Affordable infrastructure, low wages, big labor pool, and a strong work culture were all good reasons why satellite television provider DirecTV (DTV) chose Cali, Colombia as its newest Pan-American contact center hub. That’s what Site Director Fabian Saavedra shared with us during an interview earlier this week. According to Saavedra, their decision to go with Cali in 2008 has proved decisive to DTV’s success in Latin America, which currently dominates the subscription TV market across Venezuela, Argentina, Chile, Colombia, and Puerto Rico.
But with over two million customers and hockey stick forecasts, Saavedra’s 1,400-agent Cali team is being stretched to its limits. Thankfully for DTV and other contact center operators in the region, there is plenty of Spanish-speaking talent to go around.
Cali is situated in what’s known as the Cauca Valley (la valle) where, according to investment promotion group Invest Pacific, the flat geography makes it ideal and cheap to build both edifices and new infrastructure. “Our second option was to expand in Bogota, but with real estate in Cali at half the price, it proved to make more sense for us,” explained Saavedra. Likewise, the cost of living is 25 percent less in Cali (CPI data) than in her neighbor to the north, where some weary commuters can anticipate travel times in excess of two hours each way.
Quick Stats on Valle del Cauca
– 4.38 million inhabitants (2.34 million labor force)
– 86.4 % urban population
– 15.4 % unemployment
– 26.4 % of budget spent on education (higher than Bogota or Medellin)
– 20K college graduates yearly (Cali only)
– 850 yearly graduates from bilingual high schools (Cali only)
The relatively high level of unemployment in Cali was also a huge opportunity for DTV. “Monthly wages are upwards of $100 cheaper here than in Bogota, and we receive plenty of applications,” remarked Saavedra. However, DTV is not the only company with significant contact center operations there. Local service providers include Ventas y Servicios S.A., Contact Center Americas and Telemark. These firms and a smattering of smaller players employ around 4,200 agents, most of which service Spanish-only markets. Sources indicated that multinational contact center players including Convergys and Atento are also looking at Cali with interest.
80,000 students are currently enrolled in university with over 50 percent focused on either business or technology related career tracks
English Needs Work
DTV Cali has had discussions with their counterparts in the US about the potential for bilingual operations. But with the huge workload coming out of Latin America, this prospect hasn’t gained much traction. Subscription-based services require a high level of client interaction as customers look to upgrade or opt out. According to Saavedra, their Pan-American contact center focuses on four key services critical to keeping all two million of their customers happy: In-bound customer service, client retention, sales, and social media engagement.
Likewise, English speaking agents fetch a high premium in Colombia. DTV has experimented with bilingual services out of Bogota, but resources are slim and can command wages upwards of 70 percent more than Spanish-only agents. Considering Cali’s minimal exposure to international markets, the situation there is probably not much better. Yet, in defense of Cali’s capability in the BPO space, Saavedra insisted that educational programs are well-organized and in place to deliver a formidable workforce of English speakers within two to four years.
What About BPO and IT?
As a systems and software engineer by training, Saavedra also spoke highly of Cali’s potential in technology related services. “We have good universities and a healthy technology ecosystem here.” Indeed, seven out of the nine universities, including Universidad del Valle (UV), are all heavily concentrated in the southernmost zone of the city. In total, 80,000 students are currently enrolled in university with over 50 percent focused on either business or technology related career tracks.
This cluster of colleges is also organized around technology-driven services through a Cali-born initiative called ParqueSoft. As a consortium of over 300 digital art and information technology firms, ParqueSoft hosts a colorful array of startups with names like Techmovin, a software and solutions firm focused on logistics and transportation. Homegrown vendor Carvajal Technology & Services is also said to have an impressive software and applications development center in Cali.
A recent public-private initiative known as BPO City (Ciudad BPO) also speaks in favor of the region’s commitment to growing the sector. This collaboration between the city’s various government bodies, investment promotion agencies, universities, transit authorities, and enterprises has called for measures such as the establishment of a free trade zone for services, additional subsidies for corporate training, college program alignment, and others.
The True Test is Yet to Come
Cali might be considered a late entry for those actively tracking LatAm’s global services marketplace. Nevertheless, it appears to have all of the right elements to see continued growth in the sector, particularly in servicing Spanish-speaking clientele. Saavedra is certainly bullish on the region and has pushed Cali’s labor pool and infrastructure to successfully support a demanding and quickly growing international operation like DTV.
However, Cali’s ability to transcend cultures and language barriers has yet to be seriously challenged by a major bilingual operation. As Colombia continues to attract the attention of big multinationals, Cali will most likely be put to the test sooner rather than later.