Over the last year, MVD Consulting along with its partner Tholons Inc have done a survey on 30% of the Shared Service Centers (SSCs) in Colombia with the goal of understanding the life cycle of these centers, why they have chosen Colombia to settle, what are the main motivations in that country, what type of services they offer and to which markets.
This study was sponsored by Colombia´s investment promotion agency ProColombia, Bogotá´s promotion agency InvestinBogotá and ACDECC (Colombian Association of Contact Centers and BPO).
The BPO industry in Colombia, led by Contact Centers, is a U$ 2.5 billion industry, of which U$ 500 million per year is exported.
These SSCs are mainly owned by companies of less than U$ 500 million in annual revenue. 27% of these centers deliver one line of services, whereas only 18% deliver more than 3 line of services. The number of line of services delivered is an indicator of the maturity level of the SSCs and somehow shows the future importance of them in the value chain of the parent company.
The majority of these SSCs are focused on Hispanic markets and cover verticals such as Manufacture, Retail & Distribution, Financial Services and Public Services. We expect to see more services delivered to USA as long as the teaching plans in English language show their results on the local talent. Nevertheless, the local and Hispanic markets in general are a great opportunity for the companies in the region.
Among the surveyed SSCs, 40% have a headcount between 500-1000 people, 80% of which have less than 50% of their talent with English skills. Colombia has implemented several teaching programs both at national and local levels in order to improve the number of bilinguals. We expect the impact of these programs to be seen shortly, in order for the SSCs to be able to improve their portfolio of clients and include English speaking clients.
Most of the companies have chosen Colombia for their operations due to the availability of qualified talent, reasonable costs, good business environment and access to regional markets.
Interestingly, Colombia is also growing new cities as locations of SSCs. Our firm, along with Tholons, include four Colombian cities within the Top 100 ranking worldwide: Bogotá, Medellín, Cali and Bucaramanga. The possibility of having operations in more than one city adds value in terms of business continuity and diminishing operational risks.
Regarding risks, most of the surveyed companies don´t see major factors; even formerly important factors as crime rates or violence have greatly diminished. Natural events are a source of concern and these companies have processes and business continuity plans in order to minimize the impact.
Finally, an improvement is seen in the relationship between universities and companies, the consolidation of a chamber for the sector and more policies from the government. All these areas are being issued with professionalism, which makes us believe that Colombia will grow in the number of SSCs in the short term.
Regarding business environment, advice for setting up, implementation, transitions and management of service centers, there are some local consultancy firms which, as our own, have the expertise for recruiting and initiation of operations as well as coaching and consultancy for management in order to optimize operational and governance models.