The fallout from the visa hike issue is still being felt across the global outsourcing industry.  One of the obvious questions is whether large India firms will aggressively reshape their operating models to accommodate the new visa costs – or – is it just a mild bump in the road to continued expansion in the Americas?

Giving us an exclusive perspective on the issue is Ameet Nivsarkar , NASSCOM Vice-President for Global Trade, who is in charge of international and policy relationships for the India ITO/BPO advocacy group.

What long term impact do you think the visa fee hikes will bring to the way in which India outsourcing firms conduct business in the United States?

The fee per say is not going to be a large cause of concern. Our bigger concern is the direction all of this is taking. This is not the first attempt the US. Congress has taken to discriminate against India firms.

This is the first time we are seeing legislation go into law. Obviously India firms are concerned, and this certainly will add to the bottom line.

Do you anticipate that U.S. lawmakers will introduce further laws that will hamper or complicate business process and IT service delivery by Indian firms into the U.S.?

If you look historically in the past, in the last 18 months there has been many types of legislation introduced that go against India firms. There have been attempts made to completely ban access for visas for these firms.  As comprehensive as immigration reform is, we worry that we might see more issues on that front.

What is Nasscom doing to help educate and provide different perspectives for the lawmakers?

We have been working on this for some time. We have spoken to the lawmakers who passed this bill. We have made the case that US customers will ultimately be impacted.  I think this is being done with an eye on the elections – and unemployment is high, so there are political issues at play.

In your view, do you believe these actions are a determent to the long-term competitiveness of U.S. businesses?

Definitely the US is trying to stay competitive globally. Lawmakers seem to be taking a short term approach  instead of looking at the long term. The cost of doing business in the US will go up. Obviously companies will look at other options to do business. The objective the lawmakers are citing – to create more US jobs – is commendable but the reality is they are making it difficult to operate in or locate operations in the US.  It’s terribly short sighted. If you look at science, tech, engineering and mathematics- there are not enough skilled workers currently.

It is the view of Nearshore Americas that the new visa “surcharge” will become an incentive for India outsourcers to  rely increasingly on Nearshore operations to deliver services. Do you agree or disagree?

I would think so. Companies are going to evaluate all the options, whether Canada or Latin America. The visa fee issue alone is not a deal-breaker, but if we get to the point of another step that is a deal breaker, then providers are really going to evaluate their options.

What is your overall view on the value of Latin America in contributing to the success of India outsourcing firms? Are there any drawbacks you see in leveraging Latin America?

We believe the future is extremely bright. We do believe that  India will continue to  be the center of gravity in global services. Latin America can bring in language capabilities and time zone and proximity benefits and we are firmly convinced the way forward will be to have a globally distributed model – pulling on the strengths of every location worldwide.

SOURCE: NewsBlaze

I was strolling along Rio’s famous Copacabana Beach when suddenly I felt forceful yanking at my throat. I thought my assailant had gotten my backpack with valuable documents and money, but to my relief, I realised the miscreant had ripped a thin gold chain with a small diamond from my neck. He’d also gotten my faux gold earrings, all while riding a bike. “My diamond!” I screamed. Luckily he dropped the goods – I learned later that resisting can lead to bodily harm – and with the help of a wonderful ‘abuela’ (grandmother) I recovered my lost gems.

I was foolish to wear jewellery in Rio. Warnings abound in South America’s capital cities about street crime, largely committed by ‘favela’ kids so poor that theft is their only option. The threat of being accosted is real but can be avoided and there is so much to commend the continent that fear of crime should not dissuade women travellers from exploring South American treasures.

On a recent trip to South America I was rewarded with amazing treats. These ranged from learning about Inca culture to listening to music from wonderful wind instruments; from making new friends to eating delicious local cuisine; from exploring the metropolis of Buenos Aires to taking in the splendid mountains surrounding Machu Picchu and the Sacred Valley of Peru.

Here are some highlights recorded in my travel journal: “At the Arcos de Lapa, a 17th century viaduct in Rio, we watched the annual Easter Passion Play enacted by 100 professional actors. As Christ made his way through the Stations of the Cross to his crucifixion, I was so moved I wept. …The biggest attraction in Rio is the beauty of the city itself, especially when viewed from Sugar Loaf Mountain or Rio’s iconic Christo Redentor (Christ the Redeemer). … Rio is superbly situated with mountains, sea, and bay forming exquisite vistas.

“No wonder Buenos Aires is called the Paris of South America! Wide boulevards and neighbourhood cafes abound in this cosmopolitan city. … At a parilla (steak house) we ordered sirloin tip steaks and a bottle of Malbec; both melted in our mouths like butter. … In the Cemetario Recoleta everyone who is anyone in Argentine history, including Evita, has a spectacular monument. … We went to the central square, site of the weekly marches of the Madres de Plaza de Mayo and the old presidential palace, Casa Rosa, where Evita made speeches to adoring crowds. …San Telmo and La Boca are colourful, bohemian neighborhoods…the tango show in which four couples perform the amazingly sensual and difficult dance of Argentina was terrific…We took the Subte (subway) to the Museo de Evita Peron, housed in a gorgeous mansion she acquired as a women’s shelter. There are videos, photographs, the big black Cadillac limo, Evita’s clothes and more. I continue to be perplexed by this woman but one thing I know for sure: she had great taste in shoes!

“Chileans are extremely friendly and playful, easily given to laughter. …The Plaza des Armas is a lovely square with plentiful palm trees, a fountain, sidewalk artists and people milling about. … At the Palacio de la Moneda, the large government building where in 1973 Salvadore Allende died when the Pinochet revolution began, we watched the changing of the guard as they marched with the precision of New York’s famed Rockettes. … In the neighbourhood of Bella Vista, we visited one of Pablo Neruda’s three houses in Chile. Neruda called the house he designed, La Chascona, “the woman with the tousled hair” after Matilda, his third wife. It is intriguingly full of Neruda memorabilia. Bella Vista is also where the rickety funicular takes visitors to the top of Cerro de San Cristobal for a bird’s eye view of the city. I could hardly look down as we ascended but the view was spectacular!

“As we drive to Valparaiso and Vin del Mar vineyards are plentiful. … En route to Santa Cruz, mountains surround us, with occasional glimpses of snow-caped Andes. Men on horseback in traditional flat-top sombreros dot the road. Along the ‘Ruta de Fruta’ acres of vineyards form a palate of goldenrod, autumnal browns and Christmas red and green. The sun burnishes the landscape with that special light captured by Impressionists; everything is bathed with a calm aura of expectation.

“Pabel, our tour guide, meets us at Lima’s (Peru) Airport with a great bear hug and a kiss on the cheek. … The cuisine, as everywhere else we’ve been, is the best; we think Europeans must overcome their andocentric culinary ideas and wine snobbery! … Cuzco is one of the most beautiful cities I’ve ever seen. Surrounded by mountains, bustling and bigger than I’d imagined, its main plaza is a gardened centre of activity. The spectacular cathedral is representative of 16th century Spanish architecture. Shops and cafes surround the plaza, arcaded for shade. Women in colourful indigenous dress wander with their llamas in hopes of a few solas (coins) if tourists photograph them. …We make our way to the bus that will take us up to Machu Picchu, hairpin curve by hairpin curve. Verdant mountain spikes surround us; occasionally we see white-peaked Andes above the river running like a long ribbon below. …Machu Picchu and the Sacred Valley are awesome: Incredible landscapes and Inca marvels of architecture, myth, practice.”

These excerpts barely reveal all there is to see, taste, experience, and enjoy on the beautiful, friendly continent of South America.

Handy Travel Tips

NEW YORK, NY and MUMBAI, INDIA, Aug 31, 2010 (MARKETWIRE via COMTEX) — WNS (Holdings) Limited , a leading provider of global business process outsourcing services, today announced a contract to deliver analytics and customer care services for IHG (InterContinental Hotels Group). Under this multi-year agreement, WNS will deliver customer care services in several languages including German, Italian, French and Spanish to IHG’s entities across Europe. WNS is also providing a dedicated analytics team to support IHG’s consumer marketing programs.

“IHG is committed to meaningful and lasting customer relationships through outstanding customer service, relevant communications, and memorable customer experiences. Our success rests on our ability to understand the needs and wants of all our guests, allowing us to treat each guest as a valued individual. We chose WNS because of their deep understanding of the travel industry, strong customer care capabilities, insightful customer analytics, and their global delivery footprint,” said Steve Sickle, Senior Vice President for Distribution and Relationship Marketing at IHG.

“This engagement with IHG is testimony to WNS’s reputation as a world-class provider of business processes in the travel and hospitality industry. We are fully committed to IHG’s goal of making their brands the first choice for guests and hotel owners,” said Keshav Murugesh, Group CEO, WNS Global Services.

WNS delivers a comprehensive range of services to companies in various industries, including operations management, analytics, sales and customer care.

About WNS WNS is a leading global business process outsourcing company. Deep industry and business process knowledge, a partnership approach, comprehensive service offering and a proven track record enable WNS to deliver business value to some of the leading companies in the world. WNS is passionate about building a market-leading company valued by our clients, employees, business partners, investors and communities. For more information, visit www.wns.com.

WNS Safe Harbor Statement under the provisions of the United States Private Securities Litigation Reform Act of 1995 These forward-looking statements are based on our current expectations, assumptions, estimates and projections about our Company and our industry. The forward-looking statements are subject to various risks and uncertainties. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “will,” “project,” “seek,” “should” and similar expressions. Those statements include, among other things, the discussions of our business strategy and expectations concerning our market position, future operations, margins, profitability, liquidity and capital resources. We caution you that reliance on any forward-looking statement involves risks and uncertainties, and that although we believe that the assumptions on which our forward-looking statements are based are reasonable, any of those assumptions could prove to be inaccurate, and, as a result, the forward-looking statements based on those assumptions could be materially incorrect. These factors include but are not limited to worldwide economic and business conditions; political or economic instability in the jurisdictions where we have operations; regulatory, legislative and judicial developments; our ability to attract and retain clients technological innovation; telecommunications or technology disruptions; future regulatory actions and conditions in our operating areas; our dependence on a limited number of clients in a limited number of industries; our ability to expand our business or effectively manage growth; our ability to hire and retain enough sufficiently trained employees to support our operations; negative public reaction in the US or the UK to offshore outsourcing; increasing competition in the BPO industry; our ability to successfully grow our revenue, expand our service offerings and market share and achieve accretive benefits from our acquisition of Aviva Global Services Singapore Pte. Ltd. (which we have renamed as WNS Customer Solutions (Singapore) Private Limited following our acquisition), or Aviva Global, and our master services agreement with Aviva Global Services (Management Services) Private Limited; and our ability to successfully consummate strategic acquisitions. These and other factors are more fully discussed in our annual report on Form 20-F for the fiscal year ended March 31, 2010 filed with the U.S. Securities and Exchange Commission which is available at www.sec.gov. In light of these and other uncertainties, you should not conclude that we will necessarily achieve any plans, objectives or projected financial results referred to in any of the forward-looking statements. Except as required by law, we do not undertake to release revisions of any of these forward-looking statements to reflect future events or circumstances.

Q&A with HP’s Keith Kerrison

By Dennis Barker

Keith Kerrison looks at the Nearshore region not in isolation but sees it for what it really is: part of the much bigger world. He’s been involved in sourcing applications projects (“mainly SAP”) for about 15 years, back when he was with Proctor & Gamble.

He came to HP as part of an outsourcing arrangement with P&G and now, as director of the Best Shore Application Services for the Americas Region within Enterprise Services, essentially has the job of running HP’s global applications delivery system. Besides being an expert on sourcing, Kerrison is also numbered among the Nearshore Americas Top 50 Power Rankings.

We asked him about global-sourcing challenges, the Nearshore region, what it takes to make clients happy, and Canada.

What’s it like to go from P&G to a giant tech company like HP?

Obviously it’s a big change to go from a company’s internal IT functions to a company where IT, rather than packaged goods, is the business. At HP there’s the scale of depth and capability, and you can always find the capacity to get things done. You can also leverage solutions developed at HP Labs. HP has the software and other tools, the infrastructure, the technology, and the people to be able to have that end-to-end reach to deliver solutions. In a typical IT shop you’re making relationships with contractors…. You don’t have all that scale and breadth that a company like HP can offer. That scale, those capabilities, and outsourcing experience became even richer after the acquisition of EDS [in 2008].

A consultant told us recently that no one has really figured out how to operate globally. You’ve helped define a global delivery model at HP. What does it take to make that global approach work effectively?

You have to think holistically about models. Early on the company assembled a brain trust to work through process models, best practices, and so on. One of the things we decided is that global delivery wasn’t just applications delivery but also infrastructure delivery. We integrate the applications work we do with our counterparts in the infrastructure area. We define a model that integrates onshore, nearshore, and farshore. We pull resources from various regions, various functions, and we have systems for passing the baton back and forth.

You need common terminology, you need consistent language, you need consistent standards and metrics, and you need the tools to make sure that everything is consistent across a network of centers. We’ve developed consistent processes for moving work. We had global methods for applications services at HP but were able to combine that with process methodology at EDS. With EDS we picked up a lot of expertise in how to move work. Consistent processes are deployed across all our centers. We’ve invested a lot of time and training in this, educating our workforce. How we operationalize applications management should be the same no matter where it’s coming from.

We wanted more than an India-centric capability. India of course is always going to be important, but we developed an approach that lets us leverage multiple connected hubs. This gives us scale but also proximity to clients. Large multinational clients look for our capability to be close to them.

What we did not want was a collection of distinct delivery centers. We put a governance structure in place to manage all our centers as a global structure. We invested in building capabilities across centers, creating a community of people and expertise across that organization.

Our largest multinational clients might take delivery from as many as 10 different locations around the world. We’re able to put that together seamlessly. But we only use, or would only add, a location that makes sense for the client.

Everyone expects that a provider will deliver on their SLAs, but that’s not enough to make a happy customer. To be successful you need to focus on the relationship and how to bring more value to the client. More value can come in various dimensions, like innovation.

Tell us how the Nearshore Americas region fits into HP’s world.

Our model is a global model, so we need to think of the Nearshore in that way. I manage my team as part of a global system rather than strictly regional. Our centers in Costa Rica and Argentina, for example, have a role to play in serving the U.S. but they are also woven into our global delivery model. A team in Argentina might serve clients in Spain because of the language affinity, but also might give clients elsewhere in Europe a better price. We think of our Nearshore centers as part of that global model, but they might also provide a local solution. Sometimes the best place is local. Sometimes it’s best to have that resource closer to the client.

But for reasons of scale, to get the capabilities you’re looking for, sometimes you have to go to India or China. Our ability to grow resources is better in those two countries. That’s why we’ll see more growth going to those farshore locations. The Nearshore will grow because we have multinational clients who want support in their time zone or want to follow the sun, but it will not grow as fast as farshore.

Many customers are looking for “India Plus One” capabilities. India provides depth, but for reasons of business continuity, some customers may not want to have all their eggs in one location. Maybe they keep two-thirds of their resources in India but the rest in a place like Argentina. They want to have some redundancy. In the Philippines, periodically a typhoon goes through there, so you may want some resources in another location. That’s smart business.

How do the Latin America centers differ?

Costa Rica today has a strong focus around SAP as a technology and applications management. Argentina has great capability around applications development, and Java for industries such as manufacturing and transportation. Brazil has a higher cost but a higher level of capability and a higher level of maturity. They’re focused on healthcare and communications. Costa Rica has the best cost structure, with Argentina now coming close, but if you’re trying to hire a high-level developer, for example, it’s going to be easier in Buenos Aires or Rio because of the size of the talent pool. Brazil we think of in a different context. We mainly focus on leveraging Brazil for domestic opportunities. We’ve grown these centers in a complementary way. We make sure we have a network of centers that don’t cannibalize themselves.

What do you think businesses do not know or appreciate about the Nearshore region (Latin America especially)?

Many corporations would consider outsource providers or delivery centers in the Nearshore region as places to get work done for local projects. But they might not have considered how Latin America can play into a broader model, a global delivery system. People gravitate to India, China, the Philippines, but may not think about how these Nearshore centers can play a role. I’ve worked with this region. There are great people, there is great talent in this part of the world. It would be a mistake if people think of those countries only in terms of Latin American delivery. Costa Rica, for example, is closer to Houston than parts of the U.S. are.

And how about our friend to the North?

I probably started with Canada back in the late 90s with P&G, and the cost structure then was about two-thirds of the cost of the U.S. Over time, though, the cost structure has become close to the U.S. The cost advantages have slowly eroded. But Canada still has a big role to play. In the Toronto area, for example, there’s a really great talent pool. There are high-end skill sets for client-facing roles and solution architecture. If you need those resources and need them close to the client, it makes sense. We have to recognize that for things like application maintenance, it makes no economic sense to do that in Canada anymore. High capabilities but relatively high costs compared to other locations.

What are the reasons some outsourcing projects do not succeed?

Everyone expects that a provider will deliver on their SLAs, but that’s not enough to make a happy customer. To be successful you need to focus on the relationship and how to bring more value to the client. More value can come in various dimensions, like innovation. Customers expect us to have all the resources to execute the work, but they look for more than meeting SLAs. They want innovation and thought leadership, even if they don’t mention it at the beginning. They want a partner who can deliver innovation that helps drive down costs or helps them achieve their business goals.

The biggest mistake is to look at outsourcing as a transaction. Customers are expecting more from a partner. We have to strive for service excellence but also a strong relationship with the client. If we wait for the client to ask us for that, we’re too late.

How do you think outsourcing is going to evolve in the next few years?

Everyone has played the labor arbitrage game. There’s going to be a bigger focus on leveraging software tools and automation to eliminate work, getting more for less. There’s a lot of noise right now around how cloud services will change the game. People will be thinking less about services and where they’re delivered from and be more interested in quality. Companies that will be successful are the companies thinking about those challenges today. How do you automate, how do you integrate? How do you streamline and virtualize that whole thing, service delivery from end to end? Where services are delivered from will become invisible.

SOURCE: BillingWorld

Data from TeleGeography’s GlobalComms Insight Research Service project that telecom service revenue in Latin America and the Caribbean will grow from $122 billion in 2009 to $143 billion in 2014, led by the wireless sector. That signals a good growth opportunity for carriers in the region, as well as those looking to buy stakes in existing operators.

Telecom revenue in Brazil, Latin America’s largest market, will top $55 billion in 2014, followed by Mexico, with $25 billion, and Venezuela, at $13 billion. Brazil is growing revenue at 39 percent and Mexico at 17 percent. Venezuela is a distant third, at 9 percent.

Total mobile revenues are projected to grow just over 4 percent annually, while revenues from fixed-line (broadband and voice) services will grow just over 2 percent annually. Revenues will be driven by wireless and broadband subscriber annual growth rates that average 6 percent and 15 percent respectively. While this is far below the stunning growth rates achieved over the previous five years, it’s well above projected growth rates in Europe and North America.

The continued growth of telecom in Latin America is one factor driving recent M&A activity in the region, despite the existing high level of concentration. After America Movil’s planned acquisition of Carso Global (Telmex and Telint) and Telefonica’s acquisition of Portugal Telecom’s stake in Brazilian mobile operator Vivo, the two companies will generate 32 percent and 27 percent of total Latin American telecom revenues, respectively.

Latin America’s mobile market specifically will continue to perform strongly, according to research firm Euromonitor, with mobile subscriptions taking over fixed lines as the preferred method of communication. In 2009, mobile subscriptions penetration totaled 88.2 percent of the population. That’s compared to 55.2 percent in Asia Pacific, 90.4 percent in North America and 50.6 percent in the Middle East and Africa. Wireless in CALA has benefited from geographical hurdles to fixed line expansion and cheap deals for mobile voice and mobile Internet. In 2009, fixed line penetration comprised only 18.6 percent of the total population.

Euromonitor said the market has strong growth potential, reflecting reviving economic growth and improving income levels, as well as deals targeted to attract low-income consumers. Expanding the mobile market will benefit consumers and the business environment by offering on-the-move telephone and Internet access, while potentially boosting telecommunications profits.

Nokia Oyj, AT&T Inc. and Verizon Communications Inc. are urging the U.S. government to ease rules that keep them from operating in Cuba even after President Barack Obama loosened telecommunications regulations last year to promote democracy on the communist island.

Nokia, the world’s biggest mobile-phone maker, is urging the U.S. to ease its 47-year-old trade embargo so it can sell handsets to Cuba. AT&T and Verizon, the largest U.S. wireless providers, urged regulators to make it easier for U.S. companies to directly connect calls to and from Cuba.

The companies’ pleas come after Obama said in April 2009 that greater contact with the outside world would reduce Cubans’ dependency on President Raul Castro’s regime. Still, other regulations prevent companies with U.S. operations from entering the market, according to a July report by the Washington-based Cuba Study Group, which advocates for an open economy.

“We don’t understand why the regulations stopped where they did,” Jose Martinez, head of government relations for Latin America at Nokia, said in an Aug. 20 interview from Miami. “There doesn’t seem to be a desire at the bureaucratic level to change the rules to allow cell phones.”

Cuba has the lowest mobile-phone penetration in Latin America. As recently as 2008, about 20,000 to 30,000 people, mostly foreign diplomats and senior officials, owned mobile devices. That number has grown to 800,000 since Castro lifted a ban on most people owning them, the Cuba Study Group says.

Roaming Service

AT&T and Verizon may be interested in setting up roaming service for U.S. customers who visit the island as a first step into Cuba, said Jose Magana, a senior analyst at Pyramid Research in Cambridge, Massachusetts.

The country of 11.4 million people could become the largest telecom market in the Caribbean, topping Puerto Rico’s $1.6 billion market, Magana said. If the market remains mostly closed, annual revenue could still reach $400 million by 2013 from the current $80 million, he said.

Magana said roaming service in Cuba wouldn’t have a measurable effect on earnings for AT&T or Verizon.

Nokia fell 1.6 percent to 6.72 euros in Helsinki at 11:03 a.m. New York time. AT&T rose 1 percent to $26.90 in New York Stock Exchange composite trading while Verizon increased 1.4 percent to $29.85.

Obama, in an April 13, 2009, memorandum lifting travel restrictions to Cuba for Cuban-Americans, directed the U.S. government to allow companies to provide communications services to the island, saying it would “decrease dependency of the Cuban people on the Castro regime.”

Little Changed

In practice, little has changed, as companies wishing to operate in Cuba risk violating sanctions still in place, said Christopher Sabatini, policy director of the New York-based Council of the Americas business group. These include the 1992 Cuban Democracy Act that prohibits investment in Cuba’s telecommunications network.

“It’s so self-defeating,” said Sabatini, who helped prepare the Cuba Study Group report. “It’s like we just sent them a toy cell phone and said, ‘This will be great. Use this.’”

Cuba’s Foreign Ministry didn’t respond to a request for comment.

AT&T and New York-based Verizon wrote to the Federal Communications Commission this year urging it to grant an April request by TeleCuba, a Miami-based company that sells calling cards, for the FCC to waive rules that fix a maximum rate a U.S. provider can pay the Cuban government for connecting calls.

Market Foothold

The wireless providers’ letters may be aimed at supporting their interest in setting up roaming service in Cuba without taking sides in a politically delicate issue, said Christopher King, an analyst at Stifel Nicolaus & Co. in Baltimore who covers Verizon and Dallas-based AT&T.

Establishing a foothold in Cuba could be lucrative because mobile phone penetration may increase to 80 percent of the population in four years, from 10 percent to 25 percent now, should providers be allowed to invest in the market, King said.

AT&T has no specific commercial plan associated with the letter, spokesman Michael Balmoris said. Verizon spokesman Jeffrey Nelson, and John Taylor, a spokesman for Overland Park, Kansas-based Sprint Nextel Corp., declined to comment on whether their companies were seeking a roaming agreement for Cuba.

The branch of the U.S. Treasury Department that enforces trade sanctions allows U.S. providers to pay Cuba for services including roaming, said a Treasury official who declined to be identified, citing agency policy.

FCC Rate Cap

Still, under current FCC rules, U.S. providers can only offer direct calls to Cuba and roaming service if they pay the Castro government a fee no higher than 19 cents per call, said an FCC official. That prevents U.S. operators from offering these services because Cuba demands 84 cents a call, according to the official, who declined to be identified because of the sensitivity of the issue.

The FCC is considering whether to waive the rate cap, the FCC official said.

U.S. rules also keep Nokia from selling handsets in Cuba, even though it is based in Espoo, Finland, because the unit that exports to Latin America is based in Miami, Martinez said.

“There is an enormous amount of frustration that the rules weren’t clear enough,” said Judith O’Neill, a telecom lawyer at Nakhota LLC consulting firm in New York.

Tommy Vietor, a spokesman for the Obama administration, declined to comment, as did State Department spokesman Philip Crowley.

Castro Government

While the entry of U.S. companies also hinges on the willingness of Castro’s government to let them in, the Cubans would probably be open to the idea because they want the inflow of cash amid an economic slump, Sabatini said.

Cuban state phone company Etesca, based in Havana, has a monopoly on all fixed-line and mobile services. Milan-based Telecom Italia SpA has a 27 percent stake in the company.

“The rules are so unclear,” Ralph de la Vega, AT&T’s chief of wireless, said in an Aug. 20 interview. ‘Until there’s real change there’s not much we can do about it.”

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 than in previous years. A new report from Frost & Sullivan, “Latin American Contact Center Outsourcing Services Market 2010,” finds that the market earned revenues of $7.5 billion in 2009 and estimates revenue will increase at a compound annual growth rate of 9.7 percent during the 2009-2015 period.

Market Overview

Despite the economic performance of the region during 2009, the contact center outsourcing services market in Latin America is still maturing and witnessing significant growth rates. Irrespective of the country where their operations are based, some providers rely heavily on their offshore business, while others depend exclusively on their local customers. We have identified four main categories of contact center outsourcers in this market:

1. Large multinational companies or U.S.- or Europe-based companies

1. Regional Latin America-based companies (with presence in two or more countries in the region)

1. Large, locally focused Latin America-based companies (with presence in only one country in the region)

1. Small and medium Latin America-based companies

The marketplace has proven to be very fragmented, and competition is fierce. There are 29 global or foreign (U.S.- or Europe-based) outsourcing firms as well as 21 major local or regional companies that dominate the scene in Latin America. In 2009, those 50 companies comprise more than 76 percent of total market revenues. The contact center space remains dominated by major global or foreign providers and large, locally focused Latin America-based companies (with Brazilian companies owning the largest share). Regional companies and a host of small- and medium-size local companies divide the remaining share of the industry.

The number of outsourced positions in the contact center market in Latin America is expected to grow at a CAGR of 9.6 percent between 2009-2015, with nearly 650,000 outsourced positions by the end of that time period.

Trends in Services

Most clients still consider outsourcing from a cost-advantage perspective, but providers have started to see their role as going far beyond the traditional services they’ve  been offering. They are looking to participate in more complex enterprise processes, such as billing, accounting, financial reporting, hiring and recruiting, legal services, and so on.

Contact center providers are repositioning themselves to offer more complex BPO services. Many outsourcing players, though, tend to agree that most of these new, complex services are offered in the form of add-ons to existing customer-care services. While offerings are becoming more advanced in terms of value proposition, regional demand continues to rely mostly on contact center outsourcers’ traditional proposition.

As basic customer care and telemarketing become commoditized, the competitive landscape will be composed of companies that focus on traditional services and companies that have developed a larger portfolio of solutions. As a result of these trends, the number of outsourced positions in the contact center market in Latin America is expected to grow at a CAGR of 9.6 percent between 2009-2015, with nearly 650,000 outsourced positions by the end of that time period.

Offshore Market 2009: Main Highlights

Offshore services represented close to 22 percent of the overall revenues during 2009. As expected, Central America & Caribbean (CaCar) and Mexico are the Latin American regions that generated the highest revenues from offshore businesses in 2009, accounting for over 71 percent of the total revenues. Peru, which already aimed to rank fifth, had already surpassed Colombia when analyzing offshore revenue stream.

Business with the United States remains the most important for Latin America, representing 70 percent of the total offshore revenues. However, an increasing amount of revenue is coming from Spain, which accounted for more than 18 percent during 2009.

Competitiveness levels rose in the offshoring arena. Mexico and CaCar are clearly the main competitors for the U.S. market (together they represent 91 percent of the U.S. offshore businesses in the region during 2009). Argentina, Chile, Peru, CaCar, and Colombia accounted for 98 percent of the total Spanish offshore revenues. In the intra-regional offshore market, CaCar, Argentina, Colombia, and Peru represented 83 percent of the total revenues.

It is interesting to note that even though Argentina’s competitive conditions have decreased during recent years, this country is the only one that stands among the top 3 main revenue generator when analyzing each of the previously mentioned offshore markets.

Juan Gonzalez is team leader and analyst at Frost and Sullivan and a member of the Neashore Americas Power 50 Ranking.

By Linda Rosencrance

For years the refrain echoing in the ears of CIOs and IT decision makers has been “do more with less.” And in today’s economic climate, that refrain rings true more than ever.

With that mandate, the question is what can CIOs do to help their companies weather these tough business conditions? And since India is more expensive than ever, what is preventing those buyers from examining Latin America more seriously.

While labor costs may be on par with India, there are fewer cultural differences when working in Latin America. And geographic proximity makes communication easier and travel less expensive and less time consuming. Yet still many IT leaders seem to be reluctant to participate in nearshoring.  Find out what three IT executives told us about why Nearshoring is not as attractive as some of us think.

Perceptions: True or False

“I think some of the problems are the same as everywhere else—the nexus of control and part of what injures Latin America more so than other areas is the perception of government stability or instability. And also the perceptions around the various crime and the dangers rates—true or false,” said Joanne Kossuth, Vice President for Operations and CIO, Franklin W. Olin College of Engineering in Needham, Mass.

Another perception is that the Latin America doesn’t have the same infrastructure as countries where offshoring typically takes place, she said.

“If you look at China and Asia [IT leaders] think those people are really technical and they have this connectivity and they have bandwidth and those perceptions make people think they’re putting their data and their operations in the hands of people that get it,” Kossuth said. “And those are not the same perceptions about Latin America.”

Another reason companies are not jumping on the nearshoring bandwagon is because they really don’t know much about it. That’s because Latin American countries haven’t done a very good job at marketing the services that they can provide, she said.

Additionally, when it comes to outsourcing IT functions to Mexico, Kossuth said IT leaders are afraid to put their services in a place where the crime rate is high. “All we know about Mexico is what we see on the news and that’s people getting killed because of drugs,” she said. “And even if it’s not happening in the entire country and it might not be true in the area you put your services—you think it is.”

“I go to Juarez, Mexico and every time I walk over the Rio Grande Bridge I remind myself that I have no U.S. rights. So when I consider my data and processes going over into Latin America or Mexico I want to know what laws govern that data.” – Shaun Cooper, CIO New Mexico State University

Maturity Meter

Anand Ramesh, a research analyst at Everest Research, said one of the reasons that IT decision makers don’t want to outsource their IT functions to Latin America has to do with the level of maturity of the providers in that market.

“I don’t they’re reluctant to do it, it’s that they think that the [service providers] in Latin American countries are not as evolved as those in India,” he said. “They don’t think that the providers in Latin America have the same skill level in terms of talent and sophistication as the providers in India. So it naturally creates that concern in the minds of the decision makers about whether they could find the same kind of skills—the same breadth as well as depth and sophistication of skills—to be able to [handle] all the different IT services.”

Shaun Cooper, CIO, Associate VP of IT New Mexico State University in Las Cruces, New Mexico said he worries about placing protected student data in machines in other countries because, for one thing, he’s afraid he’ll lose control over that data.

“I go to Juarez, Mexico and every time I walk over the Rio Grande Bridge I remind myself that I have no U.S. rights,” he said. “So when I consider my data and processes going over into Latin America or Mexico I want to know what laws govern that data.”

Cooper said he’s also worry about the political stability in those countries.

“I remember a story about company that had some equipment in Fiji and there was a coup and all they had was about two hours to pull all their equipment out and get it on a plane,” he said. “How do I know there’s not going to be a coup [in those countries]? For me it really has to do with the laws governing the data and the stability of the country.”

But Steve Romeo, Vice President of Information Technology, Breg/Orthofix, a medical device manufacturer, in San Diego, said he’s starting to drift toward nearshoring because he thinks it’s a great alternative to doing on-premise development.

“In my case I started working with a firm in Tijuana and the beauty of that is that they’re so close we can just drive across the border to do scoping and have discussions,” he said. “but at the same they have a richly skilled development team that can accommodate everything from iPhone development to .NET development. And they have resources readily available and the talent pool is growing.”

Romeo said he’s seeing more momentum toward nearshoring especially as budgets have been reduced and turnaround is an issue.

“The challenge with offshore outsourcing is that when you try to scope something and there’s any type of scope creep or deviation or additional information is needed, it can be a challenge to have someone on the ground physically there to go through that process,” he said. “The resistance to nearshoring has always been the assumption that India has a much stronger talent pool than nearshore options. I agree that has been the case but that belief is fading now that the talent pool is growing in Mexico and Latin America.”

Linda Rosencrance is a veteran IT journalist who has been an editor and contributor to Computerworld for over ten years. (This is her first contribution to Nearshore Americas.)

By Kirk Laughlin

It’s not hard to remember back to 1995-1997, when the Internet boom began to gather some real traction. Firms like Netscape, Lucent and Cisco were suddenly red hot darlings that became emblematic of a new generation of  Wall Street investment targets. There were plenty of skeptics of course who didn’t like the price-per-earnings ratios of these companies or didn’t believe the aggressive forecasts of top executives. And then there were the very real concerns about risks and the seeming intangibility of the Internet, backbone buildouts and why broadband mattered. Back then, Google had yet to be born and the eye-ball grabbing power of search was not really well understood.

So, what does the investment climate of the mid-90s have to do with 2010 investment in Nearshore outsourcing? Plenty and I’ll explain why.

What’s We Have in Common

Fifteen years ago, investing in Internet and next-generation tech firms took some guts. Some part of you had to believe in a vision, and that explains why those who look at the world in purely rational, beancounter terms would never touch investments that had to do with the Web. They’d be happy investing in stalwart companies like Caterpillar (who revealed its HRO nearshoring journey to Panama last year) or Sears, with proven track records, miles and miles of history and the appearance of rock-solid foundations.

When you look at investment options in Nearshore outsourcing, you are seeing – from a very broad perspective – a group of countries and suppliers who have a lot in common with the Ciscos of 1995. Sure, there are plenty of Sofftek’s and Avantica’s who have been delivering Nearshore services for more than a generation, but the ‘newness’ of this industry can’t be understated. Tens of thousands of U.S. enterprises don’t know the first thing about delivering professional services out of Chile, El Salvador, Panama or Guatemala. In other words, the raw material to ignite the Nearshore firestorm has barely been gathered. But when you combine the technology underpinnings of the Internet, VoIP, and real-time collaboration tools along with the tectonic shifts going on with globalization and increasing exports out of lower cost nations, there is clearly a major upside ahead for this industry.

But you might be thinking, of course you would say that, your online business (Nearhore Americas) is built mostly around the emergence of Nearshore outsourcing. And that point would be valid. But I’m also an investor and one who is willing to take some risk for long-term reward. (I began investing in Emerging Markets back in 1997 after several trips to Vietnam, China and Thailand where it became evident that with the right governance, capital, rule of law and talent, sustained growth will naturally follow.)

Those who are currently sealing deals are destined to maximize their investments over the next five to ten years vs. those who still are waiting for a big seal of approval to appear somewhere so they are fully and absolutely confident the deal should go forward.

Risk: Front and Center

I speak to investors and outsourcing buyers all the time – and it’s remarkable how similar they sound when confronted with whether or not to take steps to invest in the Nearshore growth story. It’s almost as if they have to whip clear decades of conceived notions about Latin America and the Caribbean and, from scratch, embrace a new vision of the region that is based on 201o and beyond. In addition to recognizing the value of doing work in the region, they also have to confront the issue of fear. What are my risks? How do I know I can trust the privacy protection laws? Can I take my clients down to there on a regular basis? And what is my long term payoff?

The process of examining whether to invest should naturally involve in-depth  scrutiny. But that scrutiny should also very much include analyzing the level of risk you as an nearshore outsourcing customer are truly willing to take on. Page upon page of information within Nearshore Americas will – if we’re doing our jobs right – get you much of the basic information you would require about the markets themselves, the key in-country industry leaders and how to initiate and manage your engagements. But the next step – the one that involves committing to investing in Latin America or the Caribbean wholly depends on just how willing you are to “get in” at a time when the value is still significant.

The Real Winners

It’s interesting to recognize the fact that once buyers are active in the Nearshore market, they may actually find new providers or decide to switch county destinations. They are able to make these changes because they have achieved material advantages through first-hand experience that will drive them deeper into more value-based relationships. Those who are currently sealing deals are destined to maximize their investments over the next five to ten years vs. those who still are waiting for a big seal of approval to appear somewhere so they are fully and absolutely confident the deal should go forward.

I’m here to say that day will never come. The risk takers are those jumping on planes now to fly down to Jamaica, Costa Rica, Brazil and Mexico to get projects up and running by the fall. Fifteen years from now, who we will look back on as the real winners in the Nearshore outsourcing boom?

NEW YORK, Aug. 25 /PRNewswire/ — Award-winning digital innovation firm Zemoga announced today that it has been named to the 2010 INC. magazine ranking of the 5,000 fastest-growing private companies in the United States for the second consecutive year.  Over the past three years, Zemoga has amassed an impressive 485% cumulative revenue growth record.

Debuting in 2008 as a companion to the well-known INC. 500 listing, the INC. 5000 is the most comprehensive look at the most important segment of the economy—America’s independent-minded entrepreneurs.  Taken as a whole, the companies on the list represent the backbone of the U.S. economy.

Zemoga moved up to #619 in the 2010 rankings from its #646 position in 2009.  Last year, the company also ranked #67 in the “Advertising & Marketing” category.  In less than ten years Zemoga, with U.S. headquarters in New York City and a main office and development hub in Bogota, Colombia, has become a leading international digital design and marketing firm.  The company has produced measurable results for some of America’s most prominent firms including the A&E, HBO, Sears Holdings, Continental Airlines, Pfizer, Men’s Health magazine, Toyota and many others.

“Zemoga’s unique corporate culture and approach to innovation is paying off not only for us, but for an increasingly prominent client list.  We’re pleased that our business continues to grow aggressively, as evidenced by our record high ranking on the INC. 5000 for 2010,” said DJ Edgerton, Zemoga CEO and co-founder.  ”We’re perhaps most proud of our growth record over time, which is due to the passion and dedication our employees bring to our clients’ projects.”

Employing over 140 people across its various offices, Zemoga is on track to double its 2009 revenues in calendar 2010.  In order to better service its newest client, Pottery Barn, as well as to develop further business on the West Coast, Zemoga will be opening its second U.S. office in San Francisco in September.

With the majority of all new job creation in the U.S. coming from small businesses, the INC. 5000 is a prescient indicator of the companies and industries that are driving the economy forward.  Over the years, the INC. 5000 has identified the next generation of world-class companies, with consumer electronics maker Vizio, Internet giant GoDaddy, rental car service Zipcar, and beverage maker Honest Tea all appearing on the list in recent years.

Companies on the INC. 5000 list are ranked according to the percentage growth of their annual revenue over a three-year period.  INC. verifies all information using tax forms and audited financial statements from certified public accountants and by conducting interviews with company officials.

Zemoga will be honored along with other INC. 5000 companies at the INC. 5000 conference in Washington, DC, September 30-October 2, 2010.