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
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
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.
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