Gartner reports on worldwide outsourcing markets and trends show that Latin American economies are emerging as a prominent location for the outsourcing sector and are expected to see a growth of 14.21% by 2018. India, China, the Philippines and a number of other Asian countries, along with a few in Europe, have so far been market leaders in outsourcing. Nearshore economies can however gain a serious advantage in comparison with other geographies since they fall in the same time zone as the United States and Canada.
Apart from aiming for the BPO market, Latin American countries are also aiming for high-end technology-centric jobs such as Knowledge Processing to take advantage of their specialized workforces. According to the Everest group research report, the entire outsourcing market in the LATAM region is pegged at around US$700 to $800 million a year and growing.
Latin American countries score high in the following metrics:
Strong value proposition: Latin America still provides a very cost effective pricing structure which companies can leverage.
Language skill set: Several companies looking at Latin America as an outsourcing destination are looking for strong Spanish language skills. Latin America is the only region in the world that provides a trilingual workforce; one that speaks Spanish, Portuguese and English. The huge Spanish-speaking population in the United States also gives the LATAM region a distinct advantage.
Location advantage: Physical proximity to the United States gives Latin American countries added value as outsourcing destinations since they fall in almost the same time zones as the U.S. and Europe. This is a distinct advantage in today’s age of agile development.
Despite these advantages, there are a few significant challenges that the Latin American countries have to overcome. Companies looking at investing in the LATAM region expect that delivery and project management will be aligned with global standards. These emerging markets also need to ensure that they provide more value from resource outlays via higher efficiency and productivity from the workforce.
The pertinent question thus becomes, what can Latin American outsourcers do to stay ahead in this game?
Focus on Efficiency
Latin American companies need initiatives to drive efficiency across all operational aspects within the organization. Some of the key contributors to drive efficiency will be:
- Faster call resolution
- Delivery quality with less rework
- Low average handle time
In order to achieve this, it becomes imperative that outsourcing service providers are able to identify, analyze and quantify the difference between ‘actual’ efforts versus ‘expected’ effort. By transparently measuring productivity metrics organization-wide, companies can ensure optimal employee utilization by identifying individual employee productivity capacities and limits.
Higher Workforce Engagement
It is acknowledged that an engaged workforce is more productive and efficient. In order to drive employees to deliver better customer experiences, companies need to have key performance indicators aligned to business needs that are measurable and can adapt to continuous improvement initiatives. Investing in measuring work over time helps companies tackle issues and manage workforce productivity to drive maximum throughput without compromising on work-life balance.
Efficient Resource Management
Inconsistency in resource and workforce utilization can impact outsourcing the service provider’s bottom lines adversely. Management needs to correctly assess team strength and skills required to deliver a project efficiently as well as ensure sustainability. Employing effort analytics to measure workforce deliverables helps management balance workloads and prioritize deliverables to support committed timelines. Using a calculated approach towards resource allocation will help these companies reduce non-productive bench strength and thereby reduce negative overhead costs.
To transform the skilled workforce to drive competitive edge, outsourcing companies need to incorporate industry best practices and invest in process management initiatives. Employing tools that help the outsourcing companies identify process gaps as well as eliminate redundant steps help in time and process management, thereby facilitating timely delivery and eliminating budget overruns.
IT outsourcing companies can create a differentiated service experience by investing in tools that align with process improvement initiatives, help in prioritizing workforce capabilities and skill alignment, manage complex business processes and ensure sustainability and workforce balance.
In conclusion, it is fair to say that that we may be witnessing the take-off of the Latin American outsourcing industry – just a few considered moves and names from the region may well figure among the giants of the business worldwide in a few short years.