eSourcing Could Provide Colombia with the Opportunity to Stand Out in BPO

Javier Carranza Tresoli explains how eSourcing companies in Colombia could leverage unique operational models to differentiate the market from Nearshore competition.

esourcing

A clear majority of companies in Colombia’s eSourcing sector are composed of call centers and other low added value electronic outsourcing businesses. However, there is still a good deal of serious providers that are consistently adding value based on the knowledge picked up during their experiences.

In its current state, this is not enough to differentiate the market from other Nearshore players with more established BPO and outsourcing industries.

These types of initiatives are exactly the ones that need to be supported by Bancoldex and other government digital transformation programs to increase Colombia’s eSourcing opportunities

As BPO takes Root and Blossoms, Differentiation Becomes Key

Looking at Colombian BPO from a wide angle, the most common cases of outsourcing are in customer support services, payroll outsourcing, and financial process outsourcing. Although there are other specialized outsourcing services in very different areas, such as the banking and aerospace industries, most of the industry is centered on customer and personnel management.

The outsourcing industry in Colombia represents more than 1.2% of the national GDP and its annual sales reach $16 billion. The country has around 300 BPO firms and at least three unionized groups representing companies in the industry.

There are some signs that the Colombian BPO industry is heading toward sophistication as it reacts to growing competition. Evidence suggests that the domestic market is becoming increasingly more attractive for investors who are interested in better and multifaceted solutions. Furthermore, following the stability brought about by the recent peace agreement, economic signs point to more BPO investment pouring into this South American county.

As more firms converge on the market, sooner or later a mechanism of differentiation will need to be enacted in order to succeed. It will no longer be enough to have the best technologies and promote aggressive innovation, but a certain level of excellence will be necessary to remain in the market.

This is why many large BPO firms in the country are now incorporating eSourcing on an increasing scale.

Adopting a New Model

One of the most advanced technological models for outsourcing services is the Electronic Sourcing Capability Model (eSCM). Designed to work with any type of outsourced service that uses IT as a key component of the delivery, the eSCM model defines a set of 84 best practices that help sourcing organizations manage and reduce their risks, as well as improving their capabilities across the entire sourcing life-cycle.

The eSCM framework was developed by ITSqc at Carnegie Mellon University in order to improve the relationship between IT services providers and their customers. These services can be very different, ranging from IT outsourcing, IT hosting, application development and maintenance outsourcing, to networking services and BPO. There are currently three eSourcing companies in Colombia using the eSCM model: Heinsohn Colombia, Carvajal, and Atlantic International BPO.

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The model, in a similar way to the CMMI standard, establishes five levels of proficiency and can certify suppliers and customers independently. One of its advantages is that it can help eSourcing providers achieve excellence in outsourced customer care services, software development, data center management, and Big Data Analytics.

The model has been quite successful among certified providers in Latin America, especially Argentina, Brazil and Mexico. Furthermore, a large Colombian customer service BPO is currently undergoing a level three evaluation. Among the more influential BPOs and ITOs certified in the region that have applied eSCM are Hinduja Global Solutions (HGS), Capgemini, and IBM.

Colombian Opportunity

Most eSourcing organizations in Colombia think that having just an ISO 9001 quality certification is enough to be differentiated from the flock. This is not only because they are looking to minimize the costs of an intrusive certification process, but also because they are not really exposed to the global market or actively looking to broaden their target markets. This in turn is related to the lack of more focused official policies, which are missing the point of differentiating the local good services in the regional context.

Colombia has gone a long way to develop the local eSourcing industry. The government has a clear determination to allocate resources that promote the digital processing and delivery of services, as well as to strengthen the exportation of services.

Nevertheless, insufficient results show that the certification of inspiring eSourcing initiatives in the local industry are more of a promise than a reality. The country has to focus more on this in order to differentiate Colombian services from those of other countries.

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