The global outsourcing market’s capacity continues to expand as emerging country entrants join the fray, which was clearly evident this past week at the third annual congress held by APECCO (Associacion Peruana de Centros de Contacto) in Lima. While Peru’s contact center outsourcing market is still nascent, its capacity for long-term expansion was made abundantly clear, especially in the context of the Latin American nearshore. In addition, the vision among Peru’s outsourcing leadership to diversify into back-office BPO is wise, especially since at this point Peru does not have the same offshore front-office capabilities as many of its Latin American neighbors.
Over the course of the recent APECCO congress held in Lima, Ovum was pleased to note a growing number of outsourcing players starting to set up shop in the country. Indeed, in addition to leading local vendors such as Fortel and Falabella, the presence of global players including Aegis, Transcom, and Atento give instant credibility to Peru as a country/environment in which contact center outsourcing can flourish by addressing the local market.
This is testament to the ongoing economic progress that Peru has experienced over the past decade, as evidenced by increasing consumer incomes, low inflation, and fiscal discipline, all of which have led to a growth in domestic demand. Outsourcers have been keen to take advantage of this steady growth, and based on our discussions during the congress, we at Ovum would not be surprised to see other global players testing the waters of this country of approximately 30 million.
It is also clear that Peru does not constitute an immediate offshore delivery hub into the lucrative US bilingual market. Outsourcers were refreshingly candid with Ovum that large numbers of fluent English-language speakers currently do not exist, and this agent pool will likely take some time to develop from its current state of infancy. In addition, while the bulk of Peruvian offshore contact center outsourcing currently is performed for Spain, the ongoing decline in Spanish consumer demand is certain to reduce this market.
A more obvious target close to home for Peruvian outsourcers, however, is the Spanish-language nearshore opportunity, specifically the consumer markets in Chile and Argentina, both of which are significantly more expensive than Peru for any type of CRM work. These countries (and potentially others in the region) are seen as a viable market opportunity for the Peruvian outsourcing sector.
Broader BPO Emphasis w
During the APECCO congress, Peru’s outsourcing thought leaders showed a clear desire to move toward more strategic and diversified services delivery that goes beyond contact centers. We see this as a wise decision – not only will higher-value back-office BPO service delivery provide the outsourcers in Peru with higher margins than contact center work, it will also reduce exposure to high levels of labor turnover (a hallmark of many contact center–focused outsourcing sectors). Ovum feels that the immediate challenge facing Peru’s outsourcing sector is to determine what back-office BPO functions could best be serviced from the country and the optimal timing for making this push. Carefully planning the types of functions (either niche or broadly diversified) to provide and how soon to provide them will be just as important as having the will to succeed.
Peter Ryan is a leading analyst with Ovum and contributes regularly to Nearshore Americas. This article is reprinted upon permission of the author.