Latin America's Role in driving "Americas-Centric" Outsourcing & U.S. Competitiveness
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Latin America's Role in driving "Americas-Centric" Outsourcing & U.S. Competitiveness

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U.S. businesses want to improve efficiencies, accelerate technical innovation and gear their businesses to be globally ready – and the Latin America IT/ BPO marketplace is starting to recognize ...

U.S. businesses want to improve efficiencies, accelerate technical innovation and gear their businesses to be globally ready – and the Latin America IT/ BPO marketplace is starting to recognize these requirements, creating an ideal environment for ‘Americas-centric’ outsourcing.

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Latin America's Role in driving "Americas-Centric" Outsourcing & U.S. Competitiveness Presentation Transcript

  • 1. Latin America’s Role in driving “Americas-Centric” Outsourcing & U.S. Competitiveness The Latin America Outsourching Authority
  • 2. U.S. Competitiveness …Some weaknesses in particular areas have deepened since past assessments. The business community continues to be critical toward public and private institutions (41st). Trust in politicians is not strong (54th), perhaps not surprising in light of recent political disputes that threaten to push the country back into recession through automatic spending cuts. Business leaders also remain concerned about the government‘s ability to maintain arms-length relationships with the private sector (59th), and consider that the government spends its resources relatively wastefully (76th). 2 The Global Competitiveness Report 2012–2013: Country Profile Highlights
  • 3. U.S. Competitiveness A lack of macroeconomic stability continues to be the country‘s greatest area of weakness (111th, down from 90th last year). 3 http://www.concordcoalition.org/issues/indicators/projected-debt “Large government debts and obligations facing the US now threaten to crowd out the investments in infrastructure, innovation, and individuals that we need to sustain long-run productivity growth.” – Professor Jan Rivkin: US Competitiveness at Risk Harvard Business Review, September 2012
  • 4. U.S. Competitiveness 4 BPO Providers Anticipate Big Windfall as „ObamaCare‟ Threatens to Drive Jobs Offshore July 22nd, 2013 ―Many large employers have announced their intentions to limit employment due to the new law‘s requirements—and this has created a potential bonanza for outsourcing providers seeking to expand business function support for corporate business services previously residing ‗in-house‘ ‖ The Latin America Outsourching Authority
  • 5. U.S. Competitiveness 5 Soon to be Adopted Government Mandates Will Propel New Offshore Business Models July 29th, 2013 ―Taking a long-term view, I have been a proponent of the ‗Global Sweat Equity Business Model.‘ It is fueled by high-octane people, process and technology and low-octane funding. ObamaCare‘s burdens and complexities invites sophisticated foreign entrepreneurs to join hands with American small business into a new alliance for ―global sweat equity business.‖ – Atty. William Bierce, Bierce & Kenerson The Latin America Outsourching Authority
  • 6. LatAm Competitiveness 6 The Good News: “Latin America and the Caribbean has continued to grow steadily in the past year at an average rate of 4.5 percent. Strong external demand for local commodities, especially from China and other Asian economies, coupled with good macroeconomic management have allowed the countries in the region to put their short- and medium-term growth outlooks on a “glide path to steady growth.” With expected growth rates of 3.4 percent and 4.2 percent for 2012 and 2013, respectively, the region is expected to continue to outperform the rest of the world.” The Global Competitiveness Report 2012–2013: Country Profile Highlights
  • 7. LatAm Competitiveness 7 The Challenges: “…Although several countries have once again made good progress in raising competitiveness, the region as a whole continued to face important competitiveness challenges. These pertain in particular to: •A weak institutional set-up with high insecurity, •Poor infrastructure, •Inefficient allocation of production resources caused by insufficient levels of competition, & •A low capacity to generate new knowledge to strengthen R&D innovation in the region…” The Global Competitiveness Report 2012–2013: Country Profile Highlights
  • 8. LatAm Competitiveness 8 The Challenges: “A wide variety of factors goes into the decision by a United States company to move some or all of its operations elsewhere, but one factor in particular seems to be paramount to business executives: The training, skills, and the abilities of the outsourcing country’s workforce. Thus, to attract U.S. companies and to take advantage of the opportunities presented as global corporations assess and reassess their outsourcing options, the leaders of nearshore locations must continue to develop and expand their training programs in IT/BP and “soft skills.” “How Expanding Government Training Initiatives Can Increase U.S. Interest in Nearshoring” – Victoria Prussen Spears, Global Outsourcing Information
  • 9. LatAm Competitiveness 9 The Advantages ~ Latin America vs. The World: •Cultural Competency •Proximity •Labor stability
  • 10. LatAm Competitiveness 10 The Challenges ~ Latin America vs. The World: Rank Country EF English Proficiency Index Level 20 n Argentina 55.38 Moderate Proficiency 26 n Uruguay 53.42 Low Proficiency 33 n Peru 50.55 Low Proficiency 34 n Costa Rica 50.15 Low Proficiency 38 n Mexico 48.60 Low Proficiency 39 n Chile 48.41 Very Low Proficiency 40 n Venezuela 47.50 Very Low Proficiency 41 n El Salvador 47.31 Very Low Proficiency 43 n Ecuador 47.19 Very Low Proficiency 46 n Brazil 46.86 Very Low Proficiency 47 n Guatemala 46.66 Very Low Proficiency 50 n Colombia 45.07 Very Low Proficiency 51 n Panama 44.68 Very Low Proficiency The Organization for Economic Cooperation and Development’s (OECD) PISA study in 2009 found that across Latin America 48% of 15-year-olds cannot perform rudimentary tasks in reading and comprehension necessary to participate in society, while among low-income students that figure rose to 62%. Clearly, if [native] literacy skills are lacking, English will fall by the wayside. Source: Education First Ltd. www.EF.com 2012 Worldwide English Proficiency Report *EF = English Proficiency Index
  • 11. LatAm Competitiveness 11 The Challenges ~ Latin America vs. The World: World map of the 2008–2009 Global Competitiveness Index. Each color represents one quartile of the ranked nations. Green nations score higher, red nations lower. The Global Competitiveness Report "assesses the ability of countries to provide high levels of prosperity to their citizens. This in turn depends on how productively a country uses available resources. Therefore, the Global Competitiveness Index measures the set of institutions, policies, and factors that set the sustainable current and medium-term levels of economic prosperity.
  • 12. LatAm Competitiveness 12 The Advantages ~ Latin America vs. The World:
  • 13. LatAm Competitiveness 13 Buy-Side BPO & Shared Services •Defend the model: Global businesses are a force for good in a global economy. •Growth creates new consumers and markets. •Be proactive instead of reactive – don‘t let populists or polemicists put you on defense. •Re-frame the conversation: Expanding internationally, rather than ―Outsourcing‖ - Leverage your providers on this!
  • 14. LatAm Competitiveness 14 Buy-Side BPO & Shared Services Communications Strategy If they want to grow markets and workforces, corporate leaders need to identify and communicate their reasons for “going offshore.” Generally, consumers and shareholders will understand the need to pursue global markets for American goods and services. Most large employers who have engaged in global sourcing and shared services adopt a “Center of Excellence” approach where back office work is held to global standards and knowledge management, process management, supply chain management and project management tools are adopted. The enterprise becomes redefined as a series of processes for management to design and execute across global markets. Atty. William Bierce, Bierce & Kenerson Excerpted from “Soon to be Adopted Government Mandates Will Propel New Offshore Business Models” July 29th, 2013 www.nearshoreamericas.com
  • 15. LatAm Competitiveness 15 Buy-Side Case Study: Ryan, LLC. & Wfaria Consulting Ryan.com Pressroom, June 17, 2013 Ryan Forms Strategic Alliance with WFaria Consulting to Support Continued Expansion of International Tax Practice in Latin America. Dallas, Texas – Ryan, a leading global tax services firm with the largest indirect tax practice in North America, today announced a strategic alliance with WFaria Consulting, a leading Brazilian advisory firm specializing in tax and corporate law. WFaria has extensive experience in the international financial markets, helping large corporate clients such as banks, technology companies, industrial conglomerates, and institutional investors navigate complicated Brazilian tax regulations. “Our alliance with WFaria represents a significant and strategic milestone in Ryan’s Latin American growth plan,” said Todd E. Behrend, Ryan’s International Tax Practice Leader. “Brazil has an extremely complicated tax structure, and our clients will benefit tremendously from WFaria’s expertise in that area.” “Ryan already provides tax services to many of the world’s leading global companies, and the partnership with WFaria will deliver tremendous value through additional international tax solutions in Brazil,” said Brendan F. Moore, Ryan Executive Vice President and Vice Chairman of Global Corporate Development. “The trust that Ryan has earned by delivering superior results for these multinational clients drives our commitment to dramatically expand Ryan’s international tax services.
  • 16. LatAm Competitiveness 16 Buy-Side Case Study: Coviden Plc. www.independentmail.com by Ray Chandler, September 12, 2012 Nearly 600 employees of the Covidien Plc plant in Seneca, South Carolina will be losing their jobs. Covidien management officials announced late Wednesday afternoon that the plant will be closing out operations over the next three years as part of a plan to move the facility's operations to Costa Rica. The plant manufactures elastic hospital products, medical bandages and surgical supplies. It employs about 595 full-time and temporary contract employees. "After lengthy and careful consideration, we determined the best way to remain competitive and ensure the company's future success was to transfer the products manufactured in Seneca to a Covidien manufacturing facility in Costa Rica," said Nicole Barranco, Covidien's director of state government affairs, in a statement accompanying the announcement.
  • 17. Frame the Debate 17 Buy-Side Case Study: Coviden Plc. •Ramesh Ponnuru, “Tongue-Depressor Tax Will Harm Jobs, Innovation,” Bloomberg.com, January 2, 2012. Available at http://www.bloomberg.com/news/2012-01-03/tongue- depressor-tax-will-harm-jobs-innovation-ramesh-ponnuru.html. •“Stryker Announces Actions to Drive Over $100 Million In Annual Productivity Gains,” Stryker Corporation, Press Release, November 10, 2011. Available at http://phx.corporate- ir.net/phoenix.zhtml?c=118965&p=irol-newsArticle&ID=1629222.
  • 18. LatAm Competitiveness 18 Sell-Side BPO & Shared Services •Increased government mandates and imposed costs create new opportunities! Reconsider your prospects: Cost structures are shifting drastically within the USA. •Help your customers win the public debate: You are not ―outsourcing‖ as much as you are facilitating an international expansion of the virtual enterprise. •Be a facilitator for your customers to enter your local markets. •Training – Latin America is not – and should not be at the low end of the cost / value scale. Invest in your human resources!
  • 19. LatAm Competitiveness 19 Sell-Side Case Study: HP & Coca-Cola HP Mexico Adds $100 Million to Existing Technology Outsourcing Deal with Coca-Cola in Latin America www.itchannelplanet.com, D.H. Kass, April 8, 2011 •Hewlett-Packard Mexico, S. de R.L. de C.V. recently said that it has expanded by $100 million its existing contract with Coca-Cola FEMSA, S.A.B. de C.V. in a five-year outsourcing services deal. •HP said that it will consolidate some 348 of Coca-Cola FESMA’s locations into one data center in Mexico and move business critical SAP applications, server management and monitoring to facilities in Brazil and Argentina. Security services will be provided from HP delivery centers in Costa Rica. •“After experiencing sustained growth across Latin America, these additional efforts to centralize and standardize will give us the support we need to find new opportunities to put beverages in the hands of the Latin American people,” said Hector Calva, Coca-Cola FESMA chief information officer.
  • 20. LatAm Competitiveness 20 Macro – Level Priorities •Corruption & Governance – High & Low Level •Macroeconomic Stability – Sovereign Debt •Infrastructure – Keep the Lights On! •Corporatism & Protectionism •Education •Business leaders are uniquely qualified to effect progress
  • 21. LatAm Competitiveness 21 Macro – Level Case Study "Stevens Institute of Technology International (SITI)" is a private university in the Dominican Republic that offers technology and technology management education, taught in English. SITI started its first classes in September 28, 2007. Its campus is in the Parque Cibernético de Santo Domingo. SITI currently offers masters degrees in Information Systems and Manufacturing Technology. These programs are rigorous, American-style graduate education programs, requiring 40 credits including a masters thesis. They are designed to prepare graduates to assume leadership positions in the rapidly growing technology sector of the Dominican economy.
  • 22. LatAm Competitiveness 22 Macro – Level Case Study Exploring Argentina’s Open Universities August 1st, 2013 By Patrick Haller “Argentine nationals and foreigners can enroll in undergraduate programs at national universities without paying tuition fees. Overseen by the National Commission for University Evaluation and Accreditation (CONEAU), the courses are subject to accreditation and the universities are subject to periodic review, assuring the highest possible quality for students.” The Latin America Outsourching Authority
  • 23. 23 What we do Connecting and Educating BUYERS to new MARKETS Informing and Awakening PROVIDERS on new TRENDS Analysis and Leadership for a Market Requiring Knowledge and Insights Americas-Centric Outsourcing Twitter: @NSAMERICAS
  • 24. Some of Our Clients 24
  • 25. 25 Connect with Us: www.nearshoreamericas.com CONTACT US FOR MORE INFORMATION Loren Moss Email: loren@nextcoastmedia.com Skype: Mosscatski www.linkedin.com/in/lorenmoss/