BPO Providers: Diversify to Survive
August 30th, 2010
By Juan Gonzalez
The economic downturn has had two contradictory effects on the outsourcing industry in Latin America. Demand from existing customers has slowed down, especially for those companies with offshore programs and telemarketing operations, but at the same time, this lower demand has been mitigated by new clients adopting outsourcing practices in order to lower costs and improve productivity.
Meanwhile, some clients have asked to freeze their contracts, while others have demanded that additional services be made part of existing deals. Providers have responded by reducing their own costs, diversifying locations (particularly the global companies), improving efficiency, and creating innovative solutions to cope with increasing client demands for better cost structures. Some providers have also been forced to reduce their prices and decrease or freeze hiring and salaries.
The Latin American market continues to grow, but at a slower pace …
Nearshore’s Big Flaw: Quality Standards
July 28th, 2010
By Jane Siegel, Ph.D., Director, ITSqc, LLC and Senior Scientist, Carnegie Mellon University Silicon Valley
Executives, strategists, and technical professionals who have goals to increase market share and bring increased sourcing work to Nearshore locations often overlook an essential aspect of customer consideration. Answering this short list of questions helps to point to a key differentiator of service providers.
Why is India continuing to be a preferred destination for ITO, BPO, and KPO service provision?
Which sourcing destinations are synonymous with QUALITY?
Where are certifications/standards widely adopted for quality systems, security and privacy, service management, software and systems development, and sourcing?
What standards provide risk mitigation for customers?
Which providers are innovative and can support business transformation?
Customers’ decisions about service providers for both ITO and BPO are aimed at achieving reliable, secure, cost-effective, competent, service delivery and increasingly they are looking to …
5 Most Common Governance Mistakes
July 23rd, 2010
Where Are Buyers Going Next?
July 20th, 2010
By Anand Ramesh, Research Director, Global Sourcing, Everest Group
In addition to the thawing of the market and the increased momentum provided by the economic recovery, 2010 is becoming a very significant year in outsourcing. Buyers across the globe will spend in excess of US$100 billion annually on IT, business process sand knowledge process services provided from offshore locations. This is the first year that the global services sourcing market will cross the $100 billion mark. While Latin America currently accounts for less than a tenth of the market, there is a lot of promise.
Early this year, Everest conducted a survey of the market to gauge what plans buyers and service providers had in store for locations across the globe. A total of 366 respondents shared their current scale of offshoring, how they planned to change the scale and across …
Brazil: At the Crossroads
June 12th, 2010
By Robert Janssen
The diversification of economic activity places Brazil at an advantage when compared to other rising off shoring destinations, especially the near shore rivals. Along with that diversification comes the development of long standing business expertise, which ever so more, has become critical for the new types of customer relationships that are beginning to become main stream, and where there is big load of expectations on client market strategy alignment by the vendors.
The “business expertise” advantage coupled with its easiness for cultural alignment makes a strong case for Brazil to always be part of a select “short list” of top destinations for off shoring IT services worldwide. The Brazilian Government has an official goal to become one of the 3 top world leaders together with India and China.
Walk the Talk
However, in order to keep pace with the …
Stop Leaks from Draining Value
June 11th, 2010
By Lynn McNeal, Partner, TPI; and Gerardo Fernández, Senior Advisor, TPI
Outsourcing can provide many benefits to businesses – including more flexibility, improved service and reduced costs – but it almost never provides these benefits at the levels that are expected. The most successful outsourcing programs typically reach only 95 percent of the service levels and cost savings that were expected – and were contracted for. Less successful programs may miss their targets by 30 percent or more.
The difference between the value and services that are contracted for in an outsourcing agreement, and those that are actually delivered, is known as value leakage. A company’s size and where it is headquartered geographically aren’t major factors it its risk for value leakage. We have seen firsthand that some midsized, Latin American companies are global leaders in managing outsourcing relationships and maximizing the …
Social Networking in Customer Interaction
June 10th, 2010
By Juan Gonzalez
Over the past several years there has been gradual growth and - since 2009 – explosive development in the use of social networking on the Internet.
While the purely-social use of networking tools such as Facebook, Twitter, Linkedin and other continues unabated, increasingly so people are using social networking to ask each other questions and share experiences about the products and services they buy and are interested in.
Various groups within enterprises, particularly large B2C enterprises, are beginning to see opportunities with social networking. Sales groups see the opportunity to find new customers, public relations groups see the opportunities for brand promotion, product development groups see the opportunity to get product feedback and new ideas, and customer service groups see both the cost savings values of customers answering each others questions and the imperative to connect with this peer-to-peer …
Why You Don’t Want Beancounters Making Outsourcing Decisions
May 27th, 2010By Ilya Bogorad
Nine out of ten business cases that cross my desk contain material errors, which often lead to incorrect recommendations worth tens of millions of dollars. If you ever wondered why two thirds of change initiatives fail, here’s your answer: many of them are based on a fallacy, a case that does not exist. The issues run the gamut from poor understanding of objectives to complete disregard for the established methods of economic analysis, from strategic ignorance to financial ignorance.
Decisions on outsourcing and insourcing are also not immune from this flawed approach. In fact, many of them are deficient for one specific reason which I will outline here.
By Ann R. Harts and John R. Roberts III
It’s never easy to figure out exactly what decision makers in contact center site selections might be thinking or what issues they deem most critical. This is especially true in today’s ever-changing economic environment. However, one thing is certain, fundamentals still matter!
Decision makers need to free up “bandwidth” to deal with this dynamic economic environment. The old adage, “you only get one chance” has never been truer than in today’s fast-paced economic development world. (Scroll to bottom of post to read Ann and John’s “Must Dos” for Latin America Economic Development Agencies.)
By Armando Moretti
After the US economic crisis, Argentina was one of the countries that was supposed to be located in the “safe zone”. This was partially true because, even though unemployment was not widespread, the IT outsourcing sector was in a kind of stand-by situation stopping the growth and waiting for the main economies to recover their balance.
I noticed and experienced on my own how some US outsourcing contracts that were ready to run or even running in an offshore mode through the Philippines and Argentina, were suddenly reversed. After this “stand-by” period, year 2010 presents a different opportunity and signs indicate that a reactivation of the market is on the horizon. But a central question remains: How hard is Argentina going to work to maintain growth in the outsourcing industry?
