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Passion for outsourcing

Colombia:

OutsOurcing
By Atul Vashistha
olombia is Passion” is the brand slogan the Colombian government agency at the helm of pro-export chose to promote the nation. What one soon discovers in this charming country of beautiful people is a passion for business, music and family togetherness. One also soon realises that a passion foroutsourcing already exists here too! Colombia is a rising star in Latin

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America. Once perceived to be unsafe, the country has over the last decade, transformed itself as one of the best locations to do business in Latin America. The World Bank in 2010, ranked the nation higher than countries such as Peru, Panama, Brazil, Chile and Mexico. Citi, Henkel, Wyatt, Abbott and HP have captivecentres here that serve as regional centres. International firms such as Telefonica, Telmex, Avianca, Greyhound and Tracfone leverage outsourcers such as Telemark, Teleperformance, Assenda, Avanza, Unisys, ACS and IQ Outsourcing. Domestic firms such as Carvajal, Bancolombia, Suramericana, Banco Agrario and even the Colombian government are not much behind in leveraging outsourcing. Interestingly,Bancolombia leverages not just local suppliers like Assenda but

also leverages global suppliers such as ACS, TCS and Infosys. What makes Colombia such a passionate adopter and attractive destination for outsourcing? A country with a population of 46 million with outsourcing friendly labour pools in multiple cities such as Bogota, Medellin, Cali, Baranquilla and even Periera, presents multipleoptions for buyers and suppliers. Thirty cities have a population of 100,000 or more. Bogota produces 67,000 graduates every year, of which, 17,000 are technical graduates. At present, the combined workforce of IT and BPO industry in Bogota exceeds 50,000. Labour costs in Colombia are very attractive with Bogota being one of the least expensive cities in the region. Labour cost for bi-lingual whilehigher than

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Spanish speaking employees, is 15-25% lower than comparable employees in Monterrey or Buenos Aires. Real estate costs are lower too than Mexico City and Sao Paulo. Government led, privately managed initiatives, such as the Free Trade Zone in Bogota, Zona Franca Bogota, enable firms to not pay VAT on imports and also reduces income taxes to 15% from over30%. The friendly government support even allows for domestic sales and ability to classify specific new operations as free standing free trade zones. Legal stability contract legislation provides a stable 20-year business framework to protect foreign investment. Government agencies like ProExport and SENA provide complimentary

support, while promotion and business groups such as ANDI, ZonaFranca Bogota, Invest in Bogota and ProBarranquilla make it easy for firms to get started and leverage Colombia and its cities for ITO and BPO. Infrastructure in Colombia is deemed world class. The telecommunications infrastructure ranks 4th among 46 Latin American cities in terms of broadband penetration. Air connectivity is excellent with direct flights from the US, Europe and most key LatinAmerican cities. The fact that Colombia is in the same time zone as Central Time surely helps too. Office space is easily available and rental rates are very attractive. Land is easily available too. Political and economic stability is at a premium in South America and Colombia has led the way in the past decade with its pro-business and stable government of President Alvaro Uribe and now PresidentJuan Manuel Santos. Colombia’s average annual economic growth rate of over 5% from 2002 to 2007 can be attributed to an increase in domestic security – resulting in greater foreign investment, prudent monetary policy and export growth. In 2004, the Uribe government established, for the first time in recent Colombian history, a government presence in all of the country’s 1,099 municipalities (county...