Nearshore Americas

Alorica Opening Shows Dominican Republic Cannot be Overlooked

alorica logoAlorica’s recent inauguration of is contact center in Santo Domingo was an eye-opener for Ovum analysts who traveled to participate in the event. Getting a perspective on what had become a somewhat overlooked delivery location in recent times being refreshed with one of the Caribbean’s most advanced contact centers provided a valuable insight into the potential future of the country’s industry. In Ovum’s view, the Dominican Republic carries opportunity for vendors (and their clients), providing more opportunities for site diversification and added-value multilingual service delivery from the very competitive Caribbean and Latin America (CALA) region.

There are several reasons why Ovum feels that the Dominican Republic should at least be considered by contact center outsourcers seeking to establish a foothold in new CALA locations. One of the most salient is the nearshore proximity of the country to the US (less than a two-hour flight from Miami), which is especially attractive in an age where fewer executives (both from clients and vendors) wish to spend excessive amounts of time on airplanes travelling to far-off delivery sites. It is worth noting that the government is also fully supportive of the outsourcing industry, with a free-trade zone incentive policy that is flexible and competitive with the rest of the region.

The scalability of the Dominican Republic is especially compelling. With a population estimated to be in excess of 10 million people, it is larger than Nicaragua, El Salvador, and Costa Rica, meaning less chance of saturation challenges in the short-to-medium term (an issue that vendors constantly grapple with in each of the latter-listed countries). In addition, the Dominican Republic’s telecoms and transport infrastructure is solid, and sources on the ground indicate very few operational disruptions.

Opportunity for Vendors & Clients

It is surprising to Ovum that the Dominican Republic’s contact center set of competitors remains relatively limited compared to other markets in the CALA region. In addition to Alorica (mentioned above), ACS, Stream, and Teleperformance maintain delivery centers in the country, but anecdotal evidence indicates that few other large, global players are planning imminent investments. This lack of competition must be somewhat attractive for the outsourcing community, which has been desperately seeking new delivery centers that do not carry with them the challenges associated with over-saturation. It should be especially engaging for outsourcers looking to get a footprint or increase an existing presence in the American nearshore.

Outsourcers looking to win business through Dominican Republic delivery need to examine how to differentiate the country from its regional country competitors. In our view, going beyond the arguments commonly used in all CALA outsourcing markets – claiming close US proximity, improvements in infrastructure, and ongoing stability – the major case to be made for the Dominican Republic is language provision. In addition to an abundance of Spanish-speakers, it is estimated by some industry players that approximately 20% of residents have a good understanding of English (owing to family and commercial connections with the US), while Italian-speakers are also said to be found in some numbers.

Equally important from a competitive position is the growing number of Haitians that are relocating to the Dominican Republic, bringing with them a growing French language capacity. This lends outsourcers in the country to open themselves up to the Canadian bilingual market, which has been a challenge to service from single nearshore/offshore locations (as very few sites have large numbers of English and French speakers). Going after Canadian enterprises with a single, bilingual offering opens up a new opportunity for outsourcers working from the Dominican Republic, and it adds an interesting twist to the nearshore dynamic.

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Going forward, it will be essential that vendors of contact center services work closely with relevant government bodies to get this location back squarely at the forefront of the nearshore equation, so that the benefits that the Dominican Republic can bring to clients (and their end-users) are not lost among the backdrop of the rest of the countries promoting outsourcing investment in the ever-competitive CALA region.

Peter Ryan is a leading analyst with Ovum and contributes regularly to Nearshore Americas. This article is reprinted upon permission of the author.

Peter Ryan

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