NSAM Staff Report

Colombian President Juan Manuel Santos was joined by Dr. Diego Molano, Minister of Information Technologies and Communications, Convergys Senior Vice President of Operations Christine Timmins Barry and other dignitaries to officially welcome Convergys to the Colombian capital, Bogota, at a special dedication conference yesterday.

The Bogota center began operating in January 2011 and employs 850 bilingual agents who service incoming calls for an international telecommunications client by phone, web-chat, SMS and email. Convergys plans to increase the number of staff to 1,000 by the end of the year, and eventually reach 5,000 positions, and expand the offering to include customer service, technical support, help desk, back office, and IVR support to a diverse portfolio of Convergys clients and their customers.

“The opening of this facility in Bogota demonstrates Convergys’ commitment to Colombia and to our employees here for the outstanding work they perform every day,” said Timmins Barry. “This beautiful city boasts a highly educated bilingual population ideally suited to ensuring Convergys continues to meet our global clients’ current and future need for superior technical and customer support. We are very pleased to be a member of this vibrant community.” However, continual development of bilingual talent is needed in order to meet the rising demand. See photos below

Jorge Robledo, Vice President of Operations in Latin American Operations, Convergys; Christine Timmins Senior Vice President, Global Operations, Convergys; Juan Manuel Santos, President of the Republic of Colombia; Diego Molano, Minister of Informatin Technology and Communications

Juan Manuel Santos, President of the Republic of Colombia; Diego Molano, Minister of Information Technolgy and Communications, Reverend Camilo Bernal, Director, SENA

Juan Manuel Santos, President of the Republic of Colombia; Jorge Robledo, Vice President of Latin American Operations, Convergys; Christine Timmins Senior Vice President, Global Operations, Convergys; Diego Molano, Minister of Information Technology and Communications

Jorge Robledo, Vice President of Latin American, Convergys

By Luke Bujarski

Affordable infrastructure, low wages, big labor pool, and a strong work culture were all good reasons why satellite television provider DirecTV (DTV) chose Cali, Colombia as its newest Pan-American contact center hub. That’s what Site Director Fabian Saavedra shared with us during an interview earlier this week. According to Saavedra, their decision to go with Cali in 2008 has proved decisive to DTV’s success in Latin America, which currently dominates the subscription TV market across Venezuela, Argentina, Chile, Colombia, and Puerto Rico.

But with over two million customers and hockey stick forecasts, Saavedra’s 1,400-agent Cali team is being stretched to its limits. Thankfully for DTV and other contact center operators in the region, there is plenty of Spanish-speaking talent to go around.

Cali is situated in what’s known as the Cauca Valley (la valle) where, according to investment promotion group Invest Pacific, the flat geography makes it ideal and cheap to build both edifices and new infrastructure. “Our second option was to expand in Bogota, but with real estate in Cali at half the price, it proved to make more sense for us,” explained Saavedra. Likewise, the cost of living is 25 percent less in Cali (CPI data) than in her neighbor to the north, where some weary commuters can anticipate travel times in excess of two hours each way.

Quick Stats on Valle del Cauca

- 4.38 million inhabitants (2.34 million labor force)

- 86.4 % urban population

- 15.4 % unemployment

- 26.4 % of budget spent on education (higher than Bogota or Medellin)

- 20K college graduates yearly (Cali only)

- 850 yearly graduates from bilingual high schools (Cali only)

The relatively high level of unemployment in Cali was also a huge opportunity for DTV. “Monthly wages are upwards of $100 cheaper here than in Bogota, and we receive plenty of applications,” remarked Saavedra. However, DTV is not the only company with significant contact center operations there. Local service providers include Ventas y Servicios S.A., Contact Center Americas and Telemark. These firms and a smattering of smaller players employ around 4,200 agents, most of which service Spanish-only markets. Sources indicated that multinational contact center players including Convergys and Atento are also looking at Cali with interest.

80,000 students are currently enrolled in university with over 50 percent focused on either business or technology related career tracks

English Needs Work

DTV Cali has had discussions with their counterparts in the US about the potential for bilingual operations. But with the huge workload coming out of Latin America, this prospect hasn’t gained much traction. Subscription-based services require a high level of client interaction as customers look to upgrade or opt out. According to Saavedra, their Pan-American contact center focuses on four key services critical to keeping all two million of their customers happy: In-bound customer service, client retention, sales, and social media engagement.

Likewise, English speaking agents fetch a high premium in Colombia. DTV has experimented with bilingual services out of Bogota, but resources are slim and can command wages upwards of 70 percent more than Spanish-only agents. Considering Cali’s minimal exposure to international markets, the situation there is probably not much better. Yet, in defense of Cali’s capability in the BPO space, Saavedra insisted that educational programs are well-organized and in place to deliver a formidable workforce of English speakers within two to four years.

What About BPO and IT?

As a systems and software engineer by training, Saavedra also spoke highly of Cali’s potential in technology related services. “We have good universities and a healthy technology ecosystem here.” Indeed, seven out of the nine universities, including Universidad del Valle (UV), are all heavily concentrated in the southernmost zone of the city. In total, 80,000 students are currently enrolled in university with over 50 percent focused on either business or technology related career tracks.

This cluster of colleges is also organized around technology-driven services through a Cali-born initiative called ParqueSoft. As a consortium of over 300 digital art and information technology firms, ParqueSoft hosts a colorful array of startups with names like Techmovin, a software and solutions firm focused on logistics and transportation. Homegrown vendor Carvajal Technology & Services is also said to have an impressive software and applications development center in Cali.

A recent public-private initiative known as BPO City (Ciudad BPO) also speaks in favor of the region’s commitment to growing the sector. This collaboration between the city’s various government bodies, investment promotion agencies, universities, transit authorities, and enterprises has called for measures such as the establishment of a free trade zone for services, additional subsidies for corporate training, college program alignment, and others.

The True Test is Yet to Come

Cali might be considered a late entry for those actively tracking LatAm’s global services marketplace. Nevertheless, it appears to have all of the right elements to see continued growth in the sector, particularly in servicing Spanish-speaking clientele. Saavedra is certainly bullish on the region and has pushed Cali’s labor pool and infrastructure to successfully support a demanding and quickly growing international operation like DTV.

However, Cali’s ability to transcend cultures and language barriers has yet to be seriously challenged by a major bilingual operation. As Colombia continues to attract the attention of big multinationals, Cali will most likely be put to the test sooner rather than later.

Genpact will operate out of the popular FT zone "Zona Franca'

By Patrick Haller

After scouring Latin America for a new hub, the global BPO company Genpact has decided that  Bogota is where its future lies.  Citing an impressive improvement in security, political stability and a high-quality talent pool, Genpact announced yesterday  at a special press conference in Bogota, that it is in the process of building-out 750 square meters in one of the city’s Zona Franca facilities. With a long-term vision that anticipates the hiring of up to 1,500 employees (95% of whom will be Colombian) and an investment of up to $10 million over the next three to five years, Genpact is angling to plant its footprint solidly on the Latin American landscape.

Although it already has a presence in Mexico and Guatemala, the company has determined that Colombia is a country where it is easy to implement this type of investment, especially where Human Resources are concerned.

Genpact has earned a reputation as pioneers in the BPO sector in countries such as China, India, Poland, Hungary and Mexico, and in Colombia it has found all the ingredients that are conducive to growing a strong business. This discovery is due, in part, to the work and dedication of Colombia’s Ministry of Commerce, Industry and Trade (MCIT), ProExport Colombia and Invest in Bogota. “It is always hard [being pioneers] but it has been easier here. We have gotten greater support from them than anywhere else in the world. They are first class,” said Pramod Bhasin, Genpact Vice Chairman, referring to the Colombian agencies. He continued, “Colombia offers a favorable business climate for Genpact and for our clients; a rich talent pool with a high literacy rate and complementary skill sets. Genpact is honored to establish its roots here in Colombia and become part of its culture and its thriving business community.”

ProExport has been working with Genpact since 2008 when a representative in its India office approached the BPO provider with the idea of exploring Colombia

The company is currently recruiting up to 100 employees to launch its 200 seat center by January or February 2012. First it will offer Finance and Accounting (F&A) service as well as procurement and supply chain BPO to North American clients, then add business development staff to secure Latin American clients. The Bogota location will also act as Genpact’s hub for its Smart Decision Services business, which encompasses analytics, reengineering and risk management services. Genpact’s investment is part of the Productive Transformation Program that the Colombian federal government has been developing to promote the outsourcing services sector as one the 12 economic sectors that are considered “pillars of industrial policy.” According to the MCIT, Colombia aims to create 72,700 new business process management services jobs by 2014, which will bring the total to 142,280. It also seeks to increase exports from $200 million to $1.1 billion during the same period.

ProExport has been working with Genpact since 2008 when a representative in its India office approached the BPO provider with the idea of exploring Colombia. “We are convinced that this decision not only confirms the confidence that foreign investors have in the country,” said President of ProExport, Maria Claudia Lacouture, “but the great potential of the business process management sector.” Genpact’s investment, Lacouture explained, is not so much one of capital, but one into Human Resources, allowing Colombia to show a different capability than what the world may be accustomed to.

Gartner has determined that Colombia is one of the main countries in which to locate BPO services. “The welcoming of Genpact to Colombia will be an important milestone of third-party outsourcing for Colombia,” stated Lacouture. Bogota is a center for BPO providers that accounts for 55,000 employees. Some of the elements that have fostered this growth are the 94,000 annual university graduates, 50% of whom are engineers. “The industry has been developed,” said Adriana Suarez, Executive Director of Invest in Bogota, “there are more than 16 companies in Colombia: IBM, DirectTV, Indra, Everest. IBM has a sales center in Bogota, Convergys has 1,000 employees here. Genpact gives a very high aggregated value.” Teleperformance has also established a strong presence in Bogota.

The Genpact deal was the first joint effort between ProExport and Invest in Bogota, agencies that have traditionally pursued separate opportunities. The success of this venture could signal a turning point in their approach to doing business, one that has been a long time coming. “This cluster is very important for Colombia,” declared Juan Carlos Garavito, General Manager, MCIT, “from now to 2014 we expect to create 70,000 more employment opportunities.” Bhasin stressed that Genpact is committed to providing such opportunities, and said that when Genpact enters a market a large percentage of the industry will also establish operations there. “I hope we can be a catalyst for investment into Bogota. This supports our strategy for Latin America,” he explained, “Our aim is to build a local technical, reengineering, BPO business to serve Latin American clients.”

Bhasin went on to say that the developed world is going through turmoil today, and industry is turning to emerging markets as safe havens. Taking a local approach wherein local employees respond to local (regional) clients, enables Genpact to train the employees –a process which can take up to three months– and introduce other opportunities to that market. “We hope to provide high-end services such as analytics and advanced modeling to Latin America from Colombia,” Bhasin said. Over the next two years Genpact will explore other Colombian cities such as Medellin and Barranquilla to determine where it would be most advantageous to open additional offices.

Genpact’s entry into Colombia is fortuitous, as Rodrigo Chávez, Sector Manager Latin America & Caribbean Region at the World Bank announced today that Colombia is the best prepared country in Latin America in which to withstand another global economic recession.

By Tarun George

Long perceived as a risky sourcing destination, Colombia has in recent years largely shed that stigma and transformed itself into one of the best business locations in Latin America. Ranking highest on the World Bank’s 2010 Doing Business Report, Bogotá is a forward-thinking city with a focus on IT. But now it seems that a new stereotype about the Colombian capital is taking root. Reports are that real estate prices in the city have been rising, and buy-side companies are concerned. Are the rumors true? To get the story, we spoke with real estate analysts, private vendors on the ground, and the city’s promo agency Invest in Bogotá.

Large Price Variation

With a population of 7.3 million, Bogotá is one of the biggest cities in Latin America. Characteristic of that scale is the level of real estate price variation between different areas in the city, which in Bogotá is substantial. Part of it is due to the migration of businesses away from downtown in the last two decades into the northwest part of town, which has now become the commercial and financial center. Rental prices for office space are highest here. To give an example, a prime high rise facility that an IT company could rent would be priced at approximately US$ 35 per m², while a Class B space intended for a BPO contact center would run at $11-17 per m².

Why such a large price variation? “Some years ago developers would simply build the basic structure, but these days clients are demanding more complete packages”, says Mónica Ramírez, Senior Investment Officer at Invest in Bogotá. “So builders now incorporate things like electricity and broadband connectivity, which drives up rates. The starting price is $25 per m², but these offices will include almost everything – it reduces the investment clients have to put in when they occupy”. According to the Bogotá Chamber of Commerce, the highest possible rental price for office space is $40 per m².

“Real estate cost is not the most significant driver in site selection. Whether Bogotá is acceptable from the skilled labor and wage standpoint is what will deliver cost savings for a company, and will ultimately make the city attractive as a sourcing destination” – Susan Arledge, of Arledge Partners

Supply and Demand

However, the fact that rental prices vary across Bogotá doesn’t mean that real estate for the city as a whole is getting more expensive. We got an on-the-ground perspective from Ricardo Duran, President of local provider Outsourcing SA, who doesn’t think prices have risen at all. “Bogotá is competitive in terms of real estate”, he says. “I have two call centers downtown and one in the north of the city. I’m paying the same low rate for both areas”.

The people at Invest in Bogotá do admit that prices have risen slightly, but everything we’ve heard suggests that the increase is too small to be a serious concern for companies, at least for the time being.

What is concerning is the diminishing supply of sizeable office space in Bogotá, and the effect it will have on real estate prices in the next five to ten years. “The supply in Bogotá right now is for small to medium spaces, not large spaces”, says Jeff Pappas, Executive VP of Transaction Services for Arledge Partners Real Estate Group. “Very few US companies are going to come in on a small scale – they want facilities upwards of 2000 square meters. It’s the lack of that kind of space that’s going to drive up prices in Bogotá”.

Statistics on Bogotá’s available office space also need to be read correctly, says Pappas. The total available space in 2009 was 700,000m² with a projected growth of 10.8% over five years, making the available space in 2014 around 775,000m². This looks promising until we look at the absorption rate in Bogotá, which in 2009 was 120,000m²/year – easily greater than the projected increase. “Bogotá is becoming a sourcing hotspot, and the demand for space is huge. There will be a supply issue”.

Projections for the Future

According to Pappas, one of the criticisms regarding the supply of sizeable office space is that there is not a lot of speculative development in Bogotá. Small local firms that started years ago have now grown and are absorbing the larger spaces, leaving the Free Trade Zones in the south of the city as the only option for international companies. Bogotá is trying to ramp up a few notable construction projects, with plans for the largest skyscraper in Latin America (BD Bacatá) in the works. But it may be a few years before supply and demand of larger office space in general can be balanced.

For the time being, companies are relying on creative renovation, as Susan Arledge, CEO of Arledge Partners puts it. “We go in and convert buildings like malls or car dealerships, renovate them and use them for call center operations. That’s where you’ll see the best real estate prices”.

The Effect on the Buy-Side

Reports that US firms are being deterred by escalating real estate prices in Bogotá are largely exaggerated. In fact there’s nothing to suggest that the buy-side is at all concerned about the slight increases, and Bogotá remains quite comparable to other emerging ITO locations “We actually visit some buildings with potential investors”, says Ramírez from Invest in Bogotá. “For medium to small operations there is a huge offer in Bogotá, and we generally have not seen problems for companies”.

Arledge agrees – “Real estate cost is not the most significant driver in site selection. Whether Bogotá is acceptable from the skilled labor and wage standpoint is what will deliver cost savings for a company, and will ultimately make the city attractive as a sourcing destination”.

Source: Latin Business Chronicle

BOGOTA, Colombia – The Unisono call center is located in the Colombian capital of Bogota. But you wouldn’t know it walking past the rows of youthful operators equipped with headsets and computer monitors.

Chilean flags fly in one wing of the sprawling office while the red-white-and-green national colors of Mexico dominate another section. The decorations set the mood and help Unisono employees get in synch with their customers and clients from around Latin America.

It’s a nice touch, one that’s helped the Spanish company Unisono make its mark here in Colombia. The company plans to upgrade its Bogota call center and double the number of employees from 320 to 640 by the end of the year, according to Ana Isabel Iglesias, an Unisono development consultant.

Like Unisono, call centers in Colombia are undergoing a rapid transition. The first call center opened here in the mid-1990s but now more than 30 have set up operations. Most are located in Bogota but firms have set up operations in Barranquilla, Cali, Ibague, Manizales and other cities.

Some of the largest include Multienlace, Atento, Contact Center Americas, and Sitel. All told, they employ 70,000 people. Last year, they invoiced more than $500 million in sales, says Ana Karina Quessep, executive director of the Colombian Association of Contact Centers and BPO.

“We’re becoming a world-class destination for call centers,” said Quessep, who is organizing the 7th Andean Congress of Call and Contact Centers which will be held in Bogota from May 19-21.

Due to its size, Brazil remains Latin America’s largest player in the call center business followed Mexico and Argentina. But Colombia has become an attractive location due, in part, to the way people here speak Spanish.

The Colombian accent, especially in Bogota, is widely considered the most neutral. And that makes a huge difference when fielding calls from all over the Spanish-speaking world.

“It’s a key factor,” says Iglesias. “When you’re selling something you need to be understood and to form friendships over the phone. So you want a neutral accent.”

Besides language, the security situation has improved. The murder rate has fallen while last year the country registered fewer than 200 kidnappings, down from more than 3,000 a decade ago.

Other advantages include the minimum wage, which is low compared to other Latin American nations and nearly makes Colombia competitive with India, the world leader in call centers.

Some call centers have gained tax advantages by setting up in one of Colombia’s 55 free zones. In addition, Colombia’s judicial security is viewed as a strongpoint while the country is home to a vast, underemployed population of university students who make up most of the bulk of call center employees.

Proexport Colombia, which promotes exports and foreign investment, predicts that by 2012 Colombian call centers could generate 156,000 jobs and $2 billion in sales.

But for that to happen, call centers here will have to focus on offshore operations, says Jorge Enrique Cote, general manager of Contact Center Americas – which employs 4,500 people at four call centers in Bogota and Cali.

For now, about 87 percent of the business is connected to Colombian companies, like AeroRepubica or Comcel, while just 13 percent deals with international firms.

“Most Colombian companies are taken care of,” Cote says. “We’re going to have to work more with the international market.”

By Ana Karina Quessep

La importancia de que un País se adapte rápidamente a los cambios en todo nivel permite que sea competitivo y que este  a la vanguardia en los aspectos necesarios para llevar su economía al nivel esperado.

Hace más de 15 años Colombia ha venido trabajando en  el tema de tercerización de Procesos  a través de la industria de los Contact Centers, sin embargo este proceso de desarrollo dedicado solo a voz  hoy  requieren que involucre un concepto más  globalizado  enfocado a BPO&O.

Con la ayuda del Gobierno a través del Programa de Transformación productiva, la industria  se consolido como un sector emergente de Clase Mundial, para lo cual  un estudio de McKinsey  le dio vida a una oportunidad de negocio, que se consolidara a nivel local, en inversión extranjera en el país y exportación de servicios.

Preparados  para el cambio  hemos visto más movimiento en  la industria Colombiana de  Contact Centers y BPO en los últimos 3 años que en los últimos 20, y este cambio  asociado al cambio tecnológico y  necesidades del mercado  tienen que ver  con un interés  básico de crecimiento y propuesta de convertirnos en un  sector  emergente para la economía  Colombiana y  sobre todo un sector  de Clase mundial.

Este estudio realizado en 2008 contemplo revisar la situación actual y trabajar sobre aspectos que hoy ponen al país a competir en diferentes frentes de la industria de tercerización de procesos, los cuales  el Gobierno y   el sector privado están comprometidos para hacerlos realidad.

Estos frentes se enfocan en Recursos Humanos, Madurez, promoción de la industria, internacionalización, Regulación e Infraestructura, y sobre estos ejes, hemos adaptado nuestro proceso y adecuado al  sector para crecer  en forma organizada.

Preparados  para el cambio  hemos visto más movimiento en  la industria Colombiana de  Contact Centers y BPO en los últimos 3 años que en los últimos 20, y este cambio  asociado al cambio tecnológico y  necesidades del mercado  tienen que ver  con un interés  básico de crecimiento y propuesta de convertirnos en un  sector  emergente para la economía  Colombiana y  sobre todo un sector  de Clase mundial.

Volvernos competitivos como país y tener una oferta calificada de servicios para el mercado local y el mercado internacional es uno de los retos más grandes que hoy enfrentamos y estamos por el camino correcto.

Hoy en día  el programa de transformación productiva y la iniciativa privada han logrado dar resultados, poniendo al País en el mapa  mundial de Outsourcing.  Sin duda alguna este programa ha sido el impulso de un cambio que se veía llegar , pero que evoluciona  rápidamente pues gobierno y empresas, representadas en los gremios, han dado ejemplo de trabajo alineado  que muy difícilmente se encuentra en América Latina.

El país entendió que para  potencializar las ventajas ya existentes y unirse a las tendencias mundiales de Outsourcing debía hacer un cambio que hoy  es realidad y se ve reflejado en la cifras de crecimiento.

Fuente  IDC

Pero  este cambio  ha venido acompañado de un entender de los mercados “donde ir y que ofrecer”.  Superar el mercado local  y  escoger  un destino para exportar servicios no solo al mercado de habla hispana, sino pasar las fronteras del idioma y entrar al  mercado anglo parlante.  Esto ha implicado un desarrollo de idiomas al interior del proceso educativo  sobre el cual hoy el gobierno  hace un gran esfuerzo para desde diferentes entes  lograr un cubrimiento mayor.

Programas locales como Talk to the world,  apoyado por la Alcaldia de Bogota, Invest in Bogotá, SENA (Servicio Nacional de Aprendizaje) y recientemente  el censo de personas que hablan Ingles en Colombia, I SPEAK,  han logrado aumentar  la oferta laboral bilingüe que permita tener operaciones  de offshoring  hacia Estados Unidos.  Hoy  con más de 5 operaciones 100% bilingües, hemos dado un paso importante, nos movimos del mercado que habla Español a un mercado Bilingüe, donde se atienden ventas, suscripciones, donaciones, y servicio al cliente en general de compañías Americanas que han puesto sus ojos en el País bajo un esquema competitivo de situación  geográfica, mano de obra calificada, calidad, regulación, estabilidad política, impuestos y precios, que han permitido hoy que su operación sea exitosa.

ANA KARINA QUESSEP , DIRECTORA EJECUTIVA, ASOCIACION COLOMBIA DE CONTACT CENTERS Y BPO

By Kirk Laughlin

“When (call center executives) from the U.S. go shopping in LATAM, they are amazed at what Colombia has to offer” – Sara Bojanini, Investment Director at Proexport USA

One of the hottest Latin American BPO destinations – Colombia – is about to win a couple more big deals, according to Sara Bojanini, Investment Director at Proexport USA, who sat down recently with Nearshore Americas to talk about the attractions of Colombia and how the country continues to carve out its own identity as a major sourcing destination.

A few weeks ago, we reported that Convergys will be opening a new delivery center in Bogota, and our sources continue to tell us that this project is going through, despite the fact that Convergys has not yet confirmed the project publicly. Another major contact center provider is moving toward establishing a new Colombia facility, according to Bojanini, but she could not yet name the provider.

Additionally, a major corporate customer is also moving along with plans to open a center in the near future, she added. The fact that these firms are investing in Colombia is no surprise to her. “People (call center executives) from the U.S. like to go shopping in LATAM and when they go to the different cities, they are amazed at what Colombia has to offer,” say Bojanini.

Colombians are frequently praised for their neutral Spanish language accent, a talent that has obvious appeal to customers needing Spanish language support to service businesses in the U.S. Also, outgoing Colombia President Alvaro Uribe has been a major champion of stimulating foreign direct investment and much of that work is showing up in the global sourcing industries. “The president is very committed to FDI,” says Bojanini. “He has helped us out a lot by frequently making presentations to key investors on the value of FDI in Colombia.” In the last eight years, FDI has roughly doubled to $10 billion in Colombia.

Bojanini, a Colombia native, works in Proexport’s New York City office, where she helps facilitate relationships and deals between U.S. and Colombia companies. Proexport, by the way, has a simple mission: Increase Colombian non-traditional exports, international tourism and foreign investment to Colombia. The organization is dedicated to driving investment in eight different sectors, including BPO, IT Services, Green Energy, Graphic Design and Manufacturing.

The Caracas Exodus

Colombia seems to have another good thing going for it: Multinational corporations, shaken by the recent economic instability in Venezuela, are finding that Bogota is a better alternative and are setting up regional offices in Bogota and shuttering operations in Caracas, says Bojanini.

This trend is likely to continue as the cost of doing business in Venezuela remains high. Furthermore, if the newly elected Colombian president shows a similar commitment to economic growth, then Colombia’s prospects will continue to look quite bright.