Steve Rudderham, VP, Client Engagement, Capgemini: “Problems culminate when customers and providers don’t spend enough time with each other”

Julia Santos, Director, Worldwide Strategic Outsourcing, Johnson & Johnson: “My way of communication and dealing with providers in India and LatAm is different. Because of the culture in Asia – it’s hard to just say no.”

Maurizio Velasquez, Commercial and BDVP Teledatos S.A., based in Colombia: “From a Latin perspective –we like to have the human approach.”

When people talk about “culture” in offshoring, what are they really getting at? It’s a question I’ve been thinking a lot about lately as I listen to people talk about culture as a fundamentally critical issue that has to be managed, watched over and in the most direct way – overcome.

Culture can, let’s face it, really screw up an offshoring deal. When I lived in Japan several years ago, I had my own taste of cultural “adjustment” learning quickly that if you’re out on the street and lost – people would rather give you bad directions than deliver the embarrassing news that the place you were trying to get to is far, far away.

Take that example, enlarge it and install it into a business environment, where both providers and customers may rely on increasingly sophisticated processes and modern technology tools to conduct business, but the sum result of that collaboration is intended to be something the client values and the provider understands thoroughly.

How Widespread are Cultural Breakdowns?

Research released recently by Boston-based Vantage Partners shows that culture is an issue that has to be reckoned with head on. The expanding gap between client expectation and provider service delivery – often referred to as “scope creep” – is at the heart of many deals that go bad.

“The top four consequences of scope challenges — service complaints from end users; time wasted on conflict, revisiting decisions; scope overruns; and missed deadlines — are not merely results of the mishandled scope discussions that plague any outsourcing deal. They can be directly traced to the extent to which commitments, tolerance for ambiguity, directness of communication, and acceptance of risk pose challenges. A cultural reticence to say “no” to out-of-scope requests, for example, can easily lead to missed deadlines. When these cultural challenges are not adequately addressed, the impact of service complaints, wasted time, scope overruns, and missed deadlines is significantly higher than in onshore deals,” states Vantage’s report on Managing Scope in Offshoring Relationships.

A few months ago, Chris Disher, Central America chapter president of the IAOP (International Association of Outsourcing Professionals) hosted and moderated a web seminar that tackled this very same issue, and the discussion was quite illuminating.

The guest speakers, including Julia Santos, Steve Rudderham, Maurizio Velasquez (quoted above) and Danny Ertle of Vantage Research (also Governance Chair at IAOP), each shared their own perceptions of what culture means to making offshoring work. Here are more of their thoughts:

• Rudderham: “Every customer that I have had come down to our site in Guatemala has said, “This is not what I expected. It’s a lot more modern.”

• Disher: “We see some gaps we should pay attention to in improving the quality and service delivery between customers and providers”

• Santos: “My experience in LatAm is it is a very collective culture where as opposed to the US, we are individualistic. In Brazil, they put a lot of importance in workplace socialization practices, they even do business on coffee breaks.  They are much stronger about relationships – their culture is more energetic and excitable. To get the most out of the relationships I have to get into that mind-frame.”

• Velasquez: “In LatAm we are more comfortable confronting conflict that in India.”

• Disher: “I think the time zone plays huge [between LatAm and India], especially for US customers to do same day operations. There is a preference in India for some level of informality – but because of reliance on telephone or video conference, those things seem to create more formality.”

• Santos: “In Asia, if they say to you  ‘I can’t do this’ they mean it. If they say ‘yes’ in LatAm – you need to look at that twice. They tend to be more optimistic. For Asia they tend to be more pessimistic.”

• Rudderham: “Culture difference is minimized with strong governance.”

• Ertle: “The reality is as teams become more globalized – we’ll all have to deal with this. Maybe it will get easier as we get to know each other.”

• Santos: “It’s truly a point of view. In order to overcome the cultural challenge you really need to embed yourself in that culture. It truly is a two way street.”

Final takeaway:

It takes time to understand a culture just as it takes time to develop sufficient trust in another human being, no less a business partner. Investing in offshoring is often looked at as cost-driven exercise. Approaching offshore deals through that lens will undoubtedly lead to trouble when the core of the relationship is in fact based more on backgrounds, communication styles, customs and ways of doing business. A few flights on Taca Airways, Continental or Spirit to your prospective provider in the Americas will provide important insurance against breakdowns later on. That’s not a guarantee, but it’s truly the right place to start. What do you think?

By Karina E. Cuevas

Bogota employs over 30,000 people in the contact center industry

Plenty of heads shook with dismay across Latin America, and particularly in Colombia, when Bogota was labeled as the riskiest outsourcing destination in the world for 2009, according to publishers of the Black Book on Outsourcing.

Lots of rankings come out annually about outsourcing providers, specialty areas, regions and cities – but this particular announcement seemed to be so at odds with reality that it triggered a slew of condemnations across the Internet and raised serious questions about the methods used by authors Scott Wilson and Doug Brown. (For further opinion, see Nearshore Americas’ reaction here.)

Modern City on the Rise

A city that generates over $250 million annually in the call center/outsourcing industry can hardly be called a dangerous investment option.  “It [Bogota] has a big and modern economy with over 500,000 college students, a major international airport and the advantage of moving more cargo in Latin America [than any other country],” says Vladimir Ramirez, Managing Director of International Development Group, a management consulting firm with operations in Colombia, New York and Chicago.  “It was number one in foreign investments last year (in LATAM) making it the first port of entry in Latin America and having both Colombian and international Spanish call centers located in Bogota.”

With facts like these, it’s hard to believe the negative comments on Bogota, but Black Book of Outsourcing doesn’t stop there. It places Bogota under the radar as a dirty and polluted city with an immature legal system.  When contact about the report, authors Scott Wilson and Doug Brown did not respond to questions.

“Many people know very little about Latin America and nothing about Colombia, so I don’t know if those people have ever been here or where they get their data,” says Ramirez. “Colombia, within its political context, has never had a coup d’état, it has only entered in a recession once at the end of the last century and from a public order point of view it is no more corrupt than India, Indonesia and other countries in Latin America.”

Teleaccion: Training Plays a Key Role

Colombia counts on the expertise of a consulting and training company, unique to Latin America, called Teleaccion.

• It’s a 21-employee institution specialized in improving technology and BPO management within the country and nine other nations around Latin America.
  
• It has focused on three primary countries of growth for the call center market, including Colombia, Peru and Venezuela.
• “We have trained around 23,000 people within 157 contact centers in Latin America,” says Patricia Alzate, General Manager of Teleaccion. “We work for Latin American reality, not for American or European cultures. Our method is a practical and simple one that has showed great results.”

According to Ramirez, Colombia is a market waiting to be discovered by the international community.  Currently there are around 120,000 employees within the call center industry.  The largest call centers are located in Bogota which employs around 30,000 people. The country, with seven distinct regions, offers over 12 cities in which to base a company.  In five years, the call center/outsourcing industry is expected to generate $2.5 billion in revenue for the country.

Colombia has over 20 contact centers around the country all with different levels of success. Teledatos, located in Bogota, ranked number two in 2008 accounting for 13 percent of the market revenue.  With 15 years of history, Teledatos has become a leader in domestic services and has an open door policy for international business. They focus on the health care sector, air and land transportation with their services delivered mainly in Spanish, but also in Portuguese, English and Papiamento (the official language spoken in the Caribbean islands of Aruba, Bonaire and Curacao).  It has a consistent portfolio of loyal clients, one that has maintained a 14 year long business relationship and others that see their quality in customer service and have stayed for over four years and counting.

Over 55 Clients Served

“Teledatos is born in Medellin and then in Bogota, being it the capital it went on to be part of the growth strategy,” says Mauricio Velasquez, Commercial and New Business Vice President. “We employ around 6,200 people and service 55 companies from Europe, the United States and Latin America.”

Profile: Mauricio Velásquez M.

Commercial and New Business Vice President of Teledatos

Systems Engineer of EAFIT, Specialized studies in Management in Universidad Pontificia Bolivariana and in Direct Development in INALDE.

He is a professional and numbered member of the International Association of Outsourcing Professionals – IAOP, USA.

He was Manager of Business Development with an emphasis on Outsourcing for HP in their region MCA (Multicounty Area), Director of Sales for business lines of Telecommunications for Unisys in Puerto Rico, Project Leader of IBM, among other related positions within outsourcing in technology.

Since 2009, he is the Commercial and New Business Vice President of Teledatos S.A. company that thanks to the strategic vision of its management team, it has leader the transformation of the Contact Centers in Colombia, transforming them in to one of the most strategic sectors of development in the country.

In the national market they place as number one when it comes to number of employees and annual capital.“Latin American culture is very easy and it’s not the same as in Pacific Asia because they have a barrier which is the English language,” says Vasquez. In Latin America we speak English and we weren’t born with it as a main language, so for companies like Samsung or LG that cater to the Hispanic population it would be easy for us to take care of their needs in our language, but for Indians to learn Spanish would be a very difficult process.”

The Colombian government is taking English language training seriously and is developing incentives to bring more qualified workers into call centers and outsourcing.

Government Steps Up its Role

“For this sector and with the help of the Department of Economic Development and the local government of Bogota we created a program called Talk to the World that is currently training 575 future employees in English and we expect to train 10,000 more in the next four years,” says Monica Ramirez Hartmann, Investment Officer of Invest in Bogota, a nonprofit investment promotion agency created by the Alcaldia Mayor de Bogota and the Bogota Chamber of Commerce.

According to Hartmann, Invest in Bogota together with other government institutions such as Servicio Nacional de Aprendizaje (SENA) is training and helping employ as many people as they can within the contact center industry regardless of their career choice. They want to attract as many foreign investors as possible by offering them the best customer service at a low price and therefore making Bogota grow from its 60 percent annual revenue within the industry.

“Colombia is a country that for 20 years has had a bad image, but today’s situation is not the same, it’s a problem on how you perceive things and reality,” says Ramirez Hartmann. “This is the least expensive country in Latin America when it comes to payroll, infrastructure and telecommunications and it’s all very effective, they don’t offer any problems to companies. We are also in a great geographic position compared to India and the Philippines, since it’s a city where all the major airlines arrive making it therefore a convenient destination.”

Karina E. Cuevas is a contributing writer to Caribbean CRM Central. She is based in the Dominican Republic and can be reached at: kecuevas@gmail.com