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Data and Economic Statistics, Editorial

BPO Trend Spotting – “Nearshoring”

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For major U.S. corporations looking to outsource non-core business processes, the selection of BPO partners with call centers or IT operation centers in Latin America and the Caribbean is not new.  However, the “pitch” that having these operations in a time zone more convenient to the U.S. was never compelling enough to warrant the higher cost relative to the options available in southeast Asia.  But things have changed – specifically, India is no longer so cheap as it once was.  American firms are finding that native proficiency in languages such as Italian and German, as well as Spanish, coupled with the closer proximity to headquarters are some of the benefits that client corporations can obtain from “nearshore” BPO.

According to Tholon’s 2013 “Top 100 Outsourcing Destinations”, Colombia has been realizing its real-world potential as a viable destination in the region for IT BPO services.   Bogota, Medellin, Cali, and Bucaramanga all ranked among top cities for outsourcing on this year’s list.  Colombia’s progress is attributed to the unwavering support from its industry and government stakeholders to promote Colombia as a global IT-BPO destination. Moreover, Colombian industry leaders have done well in collaborating with large Western providers in setting up operations in the country. “Invest in Bogota” extended its support to Convergys when it needed bilingual speakers. Aravato Iberia has just started its back-office operations in Bucaramanga, creating 1,000 jobs in the city.

Uruguay’s Montevideo was another fast moving destination in the region.  A small outsourcing destination which has long proven its strength in ITO services, Uruguay has maintained a vibrant, yet stable business ecosystem – establishing itself as a seemingly more predictable alternative to Argentina and Brazil. Ongoing support from local stakeholders and promotion agencies, a maturing ITO sector and increasing interest by regional and American providers in the country, should propel Montevideo in coming years.

San Jose, Costa Rica has also been one of the most impressive destinations in the region, becoming a fast-growing hub for IT operations.  A significant catalyst for this has been the sustained government support in promoting the local IT-BPO sector.