With Kingston dominating the headlines globally during the last week, many existing and prospective outsourcing firms may be reconsidering plans to deliver services from that country, wary of the negative impact that such events may have on their ability to do business and the safety of their employees.
However, Ovum believes that it would be short-sighted to abandon such plans. The island has a lot to offer in terms of cost savings and human capital, and efforts to take on criminal elements are finally coming to fruition.
Jamaica: Still Solid
The recent clashes between Jamaican authorities and rogue gunmen could be the excuse many existing investors and prospects require to bail out of a Jamaican-based delivery strategy for IT services and/or BPO. However, Ovum believes writing off Jamaica wholesale would be a mistake. From the standpoint of its population, there are a number of attributes that remain attractive for outsourcing vendors. Not only is the country’s mother-tongue English (a hard-to-find commodity south of the US border), it also possesses a diverse and growing graduate pool, and the cultural familiarity with Western consumer goods and services is very strong.
Economically, the free trade zones offered in several urban centres make the country an alternative for North American investors looking for a nearshore delivery center that is within a few hours of travel time. In addition, the cost load that an outsourcer faces in Jamaica is significantly more attractive than what they would pay in either the US or Canada in terms of wages and real estate.
Unlike many smaller locations, Jamaica has a number of cities from which service delivery can be conducted (most notably Montego Bay and Portmore), meaning vendors have more possibilities to diversify risk.
Current and prospective investors would be prudent to note that combating similar problems in Colombia has led to that country becoming a leading player in outsourced offshore service delivery in the region.
Taking Crime Seriously
Recent problems between Jamaican authorities and organized criminals are a sign that policymakers in that country are serious in regards to fighting the island’s reputation for corruption and crime. In a recent brief written by Ovum, it was highlighted that Jamaica’s annual corruptions perception ranking had regressed significantly from 2006 to 2009. This was especially concerning as several of its regional CALA neighbors actually improved their respective scores.
However, during recent meetings with Jamaican government officials, Ovum analysts were heartened to hear that ensuring an improvement in transparency and a reduction in all forms of crime would be a priority going forward. Efforts by the current administration to enforce the rule of law appear to bear this out. Current and prospective investors would be prudent to note that combating similar problems in Colombia has led to that country becoming a leading player in outsourced offshore service delivery in the region.
Future Clash
Although we believe Jamaica will remain a solid location from which outsourcers can do business, vendors are strongly cautioned to examine how future clashes of a similar nature may affect their service delivery abilities, such as public transportation disruptions impacting staff, sections of cities being declared off-limits, or negative implications on energy infrastructure. If ongoing efforts to deal with criminals are going to impact outsourcers’ delivery capacity negatively, then we advise outsourcers to have a multishore redundancy strategy in place, in which work could be temporarily shuttled from Jamaica to another location, thereby minimizing client and end-user headaches.
Peter Ryan is a leading analyst with Ovum/Data Monitor and contributes regularly to Nearshore Americas, including this piece on Cuba’s Potential as a Call Center/BPO Hub. This article is reprinted upon permission of the author.
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