By Tarun George

We all know that labor market regulations are an important part of the decision to outsource to a foreign country. They standardize the rules for employer and employee, and make factors like labor costs much more predictable. At the same time, consensus is that excessively strict regulations do not allow the labor market to function efficiently.

The question for US companies eyeing the LATAM outsourcing industry is, when do these regulations become too rigid?

The current situation in many Latin American countries could be ‘too rigid’. Enterprise Surveys, a firm that specializes in company-level data collection in emerging markets,  conducted a series of surveys done last year across 14 countries in the region to test for the effects of strict labor regulations on the workforce. The subsequent report by David Kaplan, from Enterprise Surveys, states that laws such as high legally mandated severance payments, mandatory retraining of redundant workers, and restrictions on hours worked not only prevent the labor market from operating efficiently, but also cause lower levels of workforce participation, and higher levels of unemployment. He concludes that making regulations more flexible would lead to an average net increase of 2.1% of total employment.
The irony is these laws are often union-driven requirements to protect workers, but they sometimes end up doing the opposite. “We had many employees who legitimately wanted to work two or three 12-hour shifts during the week rather than five 8-hour shifts, but because of the overtime rule we couldn’t allow that” — Maggi Williams, VP Corporate Development, KM2

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By Kirk Laughlin

The credit card industry’s way of keeping a tight lid on fraud and other slippery activity has been through the creation of “PCI” – the short-code name for a comprehensive set of rules that govern just how credit card handlers should protect card information and the privacy of cardholders.

Contact centers, especially those in Latin America and the Caribbean that deal with payments, billing and collections, are naturally prime candidates to adopt PCI. “It’s become a big topic of late and in some situations it’s becoming ‘table stakes,’”, says industry consultant Ann Harts, of HartsGroup. “There continues to be a large flow of business opportunities for call center/BPO companies who are PCI compliant… some clients are starting to migrate to this designation as a minimum or an industry standard, even though it may not needed based on the type of work.”

For one thing, more and more customers are going to demand it, says Thomas Oronti, president of Nearshore Call Center Services, a Dominican Republic based provider that employs about 1,200 agents in three facilities in the country. Oronti told Nearshore Americas recently that PCI compliance has become a top priority for his organization over the last year. “Bigger companies want to see a PCI certificate,” he says.

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By Karina Cuevas

Despite Chile being a country with a long seismic history, the 8.8 earthquake that devastated its southern region left many disconnected from the rest of the world. A lack of electricity and communication has been one of the primary concerns for business owners whose operations are fundamentally dependent on connectivity to the rest of the world.

The global services industry in Chile appears to be rebounding well from last week’s disruption, working simultaneously to reach out and service those in need and also strive to maintain business as usual.

“Our thoughts and prayers are with those affected by this earthquake. In the wake of this emergency, Sitel’s first priority is the safety and well-being of our associates,” said Dave Garner, Chairman and CEO of Sitel. “The local Emergency Committee is working to contact every associate to determine their situation, get an idea of individual losses, and find out needs and ways we can be of assistance. “

Sitel has enacted a preparedness plan, built for  these types of situations.  Among other procedures, account teams activated to make contact with customers to minimize the impact on contact center activity.

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By Kirk Laughlin

Sitel’s Nicaragua operation has been one of the “biggest success stories over the last 18 months” for the global BPO and contact center organization,  Andrew Kokes, VP of Marketing at Sitel, told Nearshore Americas last week.

That’s a pretty bold statement for a company that employs over 60,000 workers in over 140 facilities in 27 countries around the world. But, Kokes says the value of Nicaragua became so apparent so quickly that the company opened a second facility within the first year, which is a rarity for Sitel.

“It’s been a phenomenal experience,” said Kokes. “What made it a tough place to be in the 80s, has changed dramatically…  now everyone has come home and they have come back bilingual, and educated.”

In fact, about 75% of the nearly 2,000 person staff working at Sitel’s two in-country facilities …

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Nearshore Americas is on a two week mission in March to travel in-region and meet many new friends, colleagues and partners who are part of this vibrant and fast-growing community of outsourcing professionals.

I will be traveling to Guatemala City later next week to check in with Invest in Guatemala, the Ministry of Economics and about a half dozen key BPO and pro services leaders. I am always fond of returning to Guatemala where, during last Spring’s IAOP chapter meeting, the folks there were very  enthusiastic about the early development of Nearshore Americas and our commitment to being a reliable online voice and platform for the Nearshore community.

After Guatemala, I will head to Mexico City to be part of a newly reformed BPO event organized by the Mexico’s call center promotion agency  IMT and  titled: First Annual Global Contact Center Forum. I will be speaking on one subject near to my heart: Why American Companies Don’t Do Nearshoring and Why. (Follow ups will be posted later in Nearshore Americas.) I will also be moderating a panel discussion on Trends Around Nearshore/ Offshoring/Multishoring. Among the panelists are two gentlemen whose insights are consistently sharp and well-grounded: Anupam Govil, CEO Global Equations and Ruben Sorto, marketing director at Altia Business Park in San Pedro Sula, Honduras.

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By Kirk Laughlin

Years of new compliance requirements that force US companies to maintain strict standards around retention of corporate documents is creating a massive opportunity for legal outsourcing. The question is: Are Latin America outsourcing providers prepared to tackle this emerging  market?

India continues to lead the world as a legal sourcing destination, but the Philippines and South Africa are coming on strong. Part of the appeal with South Africa is the time zone suitability with UK companies who also have their hands full with regulations like Basel II. There is no question corporate legal teams would just love to be able to collaborate in real time with legal experts in the Western Hemisphere, but at the moment the Nearshore region has not made legal outsourcing a priority.

The practice of legal outsourcing is estimated to be a $2 billion market. …

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By Dennis Barker

In 1925, the intrepid English explorer Percy Fawcett journeyed once more into the jungles of Brazil to try to find the legendary ancient City of Z. Did it ever really exist, or was it lost to history? In 2010, this reporter set out to answer a much simpler question: Are Brazilian outsourcing companies developing cloud-based services?

And by cloud services, we mean: A business service or process that’s provided via the Internet, in real time; can be scaled up or down; features service-level agreements (SLAs); and can be accessed on demand, like a utility, on a pay-per-use basis. Of course that definition could be broadened to include other characteristics, but you get the idea. We don’t mean things like providing hosting services in a data center.

Cloud services and outsourcing would seem to have a natural affinity. Being able to give customers what they want on a granular, scalable basis — whether it’s BPO or infrastructure — would be advantageous to both provider and client. After all, the cloud is all about getting what you want, when you want it, however much you want, from whatever location you like.

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By Kirk Laughlin

When companies outsource work to another country there is an implicit understanding that total delivery costs will be lower than they are in the host country. But a much more interesting question is: What is the value of my spend? Or, in other words, what is the nearshore or offshore provider yielding in work produced over a specified period?

For companies, especially those that are relying on outsourcing providers to supply IT services like software development and testing, it’s a crucial question. This was one of the key topics that came up in a call I had today with Jeremy Beck, VP of Business Development at Scio Consulting, a specialty product development and IT services firm, specializing in software-as-a-service applications,  with an development facility in Morelia, Mexico. (Based on Jeremy’s description, Morelia definitely qualifies as an up-and-coming …

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By Tarun George

The Dominican Republic-Central American Free trade Agreement (DR-CAFTA) remains a controversial treaty five years after its contentious passage, yet many experts believe that the agreement is only just beginning to show its real impact.

CAFTA-DR forms one of the largest free trade blocs in the Americas, joining together Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and the Dominican Republic. Bilateral trade between the US and the CAFTA countries is valued at over $45 billion annually. But nearly five years on from when it was first implemented in the US, what effect has it had on the trade in services? NearshoreAmericas is taking a look at whether CAFTA has in fact enabled a more productive relationship between US customers and the professional services outsourcing industry in Central America.

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The area around Kingston could become a tech center, if government plans for a business park go forward.

By Kirk Laughlin

One of the bigger bellweather moments in the migration of services’ work from India to the Nearshore came over a year ago when Delta Airlines publicly let it be known that they were investing heavily in call center functions in Jamaica and “pulling out” of South Asia.

The organization benefiting most from this was E-Services Group, which was acquired by global contact center giant ACS for $85 million. Over 4,000 E-Services employees joined ACS, and Delta has remained a key customer throughout the ownership transition.

This move seems to be part of a string of developments that are putting Jamaica – one of the most convenient Nearshore locations for North American companies – higher on the radar for outsourced services. Long seen as a modest sized call center hub, Jamaica is chipping away at reforming its image into one of a fuller-scale outsourcing destination that has the talent and capacity to play at a higher level that would include finance, accounting and technology services.

“We want to move into the next stratosphere,” says Don Gittens, senior consulting officer at trade promotion agency, Jamaica Trade and Invest, who notes that the country is focused on equipping students with a kind of technology literacy that is seeing increasing demand from US corporations.

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