Latin America Making Gains in Global BPO Sector

Spend Matters welcomes this guest article by Elizabeth Figueroa of GEP.

Business process outsourcing (BPO) is playing an increasingly important role on global and local corporation processes, practices and outcomes. Based on market needs, Latin America (LATAM) is improving and strengthening its capabilities to become a more attractive region for foreign investment. Showing accelerated and continued growth, and through significant investment by corporations, LATAM is the third most desirable destination for outsourcing after India and China.

Global companies are becoming more attracted to outsourcing, to have best-in-class process expertise on diverse services, and are not just being driven by cost reduction. They are finding real, tangible and added value benefits that will end in significant revenue growth.

One key to success on a BPO implementation is prioritizing and selecting the right categories focusing on the company goal, e.g. quality improvement, customer satisfaction, cost reduction, etc., in order to have real and desirable impact.

LATAM represents the 5% of the global spend of BPO sector, according to Gartner. The countries leading the BPO market in the region are: Costa Rica, Brazil, Argentina, Uruguay, Mexico and Colombia. The success has been its near-shore advantage, bilingual capabilities, its proximity to the US, telecommunications infrastructure, labor cost and tax incentives. All these characteristics will play an important role focused on contributing to growing the sector revenue to $50 billion by 2020.

According to Everest Group latest studies, around $700 million are invested annually on BPO services in LATAM by multinational corporations (MNC), and less than half by local organizations, lead by manufacturing and CPG industries. This trend is not followed by the energy and utilities industry, where 67% of the annualize contract value BPO services contracted are LATAM companies.

Even though Latin America does not represents a considerable percentage of the global BPO market spend, it has a faster compound annual growth rate than the global market, making it an attractive spot for new companies and new contracts for existent BPO clients.

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