4. “…if the people are not trained
and are not receiving the right
kind of training, then we have to
go elsewhere — either
elsewhere in the United States
or elsewhere in the world —
because at the end of the day,
we have to find the people.”
Business Lexington's
interview with Tom Blodgett,
ACS
Saturday, January 23, 2010
6. Location Assestment Framework
Honduras - San Pedro Sula - Altia Business Park
Scale and Quality
Business Catalyst
Infrastructure
Quality of Life
Risk Profile
Cost
Saturday, January 23, 2010
7. 1. Scale and Quality
Labor Pool Skills Availability Cultural affinity Graduate Output
Skills and Scalability
Saturday, January 23, 2010
8. English skills…bilingual schools
are the source…
Statistics:
Guatemala, 26 bilingual schools
El Salvador, 56 bilingual schools
Nicaragua, 5 bilingual schools
Costa Rica, 35 bilingual schools
Honduras, 410 bilingual schools
Several associations:
• Asociacion de Escuelas
Bilingues de Honduras
• AASCA -
• Asociacion Noroccidental de
Escuelas Privadas Bilingues
• Part of SACS (Southern
Association of Colleges and
Schools)
http://en.wikipedia.org/wiki/List_of_schools_in_Honduras
Saturday, January 23, 2010
10. Important Data
•Largest English speaking and IT population in Central America
(410 bilingual schools), almost 100% more than the rest of
Central American countries combined (Approximately
70,000-85,000 people in the country). Each year this number
grows by 7,000 high school graduates, and more than 15,000
college graduates per year just in San Pedro Sula
•Safe & Cost-Competitive Near Shore Location: Honduras offers
the most cost competitive solution in the near shore area in a
safe, stable environment
•Positive Business Environment: Solid legal framework for
investment ensure the safety and continuity of business
relations.
Saturday, January 23, 2010
11. What can we expect from Honduras?
•Honduras will become the new hot spot for BPO and
contact centers due to several factors:
– Labor shortage in neighbor countries: Gua, ES, Ni and CR are all
struggling to supply and sustain growth in this industry
– World financial crisis will keep on putting pressure for companies for
outsourcing services, and Latin America/Central America is a
perfect nearshore location
– Competitive labor costs will create an increasing interest in opening
an operation in Honduras
– U.S. Hispanic market will keep on boosting bilingual services
– Honduras will be the only country in Central America that will be
able to supply the necessary labor pool, which will provide
sustainability to the indsutry
Saturday, January 23, 2010
12. Important Data
•Cultural affinity – more than 100 years with presence of
U.S. companies succesfully operating in Honduran territory
•More than 25 yrs of democracy – catalogued by the World
Economic Forum as a country with good future
perspectives
•Multinational carriers presence (Milicom – Navega,
Multidata, Digicel (Irish),Telecorp, Cablecolor, Telcel
(Mexican – Claro)
•Honduras has the human capital and the passion for
service culture: opportunity for lower cost operations
due to attractive labor rates
Saturday, January 23, 2010
13. 2. Cost
Cost of Operations Cost of Training Cost of Real Estate Cost of Bandwidth Cost of Living
& Energy
Savings
Saturday, January 23, 2010
14. Decision Matrix comparing Offshore
Locations
CRITERIA
PHILLIPINES INDIA CANADA IRELAND PANAMA BRAZIL HONDURAS
AVERAGE AGENT
SALARY PER YEAR
(US $) 4,000-6,000 3,500-5,000 25,000-40,000 25,000-40,000 6,500-8,500 7,500-10,000 4,000-6,000
REAL ESTATE COST
(RENT PER SQUARE
METER) 26.00 18.00 35.00 38.00 26-28 40.00 18.00
REAL ESTATE COST
(RENT PER SQUARE
FT/YR) 29.00 20.07 39.03 42.38 31.23 44.61 20.07
REAL ESTATE COST
(BUYOUT PER
SQUARE METER) 3,000 2,000 3,800 4,000 3000-3500 4,000-4,500 1,800
TELECOMMUNICAT
ION (E1) 1,000 - 1,400 1,100 - 1,500 650 - 800 1,300 - 1,700 1,200 - 1,500 1,000 - 1,500 900 - 1,200
Saturday, January 23, 2010
15. Decision Matrix comparing Offshore
Locations
CRITERIA
HONDURAS MEXICO COSTA RICA CHILE
AVERAGE AGENT
SALARY PER YEAR (US $)
4,000-6,000 10,000-12,000 8,000-10,000 10,000-12,000
REAL ESTATE COST
(RENT PER SQUARE
METER) 18.00 35.00 26.00 30.00
REAL ESTATE COST
(RENT PER SQUARE FT/
YR) 20.07 39.03 29.00 33.46
REAL ESTATE COST
(BUYOUT PER SQUARE
METER) 1,800 3,800 2,700-3,500 3,000-3,500
TELECOMMUNICATION
(E1) 900 - 1,200 1,200 - 1,700 2,000-3,100 1,200 - 1,500
Saturday, January 23, 2010
16. But we need to compare operating costs in
Offshore locations...
• In our financial and feasibility
models we must include:
• Direct salaries
• Management costs
• Support staff salaries
• Training
• Real estate
• Technology and communication
Saturday, January 23, 2010
17. Cost Comparisson between
Central American countries
Honduras Costa Rica Nicaragua El Salvador Guatemala
Labor pool availability 85,000 15,000 4,000 Less than 5,000 Less than 5,000
Bilingual schools 410 35 5 55 26
Average agent salary (bilingual) $448.00 $650.00 $575.28 $550.00 $540.00
Labor shortage
Guatemala has
due to a small
Honduras has Labor pool has problems
amount of
the potential to Labor shortages forced the supplying bilingual
Human Resource become the have caused
bilingual schools
government to start labor force due to
has
Comments next BPO and high rotation an English training a shortage caused
deaccelerated
contact center and wage/cost program, but will mainly on the low
the
hub due to increases struggle in the next amount of
establishment of
labor availability five years bilingual schools
contact centers
per capita
and BPOs
Telecommunication Number of service providers 31 1 9 13 19
Average Internet Cost per Mega $200.00 $526.00 $490.00 $465.00 $525.00
and service E1 $1,089.00 $2,960.00 $3,500.00 $2,400.00 $2,100.00
providers DS3 (Clear channel) $22,000.00 $26,080.00 $30,000.00 Not available Not available
Saturday, January 23, 2010
18. Cost comparisson between
Central American countries
Honduras Costa Rica Nicaragua El Salvador Guatemala
Cost per square feet per year $20.07 $27.88 $17.84 $21.00 $14.00
Altia Business Park Low offer on
can offer turn key office space Guatemala has
projects, including that can a large office
This is one of the
Real estate Comments
everything needed
highest costs in
Limited office comply with space offer,
to start an operation space availability contact center but presents
Central America
in the shortest time, and BPO high traffic
reducing curve of requirements, problems
experience costs high costs
Energy cost per Kw-Hr 0.15-.17 0.09-0.13 0.16-0.21 0.16-0.20 0.16-0.19
Problems with
Energy costs Yes national grid and
Redundant systems energy supply
Saturday, January 23, 2010
19. Stages of Development of Contact Center
and BPO in Central America
Under Developed
New entrants development
Labor Pool Location Maturity
Availability
Honduras
% of Savings Potential
in Operating Costs Costa Rica
Panama
Guatemala
El Salvador
Nicaragua
Honduras
Nicaragua
Guatemala Costa Rica
El Salvador Panama
Saturday, January 23, 2010
20. Important Data
•Altia Business Park will become the most modern
technology and business park in the region:
• Energy redundant – Energy efficient: we have designed the park as
energy self sufficient, but also interconnected to the national grid. We
have designed all the buildings aimed to obtain the LEED certification.
This will be translated to a cost competitive advantage on the
power bill (20-30% lower than standard consumption)
• Connectivity redundancy – high quality, cost effective
telecommunication
• World class environment – we can deliver turn key office space based
on your requirements and needs
• World class security
• Fully 24/7/365 operational capability
Saturday, January 23, 2010
21. Important Data
•Honduras is connected to the NAP of the Americas through
3 submarine cables, which provide reliable communications
infrastructure
•Honduras has one of the largest fiber optics network in the
region. Lowest telecommunication cost in the whole
region
•Sustained economic growth of more than 5.5% during the
last 7 years; it is expected to have a 3% growth during
2010
•Honduran recently elected government has established the
service sector as a national priority
Saturday, January 23, 2010
22. 3. Business Catalyst
Government Benefits Competitive Landscape Untapped Labor Currently
Incentives Pool Employed
Business Environment
Saturday, January 23, 2010
24. Important Data
•70% of business visitors to Honduras arrive through San Pedro
Sula’s airport
•San Pedro Sula is the motor of the Honduran economy,
generating more than 60% of the national GDP
•San Pedro Sula has become a vibrant economic and industrial
city (1.1 M people) with 6 main universities (total population of
50,000 students) and 52 bilingual schools in the urban area and
161 in Cortes, and a total of 410 in Honduras
•San Pedro Sula has daily/direct flights to New York, Atlanta,
Houston, Miami and connected to Los Angeles, San Francisco,
Mexico, Central and South America
Saturday, January 23, 2010
31. Internet costs (VoIP)
This price has gone down to US$200.00, information provided by Mario Alvarenga/Navega, January 2010
Source: Julio Herrera, Navega Commercial Manager,March 2009 (Prices in US$)
Saturday, January 23, 2010
32. Important Data
•Altia Business Park is based as a free zone, which means you
are exempt of any local or national tax.
•Competitive real estate cost
•We have in place a network of strategic partners and alliances
to help you reduce your curve of experience costs and your time
to have running an operation
•Any BPO or contact center will have at their service a
multidisciplinary team aimed to help you have a successful
operation: human resource, engineering, logistics, etc
Saturday, January 23, 2010
33. Altia Business Park - Strategic Geographic
Location (public transportation routes)
25 minutes, moderate traffic
Saturday, January 23, 2010
34. Building Timeline
70% advance on civil works
First tenants will
100% advance
be moving their
offices and Infrastructure
operations
May ’09 Aug ’09 Oct ’09 Dec ’09 March ’09
We are on the 11th Interior of Lobby Connectivity and
floor (14 floors) design finished power Building
infrastructure
installation
Saturday, January 23, 2010
36. 5. Risk Profile
Commercial Risk Political Risk Natural Risk Social Risk
Saturday, January 23, 2010
37. Important Data
• Honduras has recently designed a Nation Plan for the next
30 yrs. This was elaborated by leaders, academics,
businessmen, social institutions and represents the vision
of a better Honduras
• On November ’09, we elected a new government and
President Lobo has established as his priority to execute
the Nation Plan
• Altia Business Park spearheads the new and modern
Honduras, focussed on developing a service industry
based on our competitive advantages
Saturday, January 23, 2010
38. 6. Quality of Life
Social Infrastructure like
Non work culture Availability of Recreation/
Education institutions,
Leisure facilities
hospitals
Saturday, January 23, 2010
41. “Altia Business Park, located in San Pedro Sula near
two of its premier technology universities, is the first
designated Free Zone facility offering all the tax and
customs duty benefits, tailored for IT and BPO firms. Its
prime location in the main commercial and industrial city
of Honduras with a captive population of over 1 million is
a critical element for attracting and retaining quality
human resources and managers.”
Saturday, January 23, 2010
42. Conclusions
Honduras is a country with the right
infrastructure and the human capital, perfect for a near
shore operation; a vibrant city with the business
environment aimed for successful ventures; a world
class business and technology park with all the
required energy, telecommunication, security and
modern office space, all of them together providing a
real competitive cost advantage.
Saturday, January 23, 2010