Webinar the rise of nearshore outsourcing after covid 8 7-2020

1. 1
Eric Liebross
Senior VP, Business
Operations Performance
Jon Butler
Principal &
Founder
August 12th 2020
12:00pm ET
The Rise of Nearshore Outsourcing in a Post-COVID Era
Why Costa Rica is a Great Choice
Finance, IT, Customer Service and more

2. Sources:
- PwC CFO Pulse Survey
- Gartner
- U.S. Bureau of Economic Analysis
The Need to Optimize Costs & Increase Operational
Resiliency Became even More Relevant after COVID
80% of CFOs are
implementing cost
containment initiatives in
response to COVID
Cash and liquidity is the
current top concern for
71% of CFOs
74% of organizations
plan to make remote
work a permanent
part of their model
The U.S. economy
suffered its worst period
ever in Q2 2020, with GDP
falling a historic 32.9%

3. 3The Adoption of Outsourcing and Automation is
accelerating in response to these needs…
Sources:
- SSON HR Shared Services Poll Survey
- Forrester: The Future of Work – A Pandemic Spotlight
61% of Shared
Services plan to
outsource more in
response to the new
future of work model,
while 84.6% plan to
increase automation
Nearly 50% of the organizations will increase
RPA spent over the next year due to COVID-19.
The main goals for the RPA investment are:
83% - Increase agility, diversity, & resilience in their
supply chain operations
80% - Address extraordinary cost pressures by
automating back-office and operational tasks
75% - Support remote workforces

4. 4
Has the current situation changed your
perspective on outsourcing?
1. Yes, I am more open to outsourcing now
2. No, I don’t see myself outsourcing
3. I’ve always believed in outsourcing, and it is working well for me
4. I believe in outsourcing, but my current model is not working

5. 5
The question is…How to make
outsourcing right?

6. 6
Leading Regions for Shared Services & Outsourcing
Location Strategy
Latin America
Eastern Europe
North America
South and East Asia
 Lowest cost in the globe
 Most common global
destination for low-value,
transactional processes
 Significant time-zone and
cultural differences with the
Americas
 Pan-Regional solution for
Americas
 30% to 60% labor arbitrage
compared to US
 Used for both low and high
value activities
 Regional solution for US
and Canada
 High cost – not convenient
for a global solution
 Nearshore solution for Europe• Geographic Proximity
• Time Zone
• Low Cost
• Large and Strong Workforce
• Cultural Affinity
• Language Skills
• Lower Turnover than Asia
• Infrastructure
Primary Drivers
Latin America represents 28% of
the “Top 25” Global Outsourcing
Destinations (Tholons 2018)

7. 7Demand for Greater Collaboration and Value Add Services
has driven the rise in Nearshoring
• Cost savings is a given but is not the sole
driver
• Outsourcer brings best-in-class
technologies and best practices to drive
innovation and high performance
• Nearshore enables a collaborative
approach where outsourcer serves as an
extension of your team
• Close to home with similar work schedules
and cultural affinity
VS
• Driven by labor arbitrage
• “Black Box”- lack of control and
visibility over the operation
• Quality concerns - Hard to
collaborate and drive innovation and
continuous improvement
• Significant time zone &
geographical differences with
language and cultural barriers (Asia-
based)
Traditional Outsourcing Outsourcing that works!

8. 8
The True Nearshore Destinations in the Americas
Costa Rica, Colombia & Mexico
• #1 LatAm Destination
• Maturity of the Services Sector &
experience supporting the US
• Multi-lingual skills
• Gov’t Support/Ease of Doing
Business
• Higher cost than Mexico
and Colombia
• High Concentration of
Captive Shared Services
• Smaller Labor Market
• 2nd Largest Labor Pool in
LatAm
• Low Costs
• Multinational Experience
• Political stability
• Ease of doing business
• Gov’t support
• Labor Force Quality
Challenges
• Low Costs
• Labor Force Quality
• Gov’t Support
• Emerging/growing
destination
• Multi-lingual capabilities
• Labor Flexibility
• More limited SSC experience
supporting the US
Highlights
Costa Rica ColombiaMexico

9. 9
Do you agree with the advantages of
nearshoring vs. offshoring?
1. Strongly Agree
2. Agree
3. Neutral
4. Disagree
5. Strongly Disagree

10. 10
So…Why
Costa Rica?

11. 11
• #1 English proficiency in Latin America
• #1 Education System in Latin America with the highest literacy rate (98%)
• Strong services sector with consistent growth year over year
• Central Time Zone with quick direct flights to most major U.S. Cities
• Strong Cultural Affinity to the US
• #1 Country in Innovation in LatAm by Global Innovation Index (2017)
• No Army! It was abolished in 1948
• Safest City in Latin America - recognized worldwide for its politically stability and peace.
• Solid Infrastructure & Utilities with 100% power and Telecom redundancy
Costa Rica has been consistently
ranked as the #1 nearshore
destination in Latin America

12. 2000 2018
1,061
65,904
2000 2018
6
172
62x 28x
Compared to 2000, employment is 62x and the number of
multinational companies is 28x
Costa Rica is the #1 Exporter of
high value added services in Latin America
Source: CINDE, 2019

13. 1.4%
7.3%
8.6%
4.8%
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Exports of selected industries as a % of GDP
Telecommunications, computer, and information services; and other business services Agriculture
Telecommunications, IT services, and other business services exports represent over 7% of the GDP
From Agriculture to an Industry &
Services Based Economy
Source: CINDE based on data from BCCR and PROCOMER, 2019

14. Over 170 World-Renowned Multinationals
have established Services Operations in the country

15. • Service offered in English
represents more than 79% in 3
of the top 5 processes.
• End-to-end centers also offer
services 24x7x365 in English,
Spanish, Portuguese, French,
German, Italian, Malay,
Japanese, Dutch, Polish,
Czech, Finnish, Mandarin
Over 79% of the services provided in English

16. Contact Centers Shared Services Other Digital Services
Finance &
Accounting
P2P, O2C, R2R
• Accounts
Payable
• Billing & Billing
Adjustments
• Accounts
Receivable,
Invoicing &
Collections
• Cash Application
• Credit Verification
• Fraud Control
• Auditing
• Reconciliation
• Cost Accounting
• Financial Reports
• Financial Planning
& Analysis
• Fixed Assets
• General Ledger
• Revenue Cycle
• Tax Filing &
Analysis
• Treasury
• Controlling
• Transfer Pricing
Supply Chain/
Procurement
• Procurement-
to-Pay
• Bidding
• Strategic
Sourcing &
Purchasing
• Transportation
planning and
execution
• Suppliers &
Vendor
management
• Inventory
allocation and
management
• Planning
• Forecasting/
Seasonality
• Customer
order tracking
(credit hold,
order
processing and
management
claims)
Human
Resources
• Payroll
• Regional
Recruitment
• Screening &
Staffing
services
• Talent
Management
• HR Planning &
Reporting
• Employee
Administration
• Expat
Relocations &
Training
• Travel &
Expenses
• Benefits &
compensation
• Hire to retire
Other
• Business
Knowledge
Analysis
• Business
Intelligence
• Organization
Analytics
• Data Entry &
Processing
• Master Data
Management
• Research & Data
Analysis
• R&D
• Business
Presentation
Design
• Portfolio Analysis,
Investment
Research
• Project, Process,
Contract & Product
Management
• Change
Management
• Risk Management
• Clinical data
reporting
• Contract reviewing
• Sales & Marketing
Digital Marketing
• Digital production:
multimedia, art
direction, graphic
design, storyboard
illustration, web
microsites, and
banner design
• Content & SEO
• Paid Ads
• Email Marketing
• Social Media
management
• Video production
• Gaming
• E-commerce
• Web Design,
Development &
Production
• User interface
design: UX / UI
• Mobile app
development (iOS
and Android)
• Consumer behavior
IT
• IT Global
Helpdesk
• IT Infrastructure
Operations –
Data Center &
Network Ops
• Cloud
Transformation
• Database
administration
• Cybersecurity
• Software
Development &
Maintenance
• DevOps
• Quality Assurance
& Testing
• Reporting &
Analytics
• Advanced
Analytics
• Big Data
• Robotic Process
Automation
• Customer
Service/Care (via
phone, e-mail &
chat)
• Technical Support
(Tier 1-4)
• Collections/legal
collections
• Simultaneous
Interpretation
• Video remote
interpreting
• Sales/B2B sales
• Billing
• Insurance validation
• Supply chain
support
• Seller/Vendor
support
• Marketing support
• Cloud support
Engineering &
Design
• Application
Engineering
• Orthopedic
Reconstruction &
Design
• Orthodontic 3D
Design
• Hardware design,
development,
testing &
validation
• Architecture
drawing & design
• CAD - CAM
Technology
support
• R&D+i
Service Companies have Become
Multi-Functional Centers

17. 17
What savings can
you expect from
nearshoring to
Costa Rica?

18. 18
It’s not just about labor arbitrage
Savings Opportunity Roadmap
One to one comparison of the
total labor cost of a resource in
US vs. a Nearshore Location
Most times the org structure can
be releveled to achieve better
span of control
Efficiencies gained from
centralization, process
improvement and automation (e.g.
RPA, Operational Analytics, etc.)
30%-50% 10%-20%
ONE TO ONE LABOR
SAVINGS
SPAN OF CONTROL
ADJUSTMENTS
PRODUCTIVITY
EFFICIENCIES
10%-20%

19. 19
Savings as high as 50%+ for transactional roles across AP, AR and R2R
Auxis 2019 Labor Savings Report for Finance & Accounting

20. 20
Savings as high as 50%+ for transactional roles across AP, AR and R2R
Auxis 2019 Labor Savings Report for Finance & Accounting
Link to download full report
for both F&A and IT positions:
www.auxis.com/2019-US-finance-labor-report-
outsourcing-costa-rica

21. 21
What would be your main driver for considering
outsourcing?
1. Reduce costs
2. Accelerate digital transformation & performance improvement
3. Increasing operational flexibility, agility & business continuity
4. Access to talent
5. Increase my team’s focus on higher value activities

22. 22
How has Costa Rica responded to COVID?
Costa Rica
A proven partner
for business
continuity,
operational
sustainability &
innovation
Invest with purpose. Resolve. Recover. Reimagine.
COLLABORATIVE
ECOSYSTEM TO DRIVE
INNOVATION
Multinationals have developed projects in technology transfer, innovation, and collaboration with the
national academia, the international community and the Costa Rican Government, for the development of
new technologies to address this emergency. In addition, the country reinforced its retooling and reskilling
program to strengthen industry 4.0 skills for the workforce displaced by the pandemic.
WORK-FROM-HOME AND BUSINESS
CONTINUITY STRATEGY
During COVID-19, Costa Rica’s operational sustainability has been supported by
its resilient & collaborative business environment, robust connectivity & digital
infrastructure, and digitalized and adaptable human talent.
RESPONSE AND RISK MANAGEMENT WITH
STRONG FOUNDATIONS
RISING PRODUCTIVITY
Service companies are implementing 100% WFH
schemes while servicing the world from Costa
Rica since early March
Of manufacturing & life sciences sectors have
experienced no business disruption, complying
with all sanitary measures
Mobile phone penetration
Mobile internet penetration (highest in Latin
America)
Services exports in ITC grew nearly 7% and
corporate services grew 9.4% even during
COVID. (March ‘19 – May ‘20)
Ongoing commitment towards talent building and
workforce stability: +50,000 scholarships in Coursera for
reskilling in jobs of the future paths.
One of the lowest death rates per million
citizens in the Americas and the world
Universal health coverage across the
nation
Solid primary care base and access to
health services since 1941
Costa Rica invests 8.0% if its GDP in
healthcare, one of the largest
proportions within OECD countries
98%
100%
170%
90%

23. 23
Panel Discussion

24. 24
Offshore vs. Nearshore vs.
Onshore

25. 25
Captive vs. Outsourcing:
Which model makes more sense?

26. 26
Finance & IT:
What to outsource?

27. 27
Service Level Agreements

28. 28
Automation & Continuous Improvement:
The Role of Your Outsourcer

29. 29
5. Given what you have learned today, what do
you now believe to be the most positive aspect of
nearshoring?
1. Communications in real time, all the time / Easy for short visits
2. Cultural similarities
3. Separation of work for business continuity/disaster recovery
4. Agility & quality of the talent
5. Lower cost

30. 30
When have you seen
outsourcing go wrong

31. 31
What to look for in your
outsourcing provider

32. 32
Q&A

33. 33
Would you like to schedule a consultation
with Auxis to explore how nearshore
outsourcing can fit your organization?
1. Yes
2. No

34. 34
Thank you for
joining us today!
Eric Liebross
Sr. Managing Director, Auxis
Eric.Liebross@auxis.com
Jon Butler
Principal & Founder, StrategyShore
Jon.butler@strategyshore.com
Fabiana Corredor
Sr. Marketing Manager, Auxis
Fabiana.corredor@auxis.com