Guatemala Gains Traction in English-Language Voice

Although Guatemala is probably better known for its Mayan culture and history, a concerted effort to establish itself as a player in the nearshore contact center space is …

Although Guatemala is probably better known for its Mayan culture and history, a concerted effort to establish itself as a player in the nearshore contact center space is beginning to show tangible results. An impressive string of recent wins, attracting some of the biggest names in global BPO, indicates that the country may be on the right track. Global cruise operator Royal Caribbean has inked a deal with Xerox to move its multi-lingual British call center to Guatemala as part of a consolidation from 11 to three call centers, with the remaining two housed in Romania and The Netherlands. Allied Global is building a major Guatemala City expansion projected to provide 4,500 jobs – specifically serving English-speaking markets – within a year, and Mexican outsourcer KIO networks is reported to be moving forward with its second Guatemala data center.

Priming for Future Growth

Guatemala is still an up-and-comer in the BPO and high tech industries, however. The only way to overcome either misperceptions, or simply a lack of perception as enterprises evaluate future sourcing locations, is through a multipronged development effort, according to Maria Zaghi, a business development executive with Campus Tecnológico. Created in 2008 and located in “Cuatro Grados Norte,” the nascent technology corridor pushed by the Guatemalan government, the Campus Tecnológico is the first technology park in Guatemala and includes over 100 high-tech companies serving external markets. “More trained professionals, coordination and collaboration between actors (companies, professionals, government, universities, etc), more certifications and work methodologies, and more overseas marketing,” are the necessary ingredients to further BPO and IT sector development in Guatemala, according to Zaghi. “I think we need to apply more of the technology park experience we have had in Campus Tec in other cities and this is on the way. We are getting visitors and companies from Honduras and El Salvador.”

Learning the Lingo

There are always multiple factors in rapid industry-sector growth in any given market, but a key ingredient for Guatemala appears to be the country’s concerted effort to educate its very young population in both technology and English.

“At the university level there are some excellent, excellent technical schools – Galileo university, Del Valle University – that are really producing top-notch talent and are at the level of many, many international technical schools,” says FUNDESA Vice President and Walmart Central America board member, Salvador Paiz. FUNDESA is a nonprofit organization supported by Guatemalan entrepreneurs to promote sustainable, long-term economic development, democracy and the rule of law. Among other functions, the organization serves as an information clearinghouse, economic think-tank and support organ encouraging foreign investment.

“FUNDESA does several things, we monitor the various indicators, the indices that are tracked around the world and we try to on one hand, make sure that we are being accurately tracked in those indices, we have identified many mistakes in the way things were accounted for in the indices versus reality, so we did a lot of that, and now we are doing mostly public policy recommendations on how to improve our stance with regards those indices and what we call the binding constraints to our growth,” Paiz says.

Key Guatemala BPO sector Indicators

  • BPO Sector Income:                        $195 Million (US)
  • Sector Exports                                   $162 Million
  • Foreign Direct Investment           $78.7 Million
  • Sector Employment                        18,800
  • Sector Bilingual Employment      9,400

Source: investinguatemala.org

One of the primary priorities that FUNDESA and the government agree on is a high-tech, English-language education. All Guatemalan university students must take the English TOEFL exam. The average student score is 7.5 out of 10; substantially higher, for example, than the 6.0 score Capgemini requires for BPO and FAO employees. “It was very clear to us; we used a methodology to identify bottlenecks. At FUNDESA all the work we are doing is trying to identify those key bottlenecks that are restraining our growth, and the key bottlenecks that are restricting the amount of jobs we are creating for  youth in this country, and English turned out to be one of those  bottlenecks. There was a lot of latent demand for English speakers and we weren’t producing as many. So I think all those efforts are going in the right direction because they are addressing a key bottleneck to our development,” Paiz explains.

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Technological Know-How

While English is certainly a prerequisite in the nearshore environment, it alone is not sufficient. Without the technology skills necessary to operate in a multichannel contact center operation, F&A or procurement back-office, the BPO or SSC is left with a mere telephone operator – a position that became obsolete over a decade ago. To address this, Guatemala has launched efforts across several fronts, involving both the government and civil society. According to Paiz: “There are several things that I think are fundamentally changing in the country, starting early, even in elementary school. The other organization that I’m involved with, FUNSEPA, we’ve installed over 12,000 computers in over 900 public schools so these kids from a very early age are being exposed to computers. The objective is to cover 100% of the schools, and we are working very hard to get there. Also, the teachers are getting very proficient with the usage of computers in the classroom. We’ve already trained over 90,000 teachers on the use of computers as a teaching tool. So I think it starts way earlier than the high school and college level.”

Other steps Guatemala has taken include reforming the telecommunications sector. “I think that we also have some really good telecommunications infrastructure, telecommunications laws … We have one of the most advanced telecom laws in Latin America and I think that’s also a facilitator for this kind of a business,” Paiz says.

“(Campus Tec) has currently established strategic alliances with leading organizations that are generating opportunities. Our campus hosts the technology center for Universidad Del Valle de Guatemala, which is one of the best high tech universities in the region,” Zaghi adds.

For More Info…

For operators and investors considering Guatemala, Paiz indicates that FUNDESA is available to assist executives and analysts with due diligence, and establishing connections with government agencies and local service providers. Says Paiz, “We are a development foundation and as such we are constantly studying the landscape…and how to improve Guatemala, and as part of that effort, we have produced a lot of content. So the first thing I would recommend is having a look at our websites, the Fundesa.org.gt or mejoremosguate.org, both of which contain a wealth of data including some very, very complete industry analyses that people can take a look at. It has strengths, weaknesses, opportunities, threats—the bottlenecks, so people can get a thorough understanding of the competitive landscape in Guatemala and the pros and cons from some of that research. And then, certainly as a foundation we are available; reach out to us and we can point you in the right direction in terms of permitting agencies, and any other support that foreign investors might require.”

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