcom is considering testing out collections and sales service in order to gauge if the staff can manage multiple campaigns, and eventually add more customers.

Although Sotomonte is optimistic that San Andres can support other small-level call centers, Transcom is the only one currently operating there and investing time, energy and money in order to make their venture a success.

Nearshore Americas made repeated attempts to contact the correct person in charge of the call center training at SENA but there appeared to be some internal confusion as to who that was. Therefore, we are unable to report on the program specifics at this time.