Five years after exiting Colombia, Transcom is returning.
With a new delivery operation spread across two floors – which may grow to four – in Bogota’s Chapinero district, Transcom is stepping back into a market that previously dealt it a swift and costly drubbing.
The company left a greenfield Cali site, into which it had funneled a US$5 million investment, in early 2016 having only arrived in late 2014. At the time, the then President and CEO of Transcom Johan Eriksson obliquely claimed that factors outside of the company’s control had led to the decision to shutter its Cali location and leave Colombia altogether.
“The fact that we are exiting Colombia and that we are evaluating strategic alternatives for Transcom’s business in Chile and Peru reflects a major shift in market conditions. Macroeconomic changes in the last couple of years have negatively affected the viability of Latin American contact centers as an offshore delivery solution for clients in Spain,” read Eriksson’s statement.
As Nearshore Americas reported at the time, those on the ground believed that the company’s claim didn’t quite cover the facts.
But that was then and this is now, and for Don Berryman, appointed Executive Vice President for North America at Transcom in March 2020, the company’s previous misstep offers lessons to learn from.
“The company was very differently structured back then. The Iberia team, run from Spain, looked at Colombia as an offshore market only for Spanish clients. At the same time, we were in Peru and Chile; all of this was to support the Iberia region in low-cost offshore for Spain. There was no global marketing or US-English going into that location because they were separate regions then and were looked at completely differently. It wasn’t the best setup.”
Changes made to the company’s approach to Colombia and its understanding of the outsourcing proposition it represents mean there will be better luck this time around, says Berryman, who previously served as Chief Commercial Officer at Sitel from 2013 to 2019.
“We have a very different structured today; much more focused around our global clients,” he says.
Colombia: Right Fit, Right Time
Transcom’s Bogotá location is scheduled to open in April this year and an 18-strong client lists from the worlds of fintech, technology and the gig economy have already shown strong interest. Rather than outsourcing solely to Spain, Colombia will now serve the huge English-Spanish market found in the US, and also offer another offshoring location for Transcom’s continued Iberian client base. This pivot and the needs it generates go some way to spell out why the company has decided to make its way back to a country it left years ago.
“Bogotá people have strong English skills, strong work ethics and are just a very talented pool of people,” the EVP says.
During the company’s official announcement of their new venture, the benefits of Colombia as Nearshore location were made clear. Juan Hurtado, Managing Director of Transcom Latin America and the man who will be responsible for the Colombia push, explained that the country produces 100,000 graduates a year. Between 15% and 20% of these are fully bilingual.
Mauricio Velasquez, Principal of Velasquez & Company, noted that the country’s strong education system met the demand for bilingual and digitally-adept workers that US clients are demanding and that the cessation of violence that had reduced Colombia’s attractiveness to foreign investment has positioned it as an ideal candidate for Nearshore call centers. Focused government investment has been key to this. “Colombia is passion. And that passion is directed to what we do,” he said.
Peter Ryan, a well-respected industry expert and Chief Analyst and Principal of Ryan Strategic Advisory who assisted Transcom in searching out their new Latin America location, explained that the country’s legacy as an outsourcing hub puts it a step ahead of other regional nations in the post-pandemic world’s renewed Nearshore interest. Travel-weary executives will find travel to Asia or South Africa even more difficult, he said.
“In the context of 2021 and beyond, Colombia is an accessible part of the world from North America. It’s a six-hour flight from North America and this is important when executives are tired of traveling,” said Ryan. “There is a renaissance happening in Colombia and Bogotá will be at the heart of it.”
COVID-19 Risks Push Hybrid Model
Colombia has been hit hard by COVID-19 and its death toll is now approaching 60,000, but the health and safety of employees are at the forefront of the company’s mind says Berryman, who notes that the company is paying for over 10,000 employees to receive their vaccine shots in the Philippines.
In Colombia, the company will employ a hybrid model, splitting employees between the brick-and-mortar location and work from home. This hybrid model has been a mainstay within the company’s culture for the past ten years and has delivered huge success in other markets.
The hybrid model also helps reduce upfront costs, an important aim considering the large sums Transcom’s previous venture into Colombia required. Rather than heading into a greenfield site, the company has made an agreement with WeWork to use upwards of two floors entirely dedicated to Transcom employees.
Berryman explains that Transcom’s new Bogotá location will be the beginning of the company’s expansion in Latin America following Nearshore’s increased value proposition in a travel-restricted world. At some point this year, Transcom will open up another site in Monterrey, Mexico.
“Bogotá offers perhaps the most experienced workforce in the call center industry in Latin America,” he says. “We see Bogotá as a launching pad for other locations in Central and South America as we grow further into Latin America.”