Is Bogota at a Global Sourcing Inflection Point?

Over the last 24 months Latin America experienced strong interest with a number of global companies setting up service delivery centers in the region. Bogota, in particular, experienced significant interest in recent times. In the first quarter of 2010, two major companies – Convergys and Teleperformance – expanded operations into Bogota. This development is likely to provide a boost to Bogota’s and Colombia’s position in the global sourcing space.

In this research brief, we review the capabilities that Bogota offers and explore how it may evolve as an offshore destination, especially in view of recent developments.

Key takeaways:

Low costs and a large talent pool make Bogota very competitive relative to other Latin American cities. Improving English language skills adds to the potential to support scalable operations for the U.S. market.

Historical concerns regarding stability and security are ebbing. The entry of Convergys and Teleperformance is likely to further accelerate acceptance among U.S. companies.

Over the next three to five years, improvements in English language skills, continued low-cost environment, and greater acceptance among U.S. companies are likely to accelerate Bogota’s position among destinations in Latin America.

Exhibit: Cost-risk comparision of selected cities in Latin America for contact center services

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Industry news

• Teleperformance recently opened its facility at Quezon City, Philippines to provide customer service and advanced help desk services through inbound voice calls, e-mail, and Web chat. It is the company’s seventh facility in the Philippines and employs about 1,200 employees. In addition, Teleperformance has opened another center in San Jose, Colombia with 400 workstations to serve its clients in Latin America and the U.S.
• MphasiS established a new 600-FTE delivery center in Pune, India. The center will provide remote IT infrastructure management services to clients in India, United States, Europe, and Asia-Pacific (including Japan)
• IBM has recently set up its new delivery center in Cebu for IT-ADM and non-English language translation services. The company also established software innovation labs in the cities of Beijing and Xi’an in China
• Sykes has set up a new contact center in Egypt to serve clients in Europe, Middle East, Africa, and the U.S. in six languages. The company plans to increase headcount in the center to 1,000 over a period of three years
• Huawei expanded its operations in Turkey by setting up a new R&D center. It plans to hire 350 engineers for the R&D center and an additional 150 for the technical support center over a period of three years
• In addition to their offshore presence, leading Indian suppliers are beginning to increase their footprint in U.S. cities. In Q1 2010, Infosys BPO, TCS, and Patni have set up or expanded their delivery centers in the U.S.

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