BUSINESSPROCESSOUTSOURCING

OPPORTUNITIES IN THE LOCAL INDUSTRY

The financial sectorhasbeenoneofthemostdynamicsectorsinmobileinternetdemand,basedonamassbancarizationdynamicsoughtbytheGovernment to offer everyone the possibility tomanage their financesusingmobiledevices.Thistrendhascreatedmanyopportunities for theprovisionofbackofficeandcallcenterservicesinthecountry.

ColombiahasbecomeadistributionhubforoutsourcingservicesandITand Software Services regionalwide, due to the availability of qualifiedhuman capital, the strategic and competitive geographic location witheasyaccesstoglobalmarkets.Itslocationinthemiddleoffivetimezoneshasacomparativeadvantage,sharingatimezonewithimportantbusinesscenters intheAmericassuchasMiami,LAX,NY,Toronto,MexicoCity,BuenosAires,SaoPauloandSantiago,amongothers.

TheNationalGovernment is currently carrying out an ambitious plan,morethanUS$35,7billionoverthenextyears,forthedevelopmentofroad, port, railway, and airport infrastructure in the country, that willrequire accounting, finance, and logistics support services to controlprojectsoperation.

Duetothe sustained expansion of the health sectorandthegrowingdemandof thepopulation (47million inhabitants), this sector requiresincreasing support in mobile telecommunication services for remotemonitoring of patients (Telemedicine) and information consolidation(DataEntry).

The Oil & Gas sectors demand more services related to mobiletelecommunicationsaswellascontrolanddrilling,extraction,andoiltransportprocessesfortheirdailyactivities.

The Colombian companies of energy generation, transport and distribution are growing. This expansion process will increase thedemandofBPOandITservices.

GROWTH, CONFIDENCE AND OPPORTUNITIES TO INVEST

Libertad y Orden

• Develop KPO centers focused on financial services,market research, legal,engineeringanddesignservices,takingadvantageofthemorethan37,000professionals inManagementandEngineeringprogramswhich representaworkforcecapableofprovidingaddedvalue.

• Develop scalable basicVoice BPOoperations and gain access tomore than34,000 people in technical and technological programs in Business andEngineeringprogramsinAntioquia.

• BuildOffshoring&Outsourcingcenters,asaresultoftheregion’sstrongvocationinthesesectors.Becauseofthis,theTholonsTop100rankingsfor2014listedBucaramangaasoneofthe100mostattractivecitiestoinvestinoutsourcing.

• Outsource customized services and gain access to the more than 2,000Medicinegraduatesand9,000Lawgraduates.

• Build Voice BPO centers in Spanish to provide call center, financial andaccountingservicesandgainaccesstomorethan8,000graduatesintechnicalandtechnologicalprogramsrelatedtoManagementandEngineering.

• DevelopKPOprojects specialized in outsourcingEngineering serviceswithmorethan5,000engineersindifferentareas.

COLOMBIA, A COUNTRY WITH MULTIPLE AREAS OF DEVELOPMENT

• BuildVoiceBPOcenters inactivities suchas telemarketing, collectionsandcustomerservice,tappingintomorethan21,000graduatesoftechnicalandtechnologicalcareers,inprogramsrelatedtoManagementandEngineering.

• Outsource professional services, especially Telemedicine as there aremorethan500companiesinthehealthsectorintheregionwithANanuallygrowthof13%peryear.

• DevelopMarketResearchandR&D+Innovationcompaniesparticularlyforthecosmeticsandfoodindustry,withabusinessnetworkofmorethan240and380companiesrespectively.

BOGOTA

MEDELLIN

CALI

• BuildbasicVoiceBPOcenterssuchastelemarketing,collectionsandcustomerservice,takingadvantageofmore15,000techniciansandtechnologistsinEngineeringandManagementprograms.

• Develop KPO projects, especially in Engineering and R&D + Innovationservices thanks to the network of more than 16,000 professionals inEngineeringandManagementareas.

COFFEE CULTURAL LANDSCAPE

BUCARAMANGABARRANQUILLA

• Create Voice BPO centers in Spanish and English to provide services forcollection,telemarketing,salesandcustomerservice,andgainaccessthecity’s9.4%bilingualpopulation.

• BuildNon-VoiceBPOandKPOcenters,leveragingthe50,000peoplegraduatedin Management and Engineering areas between 2010 and 2012, , whichrepresentahighlyskilledworkforce.

TheBPO industry inColombiahascreatedmore than246,000jobs.(IDC,2014.)

The bilingual operations of companies such as Sutherland,TeleperfomanceandConvergysarenoteworthy.(ACDECC,2014.)

Forthreeyearsinarow,Colombiawasincludedinthe“Top30DestinationCountriesforOffshoreServices”report.Thereporthighlightedthecountry’sstrengthsforcallcenteroperationsandtransactionalBPOefforts, theGovernment’s proactive supportfortheITsectorandthecompetitivecosts.(Gartner,2013.)

Intermsofoperatingrevenuesin2013,theindustrygrewby16%comparedtothepreviousyear.(ACDECC[ColombianAssociationofContactCentersandBPO],2014.)

On average, exporting companies are exporting about 40% oftheiroperations.(IDC,2014.)

BPO INDUSTRY IN COLOMBIAMAJOR SEGMENTS SERVED, 2013

Source: ACDECC. Contact center andBPOColombianAssociation,2013.

COLOMBIA, A MARKET THAT DOUBLES THE GROWTH OF THE LATIN AMERICAN MARKET

TELECOMMUNICATIONSBANKING AND FINANCIAL SERVICESMASSIVE CONSUMPTIONGOVERNMENTINSURANCEOTHERS

A GROWING MARKET WITH HIGH CAPACITY OF SKILLED LABOR

NUMBER OF GRADUATES IN ENGINEERING AND BUSINESS ADMINISTRATION, 2012*

23,10814,42311,076

8,1825,851

2,011

67,578

MANAGEMENTACCOUNTINGINDUSTRIALENGINEERING AND RELATED

SYSTEMSENGINEERING AND RELATED

ECONOMYELECTRONICENGINEERING AND RELATED

ELECTRIC ENGINEERING AND RELATED

13,672 57,283 58,884 85,196 139,423 145,031 488,787

Source:EmploymentObservatory,MinistryofEducation,2012.

TOTAL GRADUATES 2001–2012

Colombia, with 47.1million inhabitants, is the world’s second largestSpanish-speaking country behind Mexico. It has multiple centersof development: Nine metropolitan areas with a population higherthan 500,000 inhabitants. (Source: DANE [National AdministrativeDepartmentofStatistics].)

Colombia iswithin the 30th largest economies and one of the largestwithinthenon-OECDeconomies.

The country has the second fastest growing labor force in the region.(IMD,2014.)

InColombiamorethan200,000peoplegraduateeveryyearfromhighereducation.Ofthose,56%dosoattheundergraduateleveland22%frommasters and specializations. (Employment Observatory, Ministry ofNationalEducation,2013.)

*Takingintoaccounttechnological,undergraduateandpostgraduateprograms.

INFRASTRUCTURE, ATTRACTIVE COSTS SAVINGS AND A PRIVILEGED LOCATION

ATTRACTIVE REGULATORY FRAMEWORK

TELECOMMUNICATION INFRASTRUCTURE OF SUBMARINE CABLES

Availabletoolstoenableoperationsinareassuchasservicesexports(PlanVallejo),intellectualpropertyrights,StatutoryLawofHabeasData,ValueAdded Tax (VAT) exemption for services provided from Colombia,possibilityofapplyingtothefreetradezonesregime,FirstJobLaw,andopportunitiestobenefitfromTelework.

Primestrategiclocation:Locatedintheheartlandofthemaincommercialandfinancialcentersofthehemisphere,Colombiasharescultural-affinity-patternssuitabletoconsolidateoperationsintheregion.

Infrastructure capable of supportworld-class operations: 9 submarinecables,supplementedbyan internalopticalfiberringthatensuresthenationalconnectivity,increasingColombia´scompetitiveness.(MinTIC-MinistryofInformationandCommunicationsTechnologies,2014.)

GOVERNMENT’S COMMITMENT WITH THE SECTOR

TheGovernmentiscommittedtosupportandprovideaidthroughtheProductive Transformation Program–PTP, a strategy that promotesthe sector growth. During the last years, the program has created afavorable environment to consolidate aworldwide recognition for thesector.Programeffortsdevelopthroughoutfourmainthemes:HumanCapitalandRegulatoryFramework,Consolidation,PromotionandSectorInnovation,andInfrastructureandSustainability.

Governmentplanthataimstogenerateeconomicgrowthbasedontheuse and appropriation of ICTs in the Colombian population and thedevelopmentofanationaldigital ecosystem.Thisproject is ledby thePresidencyoftheRepublicandtheMinistryofInformationTechnologiesandCommunications,which,at theendof2013,managed toconnect1,078 municipalities increasing Internet connections from 2.2 to 8.8millionnationwide.

Continuous strengthening of commercial relations between Colombiaandtheworld,openingawindowofopportunitiesforinvestmentinallbusinessoutsourcingservices.

NEW MARKETS OPENING

PAN-AM

SAC

CFX - 1

SAM - 1MAYA - 1

BARRANQUILLACARTAGENA

TOLU

MEDELLIN

BOGOTA

BUCARAMANGA

CALI

ARCOS

SOURCE: MINTIC, 2013.

PCCS

GLOBENET

AMX - 1

MAJOR FOREIGN COMPANIES HAVE CHOSEN COLOMBIA AS AN INVESTMENT DESTINATION

PramodBhasin,Non-ExecutiveViceChairman,Genpact

“ColombiaoffersafavorablebusinessclimateforGenpactandforourclients–arichtalentpoolwithahighliteracyrateandcomplementaryskillsets,ahealthyandgrowingeconomy,anumberofuniversitieswithstrongbusinesscurricula,adiversearrayof industries,andopentradepractices.GenpactishonoredtoestablishitsrootshereinColombiaandbecomeapartofitscultureandthrivingbusinesscommunity.”

Sykes,UnitedStates:openedanewcallcentercreating160jobsinthecityofBarranquilla.

HP,UnitedStates:openedanewglobalservicecenterinMedellin.

UnitedStates:contactcentertoservetheUSmarket.Genpact, India:addedvalueoperationsservicecenter,especially infinancialandaccountingareasfortheregion.