business process outsourcing & off shoring (bpo&o) · 2012-01-16 · business process...

Business Process Outsourcing & Off shoring (BPO&O)Vice-presidency of Foreign Investment

August 2011

In 2009, eight sectors formulated and started implementing their

Industry business plans leading to become world class performers. In

2010, four more.

Stimulate the development of

ESTABLISHED SECTORS

into world class

performers

Promote the development of

world class performers of

NEW AND EMERGING

sectors

Promote added value, innovation

and development in

AGRICULTURAL SECTORS

2010

Graphic Communications

Cosmetics and personal care

Auto parts and vehicles

Textiles, Apparel, Design and

Fashion

Electric Energy, products and

services

Health Services

Software & IT

BPO&O Bovine Beef

Palm, vegetable oils and fats

Chocolate, confectionery and

their inputs

Shrimp farming

Roadmap for the development of the law on "Data Protection" on Colombia.

IAOP Chapter Creation of Colombia

(International Association of

Outsourcing Professionals) and

Membership of the South America

Regional Advisory Board.

Industry

Development

and

Promotion

Launch of pilot scheme to strengthen English language skills in SW & IT and BPO&O sectors. Working agreement with the private sector to identify training needs of work force

Human

Capital

Development

Legal

Affairs and

Regulation

Implementation of 20 projects for business innovation and technology services through Sinertic.

Infraestructure

BPO&O Initiatives focused on our Action Program

“…So Colombia represents a wonderful place to do business especially as we

consider serving the Latin American market…

Latin America is a huge continent that represents an amazing opportunity for

us. The business people are keen to expand, work with us and welcome us. The

governments are even more welcoming and really work – its not just lip service,

particularly in Colombia, don’t get me wrong – they have huge issues to tackle,

themselves – corruption, bureaucracy, crime – but their average middle class

citizens can lead a decent life without constant stress on some form or another…”

Pramod Bhasin

Former CEO – Genpact

P.Bhasin Blog

May 14th , 2010

BPO&O Market in Colombia

•IT Market L.A.: US$73 billion

•IT Market in Colombia: US$4.3 billion, expected growth (2010-2014) 11%

• Emerging countries considered as key players in the industry according to IDC

Evolution of the IT Market in Latin America US$ Million (2008-2010)

Source: IDC

The IT Sector in Latina America has experienced

a sustained growth

7,500 7,473 9,54015,526 16,126 18,524

41,063 40,46444,768

64,089 64,063

72,832

0

10.000

20.000

30.000

40.000

50.000

60.000

70.000

80.000

2008 2009 2010

Software Services Hardware Total

IT Industry Share Latin America

% IT Share in GDP (2010)

Source: IDC

Sales US$ Million

(2010)

Colombia, third in IT in Latin America

1.04

1.33

1.44

1.48

1.66

1.67

Peru

Venezuela

Argentina

Colombia

Chile

Brazil

IT investment in the region is focused on the

hardware industry.

In Colombia, the investment is focused on

Hardware and IT Services.

2010 LA Argentina Brazil Colombia Chile Peru Venezuela

Hardware 44,768 3,871 19,804 2,131 2,088 1,103 2,240

Services 18,524 786 10,544 1,638 924 315 393

Software 9,540 675 4,549 488 371 187 583

Total IT 72,832 5,332 34,897 4,258 3,383 1,605 3,217

Source: IDC

Colombia is a wide market that still has opportunities

for new IT companies

130125

101

77

62

44

147

132

87 9080

66

159147

113103

97

80

156

143

116107 106

82

Chile Brazil Venezuela Mexico Argentina Colombia

Per capital investment in IT, US$(2006-2009)

2006 2007 2008 2009

Revenues (sales), US$ Million

(2003-2010)

Source: IDC 2010

According to IDC, Colombia’s IT services revenues

have almost doubled since 2005

175 191 213 233 211

455 465 488552 615 686838

1,0171,216

1,318

1,638

767 820 906 992

1,224

1,894 1,9142,131

0

500

1.000

1.500

2.000

2.500

2003 2004 2005 2006 2007 2008 2009 2010

Software Services Hardware

Source: IDC 2010

Segment Share(%)

2010

Total IT Services Market 2010: US$ 1.64 billion

IT Services Market

(2007-2010)

Outsourcing, Integration and Development, fastest

growing segments

Outsourcing41%

Deploy & Support

26%

Integration & Develop.

20%

Consulting11%

Education & Training

2%Segment

US$ MillionGrowth

YoY

2007 2008 2009 2010 2007 - 2010

Outsourcing 276 384 526 676 35%

Deploy and Support 275 380 364 428 16%

Integration and

Development169 278 249 322 24%

Consulting 97 146 154 184 24%

Education and

Training21 29 25 29 11%

Total 838 1,218 1,318 1,638 25%

20 – 59

60 – 109

110 – 605

1 – 19

Number of

companies

Geographic positions of IT Services in Colombia

Meta

Nariño

CaucaHuila

Boyacá

Cundina-

marca

Santander

Norte de

SantanderBolívar

**

****

Atlántico

Valle del

Cauca

Antioquia

*

***

Tolima

** Quindío

**** Caldas

*** Risaralda

* Bogotá

Companies:

27% of total companies are call centers

73% of total companies are providers of Professional

Services

Jobs:

The industry employs over 84,000 peole: 16,000 are

software employees, 10,000 IT Services employees and

58,000 Call Centers employees.

Revenues:

2009 industry sales: US$ 2.5 millones

57% of the total sales are generated by Professional

Services companies

43% of the total sales are generated by Call Centers

Figures from a survey of 164 leading IT services companies

Source: The 5000 companies – Dinero Magazine, Ministry of Information Technologies and Communications, BPR Associates - ISI Emerging Markets. Proexport

Calculations

The segment of Call Centers has shown a sustainedgrowth

Revenues in the Contact Center Industry segment have

almost doubled in less than three years

The number of Jobs in the Contact Center segment has

doubled since 2006

Exports have grown by more than 150% since 2006

260386

478565

684763

0

200

400

600

800

1000

2006 2007 2008 2009 2010 2011f

US$

Million

32 42

50

67 72 80

-

20

40

60

80

100

2006 2007 2008 2009 2010 2011f

Thousands

37

63

8395

116 122

0

20

40

60

80

100

120

140

2006 2007 2008 2009 2010 2011f

US$

Million

Source: ACDCC. Asociacion Colombiana de Contact Center y BPO

F: forecast

H.R Management

Sales and Costumer Care

E – commerce

Credit, Risk and Collection

Management

Database Management

Helpdesk

Backoffice: Document

Management, printing,

procurement.

Finance

Telecommunications

Insurance

Industry and Costumer

Transportation

Media

Health

Public Administration

Software Technology Services

Integration and Technical

Services

Application Development and

Modernization

Infrastructure Technology

Outsourcing

Support ServicesData Center Management

BPO Solutions VerticalsTI Services Solutions

Colombia has become an export platform for Latin America, USA, and Europe providing voice and non-voice services

in Spanish, English and Portuguese

Onshore, Nearshore and Offshore Services

Fuente: MCIT. Andi – Chamber of BPO - Proexport

Competitive figures of the

BPO&O Market in Colombia

Source: Mckinsey

Barranquilla

1.1 m de inhabitants

Cartagena


Cucuta


Cali


Medellin


Bogota D.C.


Ibague


Colombia has a population of 46 million inhabitants and has 8 major centers of development

with over 500,000 inhabitants

Bucaramanga


Colombia is a country with multiple

development centers

8%9%

10%11%

12% 12%

13%

15%

Bolivar Santander Atlantico Bogota D.C. Norte de Santander

Antioquia Valle del Cauca Tolima

Fuente: DANE

Colombia’s unemployment rate is 11.7% (January-December, 2010)

Unemployment Rate

(2010)

Bolivar (Cartagena) has the lowest unemployment rate compared

to the other Colombian states

Bogota DC.23%

Medellin7%

Cali5%

B/quilla5%

Cartagena5%

B/manga6%

Others49%

Total of Universities in Colombia (2009): 126

Fuente: Colombian Ministry of education

The 8 main cities in Colombia concentrate 54% of the total universities in 2009

State EconomyBusiness

ManagementAccounting

Electrical

Engineering

Electronic

Engineering

System

Engineering

Bogota D.C 1,527 8,310 2,236 330 1,809 13,993

Antioquia –

Medellin612 5,723 1,377 324 885 1.503

Valle del Cauca

– Cali311 3,613 1,228 71 493 882

Santander –

Bucaramanga238 1,572 456 162 400 444

Bolivar –

Cartagena90 807 363 14 112 286

Atlantico -

Barranquilla130 1,479 402 64 313 422

Colombia has an important availability of human

resource for BPO Opportunities

Number of undergraduates

(2009)

Source: The World Competitiveness Yearbook 2010. Euromonitor International

The second country in Latin America with the highest availability of Human Resources, according to the IMD -

(10 = High Availability)

Number of Universities and Superior Education Centers

(2010)

Human Resources: Highly qualified labor force

2,89

3,33

4,6

5,11

5,3

5,66

0 1 2 3 4 5 6

Venezuela

Peru

Mexico

Argentina

Colombia

Chile

129 279

1.2231.557

5.437

Panama Colombia Brazil Argentina Mexico

Second place in Higher Education in Latin America, according to IMD 2010

(10 = Feels the needs of the economy)

Source: The World Competitiveness Yearbook 2010. Euromonitor International

Human Resources: Highly qualified labor force

4.72 4.624.39

3.84 3.73 3.6

Argentina Colombia Venezuela Mexico Brazil Peru

Source: Euromonitor International

8.593

19,004

86,188

173,751

380,651

Panama

Chile

Colombia

Mexico

Brazil

3,439

7,750

36,740

50,970

58,383

Panama

Chile

Colombia

Brazil

Mexico

Quality and Availability of Human Resources

Number of Science, Business and Law Graduates

(2010)

Number of Engineering, Manufacturing and Construcción Graduates

(2010)

Wages of Business and Engineering graduates

Source: Salary Expert ; Human Capital

Yearly based Wages: Salary Expert Quartile 16.7; HC Quartile 10.

Exchange Rate : Colombia (US dollar = $2,000) Chile (US dollar = $510) Brazil (US dollar = $1.77), Perúu(US dollar = $2.79) Mexico (US dollar = $12.7) Argentina (US dollar =

$3.79)

Financial Analyst (USD)

47.503

33.356

26.746

20.268

12.351

11.676

- 10.000 20.000 30.000 40.000 50.000

Chile

Brazil

Peru

Mexico

Argentina

ColombiaEconomist (USD)

65.920

46.284

37.121

28.127

17.133

11.340

- 20.000 40.000 60.000 80.000

Chile

Brazil

Peru

Mexico

Argentina

Colombia

Accountant (USD)

46.460

32.618

26.159

19.822

12.210

12.079

- 10.000 20.000 30.000 40.000 50.000

Chile

Brazil

Peru

Mexico

Colombia

Argentina

Electronic Engineer (USD)

60.267

42.321

33.937

25.715

15.669

9.714

- 20.000 40.000 60.000 80.000

Chile

Brazil

Peru

Mexico

Argentina

Colombia

Human talent at competitive costs

Competitive wages for the most representative jobs of the industry

Data Entry Clerk (USD)

21.501

15.100

12.108

9.173

5.589

3.858

- 5.000 10.000 15.000 20.000 25.000

Chile

Brasil

Perú

México

Argentina

ColombiaPersonal Assistant (USD)

33.019

23.188

18.592

14.087

7.552

6.450

- 10.000 20.000 30.000 40.000

Chile

Brasil

Perú

México

Argentina

Colombia

Database Administrator (USD)

59.689

41.912

33.611

25.467

15.518

15.360

- 20.000 40.000 60.000 80.000

Chile

Brasil

Perú

México

Argentina

Colombia

Computer Operator(USD)

29.591

20.785

16.663

12.626

7.695

4.536

- 10.000 20.000 30.000 40.000

Chile

Brasil

Perú

México

Argentina

Colombia


Source: Salary Expert ; Human Capital

Yearly based Wages: Salary Expert Quartile 16.7; HC Quartile 10.

Exchange Rate : Colombia (US dollar = $2,000) Chile (US dollar = $510) Brazil (US dollar = $1.77), Perúu(US dollar = $2.79) Mexico (US dollar = $12.7) Argentina (US dollar =

$3.79)

Monthly Wages for the Call Center and Contact Centers Industries

USD (2010)

Agent (Basic Profile)

333,3

320,5

320,5

296,9

270,0 280,0 290,0 300,0 310,0 320,0 330,0 340,0

Barranquilla

Bogota D.C.

Medellin

Cali

Help Desk

670,0

620,5

620,5

512,8

0,0 200,0 400,0 600,0 800,0

Bogota D.C.

Medellin

Cali

Barranquilla

Bilingual Customer Care

589,7

492,3

485,0

441,0

0,0 200,0 400,0 600,0 800,0

Bogota D.C.

Barranquilla

Medellin

Cali

Coordinator (Spanish)

923,1

769,2

682,1

682,1

0,0 200,0 400,0 600,0 800,0 1000,0

Bogota D.C.

Barranquilla

Medellin

Cali

Source: Manpower (2010). MMLW = COP $515,000. Exchange Rate: USD 1 = COP $1,850. High level wages


Labor Flexibility Index

0 - 100 ( 0 = More Flexible)

Source: World Bank (Doing Business Report, 2010)

País Day Shift Night Shift

Argentina 6 a.m. – 9 p.m. 9 p.m. – 6 a.m.

Colombia 6 a.m. - 10 p.m. 10 p.m. - 6 a.m.

Costa Rica 5 a.m. – 7 p.m. 7 p.m. – 5 a.m.

Ecuador 6 a.m. – 7 p.m. 7 p.m. – 6 a.m.

Mexico 6 a.m. - 8 p.m. 8 p.m. – 6 a.m.

Source: Colombia: Law 50 1990 and Law 789 2002. México: Labor Law 1969. Costa Rica: Law 2 1943. Ecuador: Labor Code 2005. Argentina: Law

11,544 1933 and 20,744 1976.

Colombia has the most flexible labor regimen in

Latin America

23.7 24.4

34.8

45.9 47.8 48.2

79.3

0

10

20

30

40

50

60

70

80

90

Colombia Chile Argentina Brazil Mexico Peru Venezuela

The severance payment for dismissal without just cause is the lowest in Latin America. The chart is based on the case of an

employee working with a company during 2 years with a monthly salary of US$ 1,000

3,768

3,000

2,333

2,000 2,000

1,667

USD 0

USD 500

USD 1.000

USD 1.500

USD 2.000

USD 2.500

USD 3.000

USD 3.500

USD 4.000

Brazil Peru Costa Rica Argentina Chile Colombia

Lowest Lay off Costs in Latin America

Source: Colombia: Article 64 of the Labor Code. Mexico. Article 50 of the Federal Labor Law; Peru. Article 94 of the Supreme Decree 003-97; Costa Rica.

Article 28 and 29 of Labor code. Argentina article 245 of Law 20744 of 1976. Brazil. Article 478 and 487 of Law 5452 of 1943 – (Consolidation of the Labor

Laws and FGTS -Unemployment Service Fund in Law 5107 of 1966). Chile article 161 and 167 of Labor Code.

Infraestructure to support world-class operations

Fuente: ICT Colombian Ministry

OCEANO

PACIFICO

ECUADOR

PANAMA

PDP TUNJA

EDIFICIO SOCIEDAD DE INGENIEROS

RED METRO

BOGOTACalle 100, Paseo El Lago, Pedro

Domeq y Colpatria

PDP VILLAVICENCIO

EDIFICIO ONDAS DEL META

NEIVA

SE EL BOTE

IBAGUE

SE MIROLINDO

POPAYAN

SE SAN BERNARDINO

PDP CALI

CHIPICHAPE

SE JAMONDINO

CUCUTA

SE SAN MATEO

PDP RIOHACHA

EDIFICIO EL EJECUTIVO

SE SABANALARGA

PDP TOLUPDP SINCELEJO

EDIFICIO BANCO DE BOGOTÁ

PDP MONTERIA

EDIFICIO MALENA

PDP BUENAVENTURA

EDIFICIO PTC

VENEZUELA

OCEANO

PACIFICO

OCEANO

ATLANTICO

PANAMA

META

PDP ARMENIA

AYA

RED METRO

BUCARAMANGACabeceras, José Acevedo y

Gómez

BARRANCABERMEJA

SE COMUNEROS

PDP VALLEDUPAR

EDIFICIO CAJA AGRARIA

SE PARAGUAIPOA

PDP MEDELLIN SEDE ISA

PDP PEREIRA

EDIFICO ANTONIO CORREA

PDP SANTA MARTA

EDIFICIO BCH

USTUPO

PDP CARTAGENA

EDIFICIO CHAMBACÚ

CABLE ARCOS-1

Hacia Quito

SE FUNDACIÓN

MARACAIBO

CABLE EMERGIA

CABLE PANAMERICANO

CABLE CFX

CABLE MAYA

PDP BOGOTÁ

EDIFICIO WBP

BUCARAMANGA

SE LOS PALOS

OCAÑA

SE OCAÑA

SE EL COPEY

SE CUESTECITAS

SE SAN CARLOS

SE PRIMAVERA

SE TORCA

SE EL BANCO

SE BETANIA

SE YUMBO

SE LA VIRGINIA

ER EL ROBLE

ER EL TAMBOR

SE MIRAFLORES

SE CAUCASIA

SE YARUMAL

SALITRAL

PDP BARRANQUILLA

NOGALES

MARACAIBO

SE PURNIO

PDP MANIZALES

AVANTEL CHIPRE

CABLE GLOBAL

CROSSING

PDP PASTO

PLAZUELAS

SE ANCÓN SUR

RED METRO

MEDELLÍNHotel Dann, Santillana, Asomadera

SE TERMOGUAJIRA

SE GUAVIO

Año

2008

OCEANO

PACIFICO

ECUADOR

PANAMA

PDP TUNJA

EDIFICIO SOCIEDAD DE INGENIEROS

RED METRO

BOGOTACalle 100, Paseo El Lago, Pedro

Domeq y Colpatria

PDP VILLAVICENCIO

EDIFICIO ONDAS DEL META

NEIVA

SE EL BOTE

IBAGUE

SE MIROLINDO

POPAYAN

SE SAN BERNARDINO

PDP CALI

CHIPICHAPE

SE JAMONDINO

CUCUTA

SE SAN MATEO

PDP RIOHACHA

EDIFICIO EL EJECUTIVO

SE SABANALARGA

PDP TOLUPDP SINCELEJO

EDIFICIO BANCO DE BOGOTÁ

PDP MONTERIA

EDIFICIO MALENA

PDP BUENAVENTURA

EDIFICIO PTC

VENEZUELA

OCEANO

PACIFICO

OCEANO

ATLANTICO

PANAMA

META

PDP ARMENIA

AYA

RED METRO

BUCARAMANGACabeceras, José Acevedo y

Gómez

BARRANCABERMEJA

SE COMUNEROS

PDP VALLEDUPAR

EDIFICIO CAJA AGRARIA

SE PARAGUAIPOA

PDP MEDELLIN SEDE ISA

PDP PEREIRA

EDIFICO ANTONIO CORREA

PDP SANTA MARTA

EDIFICIO BCH

USTUPO

PDP CARTAGENA

EDIFICIO CHAMBACÚ

CABLE ARCOS-1

Hacia Quito

SE FUNDACIÓN

MARACAIBO

CABLE EMERGIA

CABLE PANAMERICANO

CABLE CFX

CABLE MAYA

PDP BOGOTÁ

EDIFICIO WBP

BUCARAMANGA

SE LOS PALOS

OCAÑA

SE OCAÑA

SE EL COPEY

SE CUESTECITAS

SE SAN CARLOS

SE PRIMAVERA

SE TORCA

SE EL BANCO

SE BETANIA

SE YUMBO

SE LA VIRGINIA

ER EL ROBLE

ER EL TAMBOR

SE MIRAFLORES

SE CAUCASIA

SE YARUMAL

SALITRAL

PDP BARRANQUILLA

NOGALES

MARACAIBO

SE PURNIO

PDP MANIZALES

AVANTEL CHIPRE

CABLE GLOBAL

CROSSING

PDP PASTO

PLAZUELAS

SE ANCÓN SUR

RED METRO

MEDELLÍNHotel Dann, Santillana, Asomadera

SE TERMOGUAJIRA

SE GUAVIO

Año

2008

5 submarine cables that generate over 500 Gbps of

bandwidth

North-South Ring

Source: Colliers International

Category A+ y A Buildings

Competitive Internet CostMonthly US$ for 1Mbps (Megabytes per second)

Average Rent Costs in Buildings at Competitive Prices US $/m²

81

60

47

45

45

42

- 10 20 30 40 50 60 70 80 90

Peru

Chile

Venezuela

Argentina

Colombia

Brazil

17.0

16.6

13.9

11.9

11.8

9.5

0 2 4 6 8 10 12 14 16 18

Santiago

Buenos Aires

Caracas

Bogota

Ciudad de México

Lima

Highly Competitive Operating Costs

Time ZoneNew

YorkWashington

Ciudad

de

México

Buenos

AiresSantiago

Sao

Paulo

Los

AngelesMontreal

Bogota - - (-1) (+2) (-1) (+2) (-3) 0Buenos

Aires(+2) (+2) (+3) - (+1) - (+5) (+2)

Sao Paulo (+2) (+2) (+3) - (+1) - (+5) (+2)

Ciudad de

México(-1) (-1) - (-3) (-2) (-3) (+2) (-1)

Colombia is in the middle of 5 time zones, and share time zone

with important business centers like New York, Toronto and

Miami

Source: www.turistaloserastu.es

Colombia is in the middle of 5 time zones

A sample of the BPO

companies in Colombia:

Success Stories

German Enterprise of Sales and Customer Service for Latin America in Mexico, Puerto Rico, Dominican Republic, Venezuela, Ecuador, Peru, Chile, Argentina and Colombia

American Enterprise of Software solutions help desk for Latin America. Sales of call centers and network support for Latin America –nor Brazil neither Mexico-

Andean Region Headquarters for Colombia, Venezuela, Peru and Ecuador

American Enterprise of Financial Services, Communications and Infraestructure for Latin America in: Colombia, Venezuela, Peru, Ecuador and Pananma

Andean Region Headquarters for Colombia, Venezuela, Peru, Ecuador and Panama

American Enterprise of Customer Service for Personal and Corporate Banking in twelve countries in Latin America, except for Brazil and Mexico

American Enterprise of IT Services in Colombia

American Enterprise of Sales and customer service for Latin America except Brazil

Free Trade Zone Operation for a Managed Service Center. Andean Region F&A shared services for the Americas

American Enterprise of IT Services operating in North America and Latin America

American Data Center based in Bogota for the Andean Region. Backup center of the NAP Americas in Miami

Headquarters and Logistics Operations F&A shared services for the Andean Region

American Bilingual contact center operation for United States and Colombia

French Bilingual contact center for The Americas and Western Europe

Colombia’s Main Call Centers Companies

Source: Asociación Colombiana de Contact Center y BPO - ACCC

Workstations 160

Jobs 180Colombia

Workstations 4,600

Jobs 6,900

Workstations 2,700

Jobs 4,200

Workstations 1,290

Jobs 1,000

Workstations 220

Jobs 215

Workstations 500

Jobs 500

Workstations 960

Jobs 550

Workstations 400

Jobs 600

Workstations 3,800

Jobs 5,400

Workstations 1,100

Jobs 1,200

Workstations 1,900

Jobs 2,600

Workstations 70

Jobs 35

business process outsourcing & off shoring (bpo&o) · 2012-01-16 · business process...

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