Nearshore Call Center Outsourcing

1
Nearshore Call Center Outsourcing

• Anupam Govil
• CEO, Global Equations LLC
• New York, Oct 18th 2006

2
(No Transcript)
3
Global Shoring Ecosystem

• Offshore
• Lower costs
• Time to market
• Resources
• Quality
• Scale

4
Choosing Delivery Options
Indirect
5
Benefits of Nearshoring

• Cost Reduction
• Higher cost than offshoring, but cheaper than
  U.S. labor
• Favourable exchange rates
• Multi-lingual capabilities
• Enhanced Productivity, Efficiencies and QOS
• Time zone/geographic proximity
• More efficient communication
• Greater control and flexibility
• Closer cultural affinity
• Qualifications, degrees and certifications of
  identical standards
• Domain expertise like Financial services,
  Insurance etc

6
Benefits of Nearshoring

• Risk Mitigation
• Lower geo-political risk
• Compatible legal structure, patent and IP laws
• Access to insurance not available when moving
  work offshore
• Security, Data sensitivity, Regulatory issues
• Strategic Value
• World class services built around similar
  processes and methodologies
• Opportunity to build asset value over long term
• Reduce time to market and accelerate
  product/service rollout
• Handle premium customer service at lower cost
  without fears of offshore backlash
• Diversification of global sourcing portfolio
• Golf !!!

7
(No Transcript)
8
Global Annual Wages Benefits
India - 7,779 China - 7,634 Philippines -
9,844 Romania - 12,691 Mexico - 17,899 Costa
Rica 17,420 Brazil - 13,163
Source NEO IT
9
Balancing Nearshore vs Offshore
10
Key Risks in Nearshore Model

• Comparatively lower advantages of cost reduction
• Inability to scale saturation of labor pool
• Cost inflation due to relative high impact
• Maturity of service providers
• Trade-off between cost and sophistication
• of the services.
• Depth of domain specific skills
• Identifying and demarcating nearshore locations
• High investments may hike labor and property rates

11
(No Transcript)
12
The Caribbean the Best Near Shore Solution

• Near-shore is defined by proximity to
  geographical market being served, and an optimum
  time zone.
• A synchronization, or limited stagger to the
  customer market is critical. The Caribbean is
  AST, GMT -5/-4 and EST/EST1 depending on the
  Season. This time zone is ideal for an offset of
  prime-time UK and US contact, which optimizes
  utilization of the physical plant.
• Language/Accent
• Increased response rates and first call
  resolution in the US and UK with the door
  opener of the very pleasant, Caribbean, English
  accent.
• Work Force
• Fully Loaded Labor Cost is about 1/3 the US UK
  rates
• Management level workforce available at 1/2 or
  less than competitive US UK rates
• Cultural linkage to UK and US
• Educated labor force looking for alternative
  career opportunities
• Pro-business environment with key government
  agency support
• Ease of travel with direct flights
• Favored by clients who want to visit multiple
  sites in one day and provide local management
  support

13
The Caribbean Continuing Call Center Growth

• The Caribbean is home to a population of 11
  million (not including Cuba)
• There are currently approximately 85 call
  centers, compared with 45 in 2002.
• Agents have grown from 11,000 in 2002 to 25,000
  in 2004 and expected to grown to 50,000 in 2006
  (Zagada)
• Over 80 percent of this growth comes from contact
  centers fulfilling projects for Fortune 1000 and
  large U.S corporations
• Locations include Barbados, Antigua, Jamaica,
  Dominican Republic, Trinidad, Panama. St. Lucia
  and Puerto Rico.
• U.S corporate buyers are increasingly finding
  sustained value by including Caribbean nearshore
  contact center operators as part of their global
  sourcing selection mix inclusive of Asia, Europe,
  Canada, and Latin America (Zagada)

14
(No Transcript)
15

• Thank You
• Anupam Govil
• T 512.310.8544
• E agovil_at_globalequations.com
• www.globalequations.com

16

• Extra slides

17
The Value Chain
18
What the Analysts are saying

• Flights to Caribbean cities require 2 to 4 hours,
  versus 18 to 20 hours for a trans-continental
  flight to an offshore destination. These
  nearshore destinations provide clients the
  comfort of proximity.
• - Source Brendan B. Read , Call Center
  Magazine
• U.S corporate buyers are increasingly finding
  sustained value by including Caribbean nearshore
  contact center operators as part of their global
  sourcing selection mix inclusive of Asia, Europe,
  Canada, and Latin America.
• - Source Zagada Institutes Caribbean Call
  Center Report 2005
• Recent studies suggest that as organizations
  become more experienced outsourcing key IT and
  business process functions, the importance placed
  on direct cost savings diminishes while other
  factors such as security, quality, service and
  the existence of solid trusted networks rises.
  In fact, experts observe that U.S. companies are
  more likely to opt for nearshoring when the cost
  benefit is at or above 65 of the cost of a U.S.
  project.