Nearshore Americas

Colombia and Peru Show Up on Gartner’s Top Location List for the First Time

By Kirk Laughlin

Colombia and Peru – once considered second-class destinations on the Latin American offshore outsourcing landscape –have both landed on one of the more respected rankings of global services locations which effectively seals their ascent to worldwide BPO respectability.

We know it can get a bit dizzying keeping up with the assorted ‘best of’ lists in global offshore services, but the Gartner ranking is backed up by sound methodology that relies on a host of data sources as well as qualitative input from the firm’s domain-expert analysts.  Colombia and Peru join perennial favorites on the 2011-2012 list, announced today: Argentina, Brazil, Chile, Costa Rica and Mexico. The eighth Nearshore country is Panama, which re-enters from previous years.

Read on to hear what lead Gartner analyst Ian Marriott from told us about why Colombia and Peru made the final cut.

Colombia: A Modest Endorsement

“We are starting to see the pieces come together economically, politically and also in technology capability,” said Marriott, who is the chief analyst on the annual list. “The country is starting to put the jigsaw pieces together.”

It is worth noting that Colombia’s placement on the list reflects a sustained effort that has been in the works for a number of years, and reflects the influence of investment promotion agencies like Proexport Colombia, ANDI and Invest in Bogota. Although the manifestations of the rise of Colombia have become very apparent in 2010 (see our news items include HP’s new captive in Medellin, Sutherland’s arrival and Convergys’s embrace of Bogota), this is no accidently occurrence. One of the most important data points that stood out for us is the fact that Gartner cited evidence that Colombia is “the Latin American country with the largest investment in information and communication technology (ICT) infrastructure as a percentage of its GDP.”

In other words, Colombia is demonstrating the capacity to pay attention to stimulating and coordinating the wide spanning factors that generate a positive rating and a welcoming environment for global services/sourcing decision makers and influencers.

Let’s be clear however that neither Colombia or Peru get rave reviews from the Gartner analysts. Colombia only received “good” remarks in three categories – cost, political and economic environment and cultural compatibility – the remaining categories, including language, government support, infrastructure, educational system, legal maturity and data security and privacy – were all placed in the “fair” category.

The report did highlight that labor conditions are attractive: “Labor laws, and the low presence of labor unions, combined with longer shift options, offer flexibility and make it easy for prospective vendors or organizations seeking captive center options to deal with HR issues. The availability of talent is steadily growing.” The report also noted that personal safety is – not surprisingly – far better than it was several years ago. “Kidnapping and violent crime have declined drastically and are now confined mainly to rural areas,” the report states.

Gartner advises to look at Colombia for “internal shared services, BPO, contact centers and captive centers.” The country also stands out as a place where competition for IT talent/resources may be less than it may be in other locations.

Peru: Inflection Point

Getting better marks than Colombia across the board in Peru, which Gartner says is at an “inflection point” and is becoming a “steady component of the IT value chain, catering to both internal and the export markets.”

Sign up for our Nearshore Americas newsletter:

The country was tagged with ‘good’ labels in four categories including: infrastructure,  political and economic environment , cultural compatibility and legal maturity.  In terms of cost the country received a ‘very good” rating.

Marriott pointed out that one significant element that is lacking in the Peru IT services landscape is absence of visible entrepreneurialism. “In a place like Russia you see really smart entrepreneurs who are pushing change within a country,” he said. “We’re not really seeing that focused, entrepreneurial action in Peru.”

There are good things happening in Peru, nonetheless. “Despite the typical challenges of developing countries, Peru has been experiencing sustainable, concerted economic growth for the past 10 years. That positive economic scenario is largely responsible for attracting the attention of potential service buyers and providers to this country.”

Kirk Laughlin

Kirk Laughlin is an award-winning editor and subject expert in information technology and offshore BPO/ contact center strategies.

Add comment