Latin America needs to look at brand differentiation to remain competitive in the longer term, according to a panel at the CX Outsourcers event in Windsor, UK this week. While no Latin American or Caribbean destinations were present in the top 5 offshoring destinations list released by Ryan Strategic Advisory at the event, it was clear that LatAm had significant benefits and that many of those present had already realized those benefits through investment in centers in the region.
The Philippines remained top of the offshoring destinations highlighted in the 2019 Omnibus Survey by Ryan Advisory, but faced competition from destinations like South Africa (ranked joint second with India), Egypt (4th) and Morocco (5th).
The list was debated in the Emerging Offshore Markets panel, moderated by Andrew Wrobel of Emerging Europe. The panel featured Amita Krishna of the Greater Manchester Chamber of Commerce Asia Pacific, Kirk Laughlin CEO and founder of Nearshore Americas, Dave Rumble of CX advisory business Go Beyond, Dr Michael Zdnowski, Head of Energy at Madano, and Vadim Anikanov. (Hosting the program was Peter Ryan, one of the most respected CX strategy analysts, globally.)
Laughlin noted that Latin America continues to thrive partly because it continues to play the role of the underdog.“People don’t give it credit until they go there,” he said. “Their expectation isn’t what their experience ends up being.”
He pointed to Honduras and Colombia as success stories and noted that time zone alignment is increasingly significant. “New economy brands are driven by agility and speed and being aligned with their outsourcing partner. When you are in regular touch, you are able to move faster, whether you are Uber, Pinterest, AirBnb, all of which have significant footprints in the Americas.”
“I am happy to put Colombia up in your top five list next year, Peter!” he added.
The panel acknowledged the value of the locations in the list, but also highlighted the need to look at emerging areas. Rumble stressed that the virtualization of services will bring in other geographies that will be much more competitive than the Philippines.
Zdnowski believes that countries have to build on differentiation to remain competitive. He argued that the emphasis needs to be on the brand and on softer aspects to allow some of these countries to emerge and make a much longer impact on the industry. “When you invest in branding it shows you really care and it shows you have an attention to detail that other countries don’t have,” he said. Zdanowski also highlighted the need to look at talent pools and the kinds of skills being developed.
Political Instability Does Not Equate to Business Instability
There were lessons to be learned, too, as the panel touched on issues very much at the heart of the Latin American experience. Political instability has been an issue for much of the emerging world, yet the impact on business, from the panel’s perspective, has been minimal. Although Krishna noted that geopolitical situations in Malaysia and Egypt had thrown a spanner in the works for some companies, fellow panel member Anikanov said that while there has been turmoil, none of it has resulted in substantial change of the economic system.
“I was in the Philippines when a military coup was happening just a few streets from one of our call center sites, and still we were continuing with business. I was in Bishkek, Kyrgyzstan when there was the forced removal of the president followed by riots and looting. Our call center was right in down town, but still we figured out how to survive that,” he said. Given the recent geopolitical instability in areas of Latin America, the discussion is particularly relevant.
The need for countries to look at collaborative approaches to developing outsourcing was also a talking point. Laughlin pointed to Costa Rica, Jamaica, and parts of Mexico, which he views to be exceptionally successful, and highlighted how in each of those examples there is a great deal of collaboration between the private sector and the government or quasi government organizations. Costa Rica established their investment agencies, most notably CINDE, in the early 1980s, for example.
Krishna added the need to include academia in those collaborative relationships, to ensure that education is delivering on the needed talent pools and that work in those industries are seen as something to consider, a real option for those leaving education.
Finding Emerging Locations
When it came to identifying emerging locations, the panel was quick to point out the wealth of possibilities from Rumble’s focus on sub Saharan Africa to Anikanov’s passionate support for the Balkans.
Laughlin emphasized the need for customers to visit the geographies to get a real sense of what the locations have to offer. “Everything I have seen about discovering new geographies is driven by the buyer-customer. The customer, if they are good, is paying attention to what’s happening on the ground – education levels, safety, physical building space, telecoms, risk. You can’t just pick up the Wall Street Journal to get the answer to those questions.”
For Laughlin, Guyana was a destination to watch, while Rumble pushed for sub Saharan Africa and Anikanov for the Balkans.