A recent post, and some back and forth commentary, about the controversial “Black Book on Outsourcing” triggered this long letter from the CEO at Datamonitor Mark Meek, submitted a few minutes ago.

TEXT OF LETTER:

As CEO of the Datamonitor Group, I wanted to address some of the points raised in the article. The strategic vision behind Datamonitor’s acquisition of The Black Book of Outsourcing in mid 2009 is to create a world-class (out)sourcing research business that brings together the following:

Outsourcing-specific end-user primary research (through The Black Book survey);
Sourcing-specific analysis and bespoke consulting (through Orbys, a Datamonitor company);
Insight and analysis into the application of outsourcing within vertical markets (through Datamonitor’s vertical research businesses).

2010 will see significant investment in each of the above-listed lines of business in order to create an outsourcing research business that can effectively serve the information needs of both the vendor and the end-user community. For The Black Book of Outsourcing, whilst Datamonitor believes that the fundamentals of the business are sound, we are aware that there is work to be done to improve the business and to that end we will be implementing the following for the 2010 Black Book of Outsourcing survey:

- Datamonitor’s core focus will be to improve the methodology and the transparency of the survey and we will be engaging with key vendors to better understand the improvements they would like to see in the 2010 survey;

- The survey will be managed and run in-house by Datamonitor’s own survey experts and not by historic members of the Black Book research team. This will ensure that Datamonitor’s research best-practices are fully applied to The Black Book of Outsourcing;

- Datamonitor will enhance the survey questions so that they are more statistically robust but at the same time maintaining a core consistency for continuity;

- We will introduce additional survey questions in order to cover topical issues such as Sustainability;

- We plan to increase the overall number of survey respondents with a particular focus on increasing geographic spread;

- We will use Datamonitor analysts to interpret the survey results and provide objective opinion on a sourcing, technical and industry level;

- We will check and balance The Black Book of Outsourcing survey results with the experience of Orbys consultants in order to provide a more holistic view of vendor performance.

Whilst Datamonitor has aggressive plans for enhancing The Black Book of Outsourcing’s research output, the survey will continue to rank vendors (and countries) based upon the results of the end-user survey. As such, we may never be able to persuade all poorly-ranked vendors from attempting to encourage their clients to ignore Black Book of Outsourcing vendor rankings. We do, nonetheless, hope that more of them will take note of the survey results in order to enhance the level of service that they are providing to the clients.

By Karina E. Cuevas

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.

Colombia has over 20 contact centers around the country all with different levels of success. Teledatos, located in Bogota, ranked number two in 2008 accounting for 13 percent of the market revenue.  With 15 years of history, Teledatos has become a leader in domestic services and has an open door policy for international business. They focus on the health care sector, air and land transportation with their services delivered mainly in Spanish, but also in Portuguese, English and Papiamento (the official language spoken in the Caribbean islands of Aruba, Bonaire and Curacao).  It has a consistent portfolio of loyal clients, one that has maintained a 14 year long business relationship and others that see their quality in customer service and have stayed for over four years and counting.

Over 55 Clients Served

“Teledatos is born in Medellin and then in Bogota, being it the capital it went on to be part of the growth strategy,” says Mauricio Velasquez, Commercial and New Business Vice President. “We employ around 6,200 people and service 55 companies from Europe, the United States and Latin America.”

Profile: Mauricio Velásquez M.

Commercial and New Business Vice President of Teledatos

Systems Engineer of EAFIT, Specialized studies in Management in Universidad Pontificia Bolivariana and in Direct Development in INALDE.

He is a professional and numbered member of the International Association of Outsourcing Professionals – IAOP, USA.

He was Manager of Business Development with an emphasis on Outsourcing for HP in their region MCA (Multicounty Area), Director of Sales for business lines of Telecommunications for Unisys in Puerto Rico, Project Leader of IBM, among other related positions within outsourcing in technology.

Since 2009, he is the Commercial and New Business Vice President of Teledatos S.A. company that thanks to the strategic vision of its management team, it has leader the transformation of the Contact Centers in Colombia, transforming them in to one of the most strategic sectors of development in the country.

In the national market they place as number one when it comes to number of employees and annual capital.“Latin American culture is very easy and it’s not the same as in Pacific Asia because they have a barrier which is the English language,” says Vasquez. In Latin America we speak English and we weren’t born with it as a main language, so for companies like Samsung or LG that cater to the Hispanic population it would be easy for us to take care of their needs in our language, but for Indians to learn Spanish would be a very difficult process.”

The Colombian government is taking English language training seriously and is developing incentives to bring more qualified workers into call centers and outsourcing.

Government Steps Up its Role

“For this sector and with the help of the Department of Economic Development and the local government of Bogota we created a program called Talk to the World that is currently training 575 future employees in English and we expect to train 10,000 more in the next four years,” says Monica Ramirez Hartmann, Investment Officer of Invest in Bogota, a nonprofit investment promotion agency created by the Alcaldia Mayor de Bogota and the Bogota Chamber of Commerce.

According to Hartmann, Invest in Bogota together with other government institutions such as Servicio Nacional de Aprendizaje (SENA) is training and helping employ as many people as they can within the contact center industry regardless of their career choice. They want to attract as many foreign investors as possible by offering them the best customer service at a low price and therefore making Bogota grow from its 60 percent annual revenue within the industry.

“Colombia is a country that for 20 years has had a bad image, but today’s situation is not the same, it’s a problem on how you perceive things and reality,” says Ramirez Hartmann. “This is the least expensive country in Latin America when it comes to payroll, infrastructure and telecommunications and it’s all very effective, they don’t offer any problems to companies. We are also in a great geographic position compared to India and the Philippines, since it’s a city where all the major airlines arrive making it therefore a convenient destination.”

Karina E. Cuevas is a contributing writer to Caribbean CRM Central. She is based in the Dominican Republic and can be reached at: kecuevas@gmail.com

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. Karina Cuevas, our reporter on the story, followed up by sending specific questions, like:

-          Have you ever been Bogota?

-          What documentation and data did you base your analysis on?

-          Did you make contact with any institutions in Colombia to validate your claims?

Unfortunately for all of us, Wilson failed to respond to our questions. That leaves us all wondering about the validity of the findings, how certain Brown and Wilson are of their research, and what level of influence they may have been under from underwriters, clients or sponsors. We may never know the answer to these questions and Brown and Wilson certainly are not the first to distribute opinion parading as research.

The Bogota issue has raised eyebrows across the Internet, including a sharply written objection from well-regarded IT editor Bob Evans at Information Week. Others like Steve Mezak, the CEO at outsourcing consultancy Accelerance, point out that the ranking is largely a joke considering the improvements going on in Bogota.

What have we learned?

We at Caribbean CRM Central and parent publisher Nearshore Americas believe this is an important rallying cry for the region as a whole to recognize that random and erroneous claims such as this one should not go unchallenged.  One of our primary roles at this media organization is to bring to light the reality of doing business in Nearshore countries that is accurate and provides a voice for both customers and providers of outsourcing services. As a Brazilian friend – who works in the outsourcing services industry and grew up in Brazil – recently told me: Sao Paulo is a whole lot more dangerous than Bogota. Yet, where did the Black Book authors place Sao Paulo? The city placed 31^st on the list of risky outsourcing destinations.  We’re not picking on Brazil either – the point is that the people who really know what’s going on are the people you want to talk to when you do “research.” The Internet can be a powerful tool in spreading the truth and portraying reality. That’s what we’re here for…. – Kirk