The Latin American Tech Boom

[TTinCO]

<TABLE class=MsoNormalTable style="WIDTH: 309pt; mso-cellspacing: 0in; mso-padding-alt: 4.5pt 4.5pt 4.5pt 4.5pt" cellSpacing=0 cellPadding=0 width=412 border=0><TBODY><TR style="mso-yfti-irow: 0"><TD style="BORDER-RIGHT: #ece9d8; PADDING-RIGHT: 4.5pt; BORDER-TOP: #ece9d8; PADDING-LEFT: 4.5pt; PADDING-BOTTOM: 4.5pt; BORDER-LEFT: #ece9d8; PADDING-TOP: 4.5pt; BORDER-BOTTOM: #ece9d8; BACKGROUND-COLOR: transparent"><TABLE class=MsoNormalTable style="WIDTH: 350.25pt; mso-cellspacing: 0in; mso-padding-alt: 0in 0in 0in 0in" cellSpacing=0 cellPadding=0 width=467 border=0><TBODY><TR style="mso-yfti-irow: 0; mso-yfti-lastrow: yes"><TD style="BORDER-RIGHT: #ece9d8; PADDING-RIGHT: 0in; BORDER-TOP: #ece9d8; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; BORDER-LEFT: #ece9d8; PADDING-TOP: 0in; BORDER-BOTTOM: #ece9d8; BACKGROUND-COLOR: transparent">Why <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-comffice:smarttags" /><st1lace>Latin America</st1lace> Is the New <st1:country-region><st1lace>India</st1lace></st1:country-region>
<NOBR>By Tim Rogers, </NOBR> <st1:date Year="2005" Day="27" Month="7" ls="trans">July 27, 2005</st1:date>
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</TD></TR><TR style="mso-yfti-irow: 1; mso-yfti-lastrow: yes"><TD style="BORDER-RIGHT: #ece9d8; PADDING-RIGHT: 4.5pt; BORDER-TOP: #ece9d8; PADDING-LEFT: 4.5pt; PADDING-BOTTOM: 4.5pt; BORDER-LEFT: #ece9d8; PADDING-TOP: 4.5pt; BORDER-BOTTOM: #ece9d8; BACKGROUND-COLOR: transparent" vAlign=top>With its beaches, golf courses, <st1:country-region><st1lace>cuba</st1lace></st1:country-region> libres, and rock-solid social-security system, it's no wonder that <st1:country-region><st1lace>Costa Rica</st1lace></st1:country-region> is luring American executives who want an alternative to Indian outsourcing. After sending thousands of technology and call-center jobs to India and the Philippines, major U.S. companies including Dell (DELL) and Procter & Gamble (PG) are now looking to Latin America to meet their outsourcing -- or rather, "nearsourcing" -- needs. Like <st1:country-region><st1lace>India</st1lace></st1:country-region> before them, <st1:country-region><st1lace>Brazil</st1lace></st1:country-region>, <st1:country-region><st1lace>Nicaragua</st1lace></st1:country-region>, <st1:country-region><st1lace>Panama</st1lace></st1:country-region>, and especially <st1:country-region><st1lace>Costa Rica</st1lace></st1:country-region> are embracing the trend with business-friendly policies and aggressive marketing. "<st1:country-region><st1lace>Costa Rica</st1lace></st1:country-region> is moving up very fast," says Ram Mohan, IT manager for P&G, which operates a 1,000-employee center in <st1lace><st1:City>San José</st1:City>, <st1:country-region>Costa Rica</st1:country-region></st1lace>, to handle financial and infrastructure systems support. <o></o>

Currently, 24,500 Costa Ricans work in call-center and IT jobs, doing everything from fielding complaints about shampoo to answering questions about insurance. The number of call-center positions alone is expected to double in the next two years, says Federico Cartín, executive director of the nonprofit Costa Rican Chamber of Information and Communication Technology. In <st1lace>Latin America</st1lace> as a whole, the number of call-center workstations will hit 730,000 in 2008, up from 336,000 in 2004, according to market-research firm Datamonitor. <st1:country-region><st1lace>Brazil</st1lace></st1:country-region> is expected to get a big slice of that business, thanks to some of the lowest labor costs in <st1lace>South America</st1lace>. Business promotion agency ProNicaragua expects its homeland to create 3,000 new jobs in the next few years, while Dell already employs 2,000 workers at its <st1:country-region><st1lace>Panama</st1lace></st1:country-region> call center. <o></o>

It helps that the scenic shores of <st1lace>Central America</st1lace> are just a five-hour flight from the East Coast, but that's not the only appeal. The region also shares two time zones with the <st1:country-region><st1lace>United States</st1lace></st1:country-region> -- the better for handling phone calls -- and <st1:country-region><st1lace>Costa Rica</st1lace></st1:country-region>, in particular, is full of well-educated workers, having abolished its army more than 50 years ago and rechanneled the funds into education, including mandatory English training. Though its progressive labor codes translate into relatively high wages, the "Switzerland of Central America" also boasts an extensive social-security system that makes it easy to perform background checks. <o></o>

<TABLE class=MsoNormalTable style="WIDTH: 150pt; mso-cellspacing: 0in; mso-padding-alt: 2.25pt 2.25pt 2.25pt 2.25pt; mso-table-lspace: 2.25pt; mso-table-rspace: 2.25pt; mso-table-anchor-vertical: paragraph; mso-table-anchor-horizontal: column; mso-table-left: right; mso-table-top: middle" cellSpacing=0 cellPadding=0 width=200 align=right border=0><TBODY><TR style="mso-yfti-irow: 0"><TD style="BORDER-RIGHT: #ece9d8; PADDING-RIGHT: 2.25pt; BORDER-TOP: #ece9d8; PADDING-LEFT: 0in; PADDING-BOTTOM: 2.25pt; BORDER-LEFT: #ece9d8; PADDING-TOP: 2.25pt; BORDER-BOTTOM: #ece9d8; BACKGROUND-COLOR: transparent">Nearsourcing Hot Spots
Here are the countries and companies helping to turn Central and <st1lace>South America</st1lace> into the new hubs of bilingual outsourcing.<o></o>

</TD></TR><TR style="mso-yfti-irow: 1"><TD style="BORDER-RIGHT: #ece9d8; PADDING-RIGHT: 2.25pt; BORDER-TOP: #ece9d8; PADDING-LEFT: 2.25pt; BACKGROUND: #00aeef; PADDING-BOTTOM: 2.25pt; BORDER-LEFT: #ece9d8; PADDING-TOP: 2.25pt; BORDER-BOTTOM: white 1pt solid; mso-border-bottom-alt: solid white .75pt"><st1:country-region><st1lace>BRAZIL</st1lace></st1:country-region><o></o>

</TD></TR><TR style="mso-yfti-irow: 2"><TD style="BORDER-RIGHT: #ece9d8; PADDING-RIGHT: 2.25pt; BORDER-TOP: #ece9d8; PADDING-LEFT: 2.25pt; BACKGROUND: #f7eb00; PADDING-BOTTOM: 2.25pt; BORDER-LEFT: #ece9d8; PADDING-TOP: 2.25pt; BORDER-BOTTOM: white 2.25pt solid">SELLING POINTS Very low labor costs; a five-year suspension on export taxes for IT hardware and software.<o></o>

</TD></TR><TR style="mso-yfti-irow: 3"><TD style="BORDER-RIGHT: #ece9d8; PADDING-RIGHT: 2.25pt; BORDER-TOP: #ece9d8; PADDING-LEFT: 2.25pt; BACKGROUND: #00aeef; PADDING-BOTTOM: 2.25pt; BORDER-LEFT: #ece9d8; PADDING-TOP: 2.25pt; BORDER-BOTTOM: white 1pt solid; mso-border-bottom-alt: solid white .75pt"><st1:country-region><st1lace>COSTA RICA</st1lace></st1:country-region><o></o>

</TD></TR><TR style="mso-yfti-irow: 4"><TD style="BORDER-RIGHT: #ece9d8; PADDING-RIGHT: 2.25pt; BORDER-TOP: #ece9d8; PADDING-LEFT: 2.25pt; BACKGROUND: #f7eb00; PADDING-BOTTOM: 2.25pt; BORDER-LEFT: #ece9d8; PADDING-TOP: 2.25pt; BORDER-BOTTOM: white 2.25pt solid">SELLING POINTS Stable, neutral government; social-security system that enables preemployment background checks.<o></o>

</TD></TR><TR style="mso-yfti-irow: 5"><TD style="BORDER-RIGHT: #ece9d8; PADDING-RIGHT: 2.25pt; BORDER-TOP: #ece9d8; PADDING-LEFT: 2.25pt; BACKGROUND: #00aeef; PADDING-BOTTOM: 2.25pt; BORDER-LEFT: #ece9d8; PADDING-TOP: 2.25pt; BORDER-BOTTOM: white 1pt solid; mso-border-bottom-alt: solid white .75pt"><st1:country-region><st1lace>NICARAGUA</st1lace></st1:country-region><o></o>

</TD></TR><TR style="mso-yfti-irow: 6"><TD style="BORDER-RIGHT: #ece9d8; PADDING-RIGHT: 2.25pt; BORDER-TOP: #ece9d8; PADDING-LEFT: 2.25pt; BACKGROUND: #f7eb00; PADDING-BOTTOM: 2.25pt; BORDER-LEFT: #ece9d8; PADDING-TOP: 2.25pt; BORDER-BOTTOM: white 2.25pt solid">SELLING POINTS Very low overhead; influx of foreign investment.<o></o>

</TD></TR><TR style="mso-yfti-irow: 7"><TD style="BORDER-RIGHT: #ece9d8; PADDING-RIGHT: 2.25pt; BORDER-TOP: #ece9d8; PADDING-LEFT: 2.25pt; BACKGROUND: #00aeef; PADDING-BOTTOM: 2.25pt; BORDER-LEFT: #ece9d8; PADDING-TOP: 2.25pt; BORDER-BOTTOM: white 1pt solid; mso-border-bottom-alt: solid white .75pt"><st1:country-region><st1lace>PANAMA</st1lace></st1:country-region><o></o>

</TD></TR><TR style="mso-yfti-irow: 8"><TD style="BORDER-RIGHT: #ece9d8; PADDING-RIGHT: 2.25pt; BORDER-TOP: #ece9d8; PADDING-LEFT: 2.25pt; BACKGROUND: #f7eb00; PADDING-BOTTOM: 2.25pt; BORDER-LEFT: #ece9d8; PADDING-TOP: 2.25pt; BORDER-BOTTOM: white 2.25pt solid">SELLING POINTS Excellent telecommunications infrastructure; political and economic stability.<o></o>

</TD></TR><TR style="mso-yfti-irow: 9; mso-yfti-lastrow: yes"><TD style="BORDER-RIGHT: #ece9d8; PADDING-RIGHT: 2.25pt; BORDER-TOP: #ece9d8; PADDING-LEFT: 0in; PADDING-BOTTOM: 2.25pt; BORDER-LEFT: #ece9d8; PADDING-TOP: 2.25pt; BORDER-BOTTOM: #ece9d8; BACKGROUND-COLOR: transparent">Sources: Costa Rican Chamber of Information and Communication Technology; ProNicaragua; listed companies<o></o>

</TD></TR></TBODY></TABLE>To counter <st1:country-region><st1lace>Costa Rica</st1lace></st1:country-region>'s image as an underdeveloped banana republic, the Chamber of Information and Communication Technology has a new campaign promoting the country as "green and smart." Intel, which has been manufacturing microchips in <st1:country-region><st1lace>Costa Rica</st1lace></st1:country-region> since 1998, recently launched a software division there, while call-center operator Sykes Latin America employs Costa Ricans to help its corporate clients do everything from answer tech-support questions to serve customers who've lost their credit cards. <o></o>

Other burgeoning hubs are also making a concerted effort to attract IT business. <st1:country-region><st1lace>Nicaragua</st1lace></st1:country-region>, where an influx of foreign investment is helping to pull the country out of its war-torn past, has created an online database to track the bilingual employee pool. When ProNicaragua launched Nicasearch.com last year, more than 4,200 applicants registered online. Medical-services provider Almori is currently the largest bilingual call-center employer, but ProNicaragua expects business to increase rapidly. Meanwhile, <st1:country-region><st1lace>Brazil</st1lace></st1:country-region> is moving to attract business by suspending export taxes on IT hardware and software for the next five years. Citibank and IBM (IBM) are among the companies already sending work there. And who can blame them? With all due respect to Mumbai, we're betting most American execs would rather spend their time on the road in <st1lace>Rio</st1lace>. <?xml:namespace prefix = v ns = "urn:schemas-microsoft-com:vml" /><v:shapetype id=_x0000_t75 stroked="f" filled="f" path="m@4@5l@4@11@9@11@9@5xe" oreferrelative="t" o:spt="75" coordsize="21600,21600"><v:stroke joinstyle="miter"></v:stroke><v:formulas><v:f eqn="if lineDrawn pixelLineWidth 0"></v:f><v:f eqn="sum @0 1 0"></v:f><v:f eqn="sum 0 0 @1"></v:f><v:f eqn="prod @2 1 2"></v:f><v:f eqn="prod @3 21600 pixelWidth"></v:f><v:f eqn="prod @3 21600 pixelHeight"></v:f><v:f eqn="sum @0 0 1"></v:f><v:f eqn="prod @6 1 2"></v:f><v:f eqn="prod @7 21600 pixelWidth"></v:f><v:f eqn="sum @8 21600 0"></v:f><v:f eqn="prod @7 21600 pixelHeight"></v:f><v:f eqn="sum @10 21600 0"></v:f></v:formulas><vath o:connecttype="rect" gradientshapeok="t" o:extrusionok="f"></vath><o:lock aspectratio="t" v:ext="edit"></o:lock></v:shapetype><v:shape id=_x0000_i1025 style="WIDTH: 11.25pt; HEIGHT: 10.5pt" alt="" type="#_x0000_t75"><v:imagedata o:href="http://img.timeinc.net/b2/images/dingbat.gif;" src="file:///C:\DOCUME~1\ttomich\LOCALS~1\Temp\msohtml1\01\clip_image001.gif"></v:imagedata></v:shape>

http://www.business2.com/b2/web/articles/0,17863,1083358,00.html

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[wolfie_cr]

I saw a study where CR was third after India and Philippines

The bottleneck here is going to be fluent English, I was offered a position in one of Cisco's Technical Support Centers but the wage they were offering me........after taxes after gas and a lot of other issues........well I rather take a clerk job at any sportsbook

I have heard reliable reports that Procter and Gamble and Sykes (both have huge operations centers here) absolutely hate Egaming as they pay higher wages and absorb a lot of employees that have good English skills

 

[AdamSelene]

having abolished its army more than 50 years ago and rechanneled the funds into education, including mandatory English training.

What a joke that is. Total government PR bullshit.

Unless english education is improved dramatically, CR does not have a lot of room for growth in this industry. You have public schools with Nica teachers that can't speak english themselves, and all but the most expensive private schools have english teachers that are non-fluent and unqualified to teach.

At the same time, CR government wants to crack down on foreigners teaching english w/o a work permit, and CR government requires legal foreign exchange teachers to pay 50% of their salary in taxes.

Not to mention CableTica doesn't even broadcast an English-language alternative audio track for most its children's programming (Disney Channel, Discovery Kids, etc).

 

[wolfie_cr]

"social-security system that enables preemployment background checks"

how does the social security system (Caja) helps in doing ANY background check?

perhaps the point is that they think that it works as having a ID number similar to the Social Security number in the States?

btw Adam, the teaching of English has increased A BUNCH , I know its little but before there was ZERO in public schools and I believe that now there is some of that

 

[mudbone]

Last fall I met an older American businessman in San Jose at a bar and as we got to talking he told me he was looking at moving a call center to Costa Rica. I asked him why and he mentioned a lot of the same things as the article TTinCO posted. He had been to both India and Costa Rica to scope them out.


He also said something to the effect of, "All things being equal, at my age, I'd rather catch a 4 hour flyt to Costa Rica and stay in a nice hotel than fly 20 hours to India and stay in place with no hot water.

I think in the future you will see more and more call centers there. It's got better telecom and internet infrastructure than India, the people that do speak English are not generally as heavily accented as in India. The one thing India has going for it is extremely low wage rates, like $2.00 an hour in non-technical call centers. The Philippines is very similar to India with regards to call centers.

 

[WildBill]

I read this article some time ago and was astounded too. CR is just not competitive against India or Philippines. The wages are generally 3 times higher for like positions and the taxes are generally more prohibitive. The advantages are pretty slim, location and same time zone. Is it cheaper than the US? Of course, but only to a certain degree. The article did talk about Nicaragua which does have more upside at least for the small percentage of population you can find that speaks English.

The biggest hassle this article doesn't even touch on is the perverse drag on productivity having state-run utilities running the show. Productivity and costs in Panama have dropped due to some privatization, CR tries to do something modest and it seems the country comes to a standstill for a strike. Until that changes I really wonder how efficient the country can be in making a truly significant splash in the globalization war.

CR's best hope IMO is to focus on being more consumer driven economy. Neighbors can manufacture for cheap and provide cheap labor, the way to get ahead is to make the domestic economy more vibrant and the way to that is cut back on those prohibitive tariffs. No excuse for the cost of living in CR to be higher than in the US, but in like for like terms it is.

 

[AdamSelene]

Well, from the perspective of offshore gaming, India and the Philipines are not competitive with Costa Rica. Timezone, english dialect, industry knowledge, supporting companies, etc.

Even just payment processing -- Party Poker's call center in India has people that speak a dialect/accent of english that is completely incomprehesible. I nearly cancelled my account before they managed to approve my deposit.

I just don't see CR supporting huge call centers wanting english-fluent staff paying wages less than the gaming industry is already paying.

 

[Macro_Wiz]

I do see it as an opportunity for small business though. I don't think it would be that hard for a start up company to obtain a few solid programmers, holding a variety of skills in all major aspects of development. Regardless of spoken lag., as long as they can code. I think it could be done cheaper from CR then from here in the states. I'm a contractor for a company here called www.biztech.com . Something modeled similar to their business layout could be very profitable from a Latin country. Assuming you have a solid client list... or even if u need to build one from there as start up.

plz correct me if I'm wrong...

 

[mudbone]

Actually, India is forecasted to lose call center share big time and somebody has to pick it up (I'll post the article at bottom). Just goes to show cheapest ain't always best. My guess is Philippines will be number one.

Then to me comes Central America - specifically Costa Rica & Panama because of the telecom infrastructure with the Mayan and Argos cables supplying bandwidth. Bandwidth costs are close to being as cheap as those in the States and Europe but labor costs are about 1/4.

Here's the article from CNN Money:

<TABLE cellSpacing=0 cellPadding=0 width=580 border=0><TBODY><TR vAlign=top><TD style="PADDING-TOP: 10px">Is India's outsourcing honeymoon over?
Report: Labor shortage and wage inflation in outsourcing market has other countries in hot pursuit.
August 24, 2005: 10:08 AM EDT
By Parija Bhatnagar, CNN/Money staff writer
<!--startclickprintexclude--></TD></TR><TR><TD class=storytext style="PADDING-TOP: 20px" vAlign=top><!-- CONTENT --><!--endclickprintexclude--><!--startclickprintexclude--><TABLE style="PADDING-LEFT: 10px" cellSpacing=0 cellPadding=0 width=220 align=right border=0><TBODY><TR><TD style="PADDING-BOTTOM: 15px" align=middle>

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<SCRIPT>if(cnnEnableCL){if(location.hostname.indexOf('.cnn.com')==-1){cnnAddCSI('contextualLinks','/.element/ssi/contextual/story.html','origin=money&site=cnn_monbiz_dyn_ctxt&category=moneyworldbiz&url=http://robots.cnnfn.com/2005/08/23/news/international/india_outsourcing/index.htm');}else{cnnAddCSI('contextualLinks','http://cl.cnn.com/ctxtlink/jsp/money-story.jsp','origin=money&site=cnn_monbiz_dyn_ctxt&category=moneyworldbiz&url=http://robots.cnnfn.com/2005/08/23/news/international/india_outsourcing/index.htm');}}</SCRIPT><IFRAME id=iframecontextualLinks style="VISIBILITY: hidden" name=iframecontextualLinks align=right src="http://cl.cnn.com/ctxtlink/jsp/money-story.jsp?domId=contextualLinks&time=1124937172781&origin=money&site=cnn_monbiz_dyn_ctxt&category=moneyworldbiz&url=http://robots.cnnfn.com/2005/08/23/news/international/india_outsourcing/index.htm" width=0 height=0></IFRAME></TD></TR></TBODY></TABLE><!--endclickprintexclude-->NEW YORK (CNN/Money) - Surprise! India's reign as the world's "Outsourcing King" may be slipping, even with its rock-bottom call center costs.

<!--startclickprintexclude--><!--endclickprintexclude-->A new report from market research firm Gartner, Inc. warns that a labor crunch and rising wages could erode as much as 45 percent of India's market share by 2007.

<!--startclickprintexclude--><!--endclickprintexclude--><SCRIPT language=JavaScript><!--var clickExpire = "-1";//--></SCRIPT>Indian industry watchers acknowledge that the country's outsourcing industry -- its golden goose of the moment -- is indeed facing a "serious" problem.

<!--startclickprintexclude--><!--endclickprintexclude-->In an interview with CNN/Money from New Delhi, Kiran Karnick, president of the National Association of Software and Service companies (NASSCOM), said he's concerned that these challenges could stymie India's strong double-digit growth in outsourcing services.

<!--startclickprintexclude--><!--endclickprintexclude-->NASSCOM is the trade body representing India's information technology (IT) software and services industry.

<!--startclickprintexclude--><!--endclickprintexclude-->More importantly, the Gartner report cautions that a host of emerging countries such as the Philippines, Malaysia, Vietnam and Eastern European nations including Hungary and Poland, are also starting to challenge India's leadership in offshore business process outsourcing (BPO.)

<!--startclickprintexclude--><!--endclickprintexclude-->Many U.S. and international companies maintain that outsourcing business processes such as customer service call centers, administrative and accounting processes to low-cost and low-wage countries like India helps to keep down their own cost of doing business.

<!--startclickprintexclude--><!--endclickprintexclude-->Analysts say India's "go to" status as a premier outsourcing destination is a function of the country's vast pool of about 2.5 million mostly English-speaking graduates that are ready to enter the workforce annually.

<!--startclickprintexclude--><!--endclickprintexclude-->But India can't afford to rest on its laurels, said Sujay Chohan, one of the authors of the Gartner report and vice president and research director of offshore business process outsourcing with Gartner in New Delhi.

<!--startclickprintexclude--><!--endclickprintexclude-->Unless India devises a long-term roadmap to improve infrastructure and consistently grow its skilled labor force, he said India will see some of its offshore BPO clients shift business elsewhere.

<!--startclickprintexclude--><!--endclickprintexclude-->"Although India's infrastructure is improving, it is not keeping pace with the rapid growth of the industry," the report said.

<!--startclickprintexclude--><!--endclickprintexclude-->The Gartner report pointed out that while no single nation yet poses a direct threat to India as a high-quality/low-cost location, over the past two years, more than 50 other countries have emerged that together could pose a viable challenge to India in the months ahead.

<!--startclickprintexclude--><!--endclickprintexclude-->Gartner estimates that India's current 85 percent ownership of the BPO market share could dwindle to about 45 percent by 2007.

<!--startclickprintexclude--><!--endclickprintexclude-->In dollar terms, that would be a significant blow to India, Chohan said. In 2004 India raked in more than $2 billion of an estimated $3 billion global offshore BPO market with more than 250,000 workers.

<!--startclickprintexclude--><!--endclickprintexclude-->He estimates that the worldwide offshore BPO market will grow to about $24 billion by 2007 of which India will earn about $13.8 billion.

<CENTER>Rising labor costs</CENTER><!--startclickprintexclude--><!--endclickprintexclude-->Given that India's been doubling its outsourcing operations every year for the past four years, Chohan said he's not too surprised by the current imbalance in the labor demand-supply equation as well as the onset of wage inflation and high levels of attrition.

<!--startclickprintexclude--><!--endclickprintexclude-->"Four years ago, a typical call center employee would have earned between 5,000 to 6,000 rupees ($114- $136) a month. Now it may be up to between 7,000 to 9,000 rupees ($159 - $204) a month," he said. "The rise in labor costs isn't significant yet. What's more important is that these increases so far have not been passed on to clients in the U.S."

<!--startclickprintexclude--><!--endclickprintexclude-->But if these costs continue to escalate, he predicts that Indian outsourcing firms will take a hit to their bottom line and eventually start to pass along the increases to their international clients.

<!--startclickprintexclude--><!--endclickprintexclude-->Chohan said India could learn from Ireland's mistakes more than a decade earlier.

<!--startclickprintexclude--><!--endclickprintexclude-->"This is exactly what happened in Ireland in the 1990s," said Chohan. "As a result, companies that were outsourcing to Ireland began to look elsewhere and discovered India for the lower-level work," adding that Ireland today still attracts what's considered to be "high-value" outsourcing such as R&D and software development.

<!--startclickprintexclude--><!--endclickprintexclude-->Chohan isn't worried about India losing it lead in IT outsourcing. "India dominates now and will continue to do so in the future because of the sheer scale of skills in the country at low costs. The only exception is China which has become very visible in this space within the last six months."

<CENTER>Moving beyond call centers</CENTER><!--startclickprintexclude--><!--endclickprintexclude-->Ashank Desai, chairman of Mumbai-based Mastek, said one way for Indian companies to maintain their competitive advantage and ensure their international clientele is to upgrade their services by offering more sophisticated back office functions in addition to the basic call center services.

<!--startclickprintexclude--><!--endclickprintexclude-->Mastek is a provider of offshore IT and BPO outsourcing services. The company logged annual sales of $130 million in 2004.

<!--startclickprintexclude--><!--endclickprintexclude-->"At Mastek we're already looking into merging BPO and IT services so that our clients get double the advantage,' Desai said.

<!--startclickprintexclude--><!--endclickprintexclude-->He gave an example, "We can reconfigure IT used for processing insurance claims to make it more efficient and then process these claims more efficiently for our customers."

<!--startclickprintexclude--><!--endclickprintexclude-->In order to emerge as truly global players and undercut the competition, Chohan said Indian outsourcing companies should also think about expanding their brand globally by setting up delivery centers outside of India.

<!--startclickprintexclude--><!--endclickprintexclude-->Indian vendors depend too much on the U.S. market. India has to make inroads into non-English speaking markets as well, "similar to what Ireland has done to successfully service the European market," he said.

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[WildBill]

Its simple, its called businesses will stop having to look at call centers as cost centers and buck up. Service is the name of the game today and people will pay more for better service. There are still tons of call centers in the US, the companies that know service people are the difference between keeping and losing a customer know this all too well. Besides even India has to admit at some point there is no reason to graduate tens of thousands of students at MBA-type levels just to have them go to a call center and brag about how good a job it is. That sort of honeymoon can only last so long. Same for China, at some point they stop feeling thankful they could find some way to employ people and start embarking on ways to move themselves up the food chain. Who wins? The educated no matter where they live. Who loses? The uneducated no matter where they live. Its why CR is doing better than the neighbors, but worse than the "first world".

 

[wolfie_cr]

"I just don't see CR supporting huge call centers wanting english-fluent staff paying wages less than the gaming industry is already paying"

that problem is happening right now, they want to pay less BUT they have people who know expects a payment of say........900 dollars and IN DOLLARS not in colones

Maerks, Sykes, P & G, Western Union and quite a few local companies being ITS the largest one off the top of my head, they all have medium (I supose medium because they are not small ones at all but probably smaller than the ones in India)

there is always a limited amount of people that speak a foreing language fluently enough and that makes the wages for those positions stay at the current level (or go slightly higher) as otherwise you simply wont get anyone willing to work in those positions when they can get better positions in a sportsbook

 

[AdamSelene]

The other thing is that gaming companies (etc) are in central american/caribbean for reasons other than cost savings. Then they compete with each other for quality of customer service and wagering taking.

That's not going to co-exist well with large companies just seeking to add $ to corporate dividends and slash costs.

My original point, however, was that it is so obvious there is no surplus of English skills in the workforce here. Even the percentage of employees working in tourism related business that speak fluent english is small. Was at a casino the other day and not a supervisor nor a floor manager could speak english. Not hard to walk into a bank and not even the bank manager can speak english, let alone any staff. Reservation clerks at hotels are not a given either.

That said, Costa Rica is cheaper than the U.S., with a huge benefit (offshore!) to certain businesses and not very many draw backs; and if you're going to compete with good wages and good work environment there are plenty of quality employees to be had to staff a small/medium sized call center.