Nearshore Americas

CrossConnect: Why ‘Meaningful Engagement’ is Gaining Significant Momentum

The global services industry is no stranger to witnessing the social and economic impacts of client operations in major delivery hotspots. India, the Philippines, Costa Rica and other countries have seen entire communities given a shot at upward mobility thanks in part to the capital invested  by foreign companies.

This was one of the central discussion points at a key panel discussion during last week’s CrossConnect Forum in London.

Although not new, the phenomenon seems to be entering into a higher gear. Countries are waking up to the use of “meaningful engagement” as part of their pitch to potential investors, effectively leveraging a do-good sentiment which drives capital towards projects that offer something more than positive financial results. “There is a desire for your UK buyer, and US as well, to have meaningful engagement with the very community that is going to be working with their brand”, commented Traci Freeman, in charge Investor Relations, Marketing and Growth at BPESA, during her participation in CrossConnect Forum’s closing panel.

“That’s where impact sourcing from both a commercial and a do-good aspect comes together. The countries have learned what that looks like and put that in place from the beginning”, she added.

crossconnect forum meaningful engagement core shores
Closing panel at CrossConnect Forum. Speakers on stage, from left to right: Peter Ryan (Chief Analyst at Ryang Strategic Advisory); Andrew Wrobel (Founding Partner at Emerging Europe); Traci Freeman (Investor Relations, Marketing and Growth at BPESA); Jeff Pappas (Senior Managing Director at Newmark); Alistair Niederer (Company Director at NeedleRock)

From ESG compliance to impact sourcing initiatives, it’s evident that companies are expressing more concern over the footprint of their business ventures. Everest Group, for example, managed to make over 40 businesses join its pledge to expand the global impact sourcing market from 350,000 full time employees to half a million in three years.

Meaningful engagement has been identified by top analysis firms as a net positive for businesses. A recent article published by McKenzie & Company pitches upward socioeconomic mobility as a win-win for companies in the UK specifically. The firm argues that, in a way similar to diversity and inclusion policies, recruiting with a wider net will yield better results in the long run not only for the business, but for the ecosystem as a whole.

“There is a desire for your UK buyer, and US as well, to have meaningful engagement with the very community that is going to be working with their brand”—Traci Freeman Investor Relations, Marketing and Growth at BPESA

Do-good strategies have shown their fair share of success in the Nearshore, turning out positive for local communities as well as for businesses. Last year, the Dominican Republic received GlowTouch, with the company promising to deliver more than just jobs.  All through the Caribbean, itel has built a reputation as a benefactor of communities, a strategy which has paid dividends from an investment and talent acquisition standpoint.

“In Latin America there are still markets where you can come in and make a difference”, commented panelist Jeff Pappas, Senior Managing Director at  business intelligence firm Newmark. “That’s how they [companies] get people and how they grow, it’s not what they pay them, but what kind of impact; what can their employees do and what they can do for their employees”.

“There are so many markets like that in which a company can make that kind of impact in Latin America. That’s why it’s always going to be popular”, Pappas added.

Changing Perceptions

While there’s interest from potential investors from the US and Europe in making meaningful investments in regions such as Latin America, Africa and Eastern Europe, there’s still a major problem to be solved: perception.

An issue reported by NSAM before, the fact is that several foreign investors still remain in the dark when it comes to the actual capabilities of locations where their capital might generate a positive impact.

“The buyer community doesn’t know what they don’t know. They have old perceptions about what our emerging countries are”, Freeman said.

Stories abound of foreign investors who still see the Caribbean and Latin American region (CALA) as a producer of raw materials or a hotspot for vacations spots. In spite of the wealth of information available about the development of the region’s capabilities as a provider of IT services, and even when behemoths of the IT consulting industry have been operating from the territory for over a decade, ignorance runs rampart still.

“It’s really about perception marketing. That’s number one, just to open up the conversation”, Freemand added.

Shifting Sands

Change is happening all over the global services industry, and none of the Core Shores are exempt from innter transformation.

The Russian invasion of Ukraine changed the dynamics of service delivery in Eastern Europe, but not in the ways that were expected. 

Although the war has complicated investment opportunities in Ukraine –for long one of the favored delivery hotspots in Eastern Europe–, the machinery hasn’t stopped. In fact, numbers point to an acceleration of the country’s tech sector. Software services exports grew by 5.8% in 2022 year-over-year, according to the National Bank of Ukraine. A year into the war, there are stories aplenty of programmers and software engineers coding in the trenches, answering client-calls while on nightwatch and delivering projects sooner than expected.

“It’s interesting to hear how committed they have become […] Everything has sped-up significantly”, said panelist Andrew Wrobel, Founding Partner at Emerging Europe, during his participation at CrossConnect.

“We’re going to see a lot of impact made by these [Ukrainian] companies operating from a number of geographies”—Andrew Wrobel, Founding Partner at Emerging Europe

Ukrainian firms aren’t sitting it out at home, though. Several are exploring the possibilities of internationalization. Companies from Ukraine are opening offices and delivery centers in India, Colombia and other top delivery locations in different Core Shores. 

“We’re going to see a lot of impact made by these [Ukrainian] companies operating from a number of geographies”, commented Wrobel. “The interesting thing is that they are very well established in the local market. They bring Ukrainian talent, but they also rely on local talent”.

Though investors are avoiding challenging markets such as Serbia, Moldova and parts of Ukraine itself, Eastern Europe as a region remains resilient, Wrobel pointed out. Poland, Romania and the Western side of Ukraine, contrary to initial expectations, are pushing through. 

“The region has become more resilient, more agile. And we’re going to see, especially from Ukraine, more aggression in the UK market”, said Wrobel. “They have been traditionally stronger in the US with their delivery, and now they’re eying the UK”.

NSAM Managing Director, Kirk Laughlin (left), giving closing remarks after the panel

The landscape is also changing in Africa. South Africa is “coming along like crazy”, commented Alistair Niederer, Company Director at NeedleRock. In a similar way to several Latin American countries for the US, the country has grown into a favorite delivery hotspot for European firms. It ranked sixth in the latest BPO Confidence Index, above industry heavyweights such as Philippines, Romania and Mexico. This was achieved thanks to strong scores for its BPO ecosystem and economic stability. 

“The value proposition for South Africa is not dissimilar from what you’re hearing today from a Nearshore or US perspective”, explained Traci Freeman.

But Africa, as a Core Shore, is more than just South Africa. CrossConnect panelists pointed to a long list of strong contenders in the continent: Zimbabwe, Ghana, Rwanda, Ethiopia, Uganda, Egypt and Morocco, just to name some. 

“The value proposition for South Africa is not dissimilar from what you’re hearing today from a Nearshore or US perspective”—Traci Freeman, Investor Relations, Marketing and Growth at BPESA

In the CALA region, though the alternatives were already plentiful, the emergence of tier-2 and tier-3 locations as viable have put potential customers in a situation in which they’re spoiled for choice. 

“It’s not just Mexico. There are some great countries right there”, commented Jeff Pappas. 

“As a UK buyer, you have to wonder: ‘How big do I want to get? What are our language capabilities? What’s my payscale going to be?’”, he added. “Those are the three key things they have to understand when looking at the Caribbean and Latin America, because it’s all across the board”.

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In spite of the shifting landscape, some of the basic tenets of GBS still stand. Most importantly: good service delivery.

“People are wanting attention to their time; they want an action, they want a solution, and they’re not particularly worried about the accent. And that’s a big shift that’s come along”, pointed out Niederer. 

“It doesn’t matter whether it is Rwanda, South Africa, India. If you’ve reached a certain level, if you are giving that customer what they want with respect, if you can deliver it, you got a huge tick in the box”, he added. “That surpasses anything else now. That’s opened us up to a global view that’s never been there before”.

Cesar Cantu

Cesar is the Managing Editor of Nearshore Americas. He's a journalist based in Mexico City, with experience covering foreign trade policy, agribusiness and the food industry in Mexico and Latin America.

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