NASSCOM ILF 2014: Latin America and Caribbean Opportunities for Growth: Anupam Govil, Avasant


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NASSCOM ILF 2014: Latin America and Caribbean Opportunities for Growth: Anupam Govil, Avasant

  1. 1. Latin America and Caribbean Opportunities for Growth Anupam Govil © 2014 Avasant LLC. All Rights Reserved. Proprietary and Confidential. No part of this document may be reproduced in any form or by any electronic or mechanical means , including information storage and retrieval devices or systems, without prior written permission from Avasant LLC. Feb 12, 2014
  2. 2. Latin America & Caribbean The Big Picture The Latin American-Caribbean (LAC) is fast developing into an attractive market in itself growing beyond just being a nearshore delivery location. Literacy Rate (Average) LatAm Domestic IT-BPO Market USD 44Bn > 85% % World GDP (PPP) % World Population 9% 9% World Bank Doing Business Rankings ’13- Top 10 in Latin America-Caribbean 40 42 © 2014 Avasant LLC. All Rights Reserved 43 53 55 66 79 88 94 102 109 2 * Pop > 1Million
  3. 3. Latin American Outsourcing Landscape Getting Bigger & Better Latin America is the fastest growing outsourcing agglomeration benefiting from its proximity to the US, rise in bi-lingual service demand and fast growing domestic markets. Country AT Kearney GSLI Rankings ‘11 (+/-‘09) Gartner/ KPMG Analysis Argentina 30 (-5) Established Brazil 12 (+5) Established Chile 10 (-2) Established Colombia 43 (-) Emerging Strong Costa Rica 19 (+3) Established Ecuador -- High Potential Guatemala -- Emerging Strong 6 (+5) Established -- High Potential 34 (+9) Emerging Strong -- High Potential 41 (22) Established El Salvador -- High Potential Perú -- LATIN AMERICAN OUTSOURCING High Potential México Nicaragua Panamá Puerto Rico Uruguay © 2014 Avasant LLC. All Rights Reserved ˃ Largest agglomeration of outsourcing ready nations ˃ The ‘Offshore’ IT+BPO market is estimated to touch US$ 9.2bn by ‘14 (CAGR 12%)* ˃ Lead by Brazil, Chile and Mexico (IT+BPO) ˃ Significant presence in IT/CC (multi-lingual) space Guatemala, Costa Rica, Colombia ˃ Strong macro economic performance esp. by established locations ˃ Proactive government support through incentives, tax breaks, SEZ’s etc. ˃ Improving/positive investment climate ˃ Ability to provide services across the value chain in IT/BPO/CC ˃ Multi lingual capability ˃ Shrinking difference in costs vs. offshore locations *Source-PwC 3
  4. 4. Caribbean Outsourcing Landscape Untapped Potential Caribbean is a small but increasingly significant part of the Nearshore market. The region is fast emerging as a credible location not only for voice based CC segment but also for higher value BPO services. For service providers, Caribbean also provides access to a large untapped domestic market. Country Avasant Analysis ( ITeS Destination) Focus Area ˃ Largest agglomeration of ‘Nearshore’ English speaking talent pool ˃ The Caribbean and Central America ‘Nearshore’ BPO market is estimated at US$ 3bn ˃ Suited for voice based CC , transaction processing Jamaica Emerging Strong English CC services as well as high value F&A services ˃ Lead by Jamaica and Dominican Republic in the CC Dominican Republic Puerto Rico Emerging Strong Multilingual CC space . Belize and Puerto Rico registering consistent growth in the CC/BPO sector ˃ Locations like Trinidad better positioned to provide Moderate Potential Multilingual CC higher value , vertical specific BPO services ˃ Strong services sector background owing to the tourism industry Trinidad Barbados High Potential Moderate Potential F&A BPO English CC ˃ High unemployment rate ensuring adequate talent availability ˃ Varying levels of government support through incentives, tax breaks, SEZ’s etc. Belize Moderate Potential English CC ˃ About 80% of the CC operations in the Caribbean are funded by US companies © 2014 Avasant LLC. All Rights Reserved 4
  5. 5. Latin America & Caribbean Market A Game Changer for Indian Service Providers? Indian service providers are ramping up nearshore presence through strategic acquisitions as well as setting up greenfield operations. Indian Service Provider Activity - 2013 Global Delivery Center in Jamaica- Kingston New Delivery Center in Brazil-São Paulo Initiates BPO Operations in Puerto Rico-Aguadilla F&A BPO from Trinidad and Tobago-Port of Spain New Delivery Center in Costa Rica-San Jose Global Delivery Center in Cost Rica-Alajuela Shared Service Center in Colombia-Bogota Over 25 Indian IT/BPO companies operate in 16 of the 22 key LAC countries employing over 29,000 local staff. © 2014 Avasant LLC. All Rights Reserved 5 *Includes Jamaica, Trinidad and Tobago from the Caribbean
  6. 6. India-LAC Cooperation Opportunities Galore Macro Level Factors Driving India-LAC Cooperation - Leveraging Close Trade Ties - Over USD 46.67 billion in total trade in ‘12-‘13 with Indian exports grossing over USD 15.7 billion. This is expected to touch USD 25 billion by ‘15 through effective cooperation. IT-BPO expected to form a significant part - Geo-Political Interests - Common interest of both regions in terms of business and strategic reasons - Cultural Ties - Deep cultural ties esp. with Caribbean countries make collaboration easier Industry Level Factors Driving India-LAC Cooperation - Nearshore Advantage - Easy access, similar time zones and greater cultural affinity provides a good balance to offshore locations - Growing Domestic Market - LatAm companies bring in the local market knowledge while Indian service providers bring industry/process experience - Easier Access to Prime Markets – Many LAC locations offer an easier access to key North American markets through trade agreements (NAFTA) easing sensitive offshoring/visa restriction issues - Unique Skill sets – Multi-lingual talent, Creative and Web services, Mobile and Agile development © 2014 Avasant LLC. All Rights Reserved 6
  7. 7. Anupam Govil Partner, Avasant- President, Avasense