Nearshore Americas

2021 Nearshore Outlook: The Forces Shaping a New Industry

2021 Nearshore Outlook: The Forces Shaping a New Industry

Customers, clients and Nearshore providers will be operating in a transformed climate in 2021. In-person interactions have shifted to digital channels, and customer experience (CX) has become the determining variable for building long-lasting relationships. With budgets strained and uncertainties high, Nearshore clients will have a heightened focus on cost controls and resiliency. Providers will also have to commit to new technological solutions to build or sustain a competitive advantage.

In short, 2021 will be a busy year for the Nearshore. The impacts of the Covid-19 pandemic will still be felt long after the health crisis has been contained. Moving forward, entrepreneurs will have to channel the disturbances to power change in their attitudes and processes. Read on for our summary of the key trends to expect in 2021.


Customer Focus


While technological acceleration will define the coming year, experts agree that empathy will be the primary goal for businesses seeking to build relationships with consumers in times of crisis. Instead of replacing humans, many companies are investing in new technology – such as data analytics and AI solutions – for the purpose of fostering more empathetic customer service.

Rajiv Ahuja, the president of Startek

“The future of work is going to involve increased digital adoption but continue to be backed by humans like you and me,” said Rajiv Ahuja, the president of Startek, a BPO giant with offices in Argentina, Honduras, Jamaica and Peru.

Alongside conventional customer service training, Startek offers “Ideal Dialogue” preparation to its contact center agents. The program applies research around the science of communication to improve CX through engaging conversation.

“Empathy is where the human comes in,” Ahuja said. “We haven’t reached the stage where a bot can truly empathize with a customer, and I think we’re still some time away from that.”

Andrés Vior, country manager for Argentina at intive

End-to-End CX

Business success in 2021 will rest above all else on offering quality CX.

“It’s time for brands to look at CX as the most essential differentiator, to listen carefully to their user base and to consequently invest in CX innovation with a realistic customer-centric mindset,” said Andrés Vior, country manager for Argentina at intive, a digital services company.

Modern consumers expect frictionless journeys, whether they are interacting with a brand via an app, a desktop site, email or live chat. End-to-end CX involves intuitive design, first-rate customer service and seamless integration between channels. One recent study by Walker, an experience management firm, found 86% of buyers would pay more for better CX.

With budgets tightening in response to the pandemic, many companies are struggling to address pain points and inefficiencies across their customer journeys. Nearshore outsourcing represents an opportunity, especially for small-and-medium businesses who are looking for affordable CX management, testing and data analysis.

Social Media Management

Forrester, the market research company, predicts that digital customer service interactions will increase by 40% in 2021. For businesses, that trend will reinforce the value of developing a strong presence on Facebook, Twitter and Instagram. Customer care representatives will increasingly respond to questions and address problems through digital channels in the coming year.

“The volumes are shifting year on year,” Ahuja said. “Companies are becoming more digitally savvy to address this new generation that thrives on social media.”

The data produced across these social media channels also offers valuable insights on customer behaviour. “Our specialists are engaged in putting the CX quotient together, adding a certain amount of analytics and feeding it back to the clients in the form of actionable intelligence,” Ahuja said.

The Changing Needs of Clients

Barbara Hodge, principal analyst and global digital editor at Shared Services and Outsourcing Network (SSON)

Hybrid Capabilities

Following the disruption of the Covid-19 pandemic, Nearshore clients will demand that their BPO and IT partners have hybrid capabilities in 2021.

“What organizations are looking for now is a flexible partner,” said Barbara Hodge, principal analyst and global digital editor at Shared Services and Outsourcing Network (SSON), a professional network. “Critically, that means the ability to move seamlessly from traditional office environments to work-from-home (WFH).”

Clients will still want providers who run brick-and-mortar sites so they can enjoy the benefits of increased collaboration and creativity. At the same time, they will want to secure the business continuity benefits of working with partners who have remote work contingency plans. Every employee will need reliable home internet, an appropriate workspace and cybersecurity software in the case of a future Covid-type disruption.

Andy Kieffer
Andy Kieffer, the founder and CEO of Agave Lab Ventures

Company culture

With both Nearshore clients and providers working with distributed teams, organizations will have to focus on their company culture in 2021.

Agave Lab Ventures, a Mexican tech incubator based in Guadalajara, has ramped up its leisure and wellness program in response to the pandemic. “We kicked the Agave team building efforts into high gear,” said Andy Kieffer, the group’s founder and CEO. “We’re now doing virtual yoga, Pilates and English classes, as well as hosting a weekly social/drinking online meetup.”

Nearshore clients should not leave company culture to providers but should also take an active role in engaging with outsourced teams. That means stimulating interaction across functions and focusing on their shared mission.

Regular Benchmarking

Price benchmarking should form the cornerstone of cost-reduction strategies for Nearshore clients in the coming year. With automation driving productivity increases across the BPO and IT industries, service contracts quickly fall out of line with the market. But advances in artificial intelligence have made market price benchmarking increasingly cost effective and reliable. Price intelligence exercises can now be applied throughout the lifecycle of a contract, reducing value leaks over time. Regular benchmarking also offers Nearshore outsourcers the opportunity to explain their value to clients and can be used as a tool to build stronger long-term relationships.

Adaptive Providers

Sanja Cancar-Todorovic, head of Enterprise Procurement, Outsourcing and Vendor Management at Home Capital Group

Accelerated Automation

With organizations determined to lower operational costs, the pandemic has accelerated automation across the BPO and IT industries. “As the saying goes, ‘never waste a good crisis’” said Sanja Cancar-Todorovic, head of Enterprise Procurement, Outsourcing and Vendor Management at Home Capital Group, a Canadian holding company. “Start by focusing on process automation, AI predictive technologies for effort reduction, CX self-serve capabilities and elimination of low or no value-added work.”

A commitment to automation means freeing workers from repetitive tasks, rather than replacing them. The aim is to move them on to more complex, higher value tasks while increasing profitability. The research firm Gartner predicts that by 2024, organizations will lower their operational costs by 30% by combining hyperautomation technologies with redesigned operational processes.

Maiara Munhoz, senior technology strategist at Seventy Agency

Distributed Computing

Nearshore providers will continue to invest heavily in cloud and edge solutions as they strive for freedom from location. “In 2021, there will be a greater focus on business continuity and agility, as companies seek to be well prepared for future disruptions, as well as to continuously improve employee and CX,” said Maiara Munhoz, senior technology strategist at Seventy Agency, a brand and business design agency.

The overarching trend in 2021 will be towards growing decentralization. Companies are increasingly adopting a multi cloud strategy – using several cloud platforms across the organization to boost resiliency and lower costs.

Nearshore providers are also experimenting with different ways of distributing their data. Instead of relying on centralized data centers, companies are opting for more localized cloud models. By decentralizing in this way, IT enterprises can reduce network congestion and the potential for data loss.

Security Solutions

Security has long been a hurdle for Nearshore operators. Data protection is often the primary concern among US clients seeking to outsource, and providers must prove they can match in-house teams on that front. The issue has come to the surface following the widespread move to remote work. Many studies have cast doubt on the security of home networks and personal devices under WFH arrangements.

But the introduction of virtualization software and other cloud-based platforms could ultimately result in enhanced cybersecurity in the Nearshore. By dispersing the data rather than storing it on site, enterprises can better safeguard against thieves, hackers or natural disasters.

Stephen Woodman

Stephen Woodman is an independent journalist based in the Mexican city of Guadalajara. He has six years’ experience covering business and culture in Latin America. Stephen has been published in numerous international media outlets, including The Financial Times, BBC News and Reuters. To share story ideas, drop him a note here