LatAm Alliance Council Meeting - SIG€¦ · LATAM currencies • Weak footing of LATAM economies • Introduction of key tax reforms and taxation structures •Weak macro-economic

LatAm Alliance

Council Meeting

sig.org/summit

www.latamalliance.org

Working Council Meeting

March 16, 2017


Agenda4:45 PM Welcome & Introductions

- Working Council Leadership Team

- Quick Introductions

4:55 PM Introduce the LatAm Alliance – Our Goal

5:00 PM Objectives for 2017

- Survey Results

- How We Will Operate

5:10 PM Latin America- Managing Risk to Leverage Opportunities in the Global

Services Market by Neo Group

5:30 PM Q&A – Open Discussion

5:35 PM Meeting Concludes

3




- Quick introductions



- Survey Results






4


Introductions

Nigel Storey

J&J - COO

Rosana Leary

LatAm Alliance

Executive Director

• Working Council Leadership Team

Bruno Guicardi

CI&T - President

5

• Quick introduction from those in attendance




- Quick introductions

4:55 PM Introduce the LatAm Alliance - Our Goal


- Survey Results






6


LatAm Alliance – Our Goal• Started as Nearshore Executive Alliance, in 2012

• Passionate advocates of LatAm’s talent and creativity

• March 2016 joined SIG as a Working Council

• Buy-side driven

• Provider/advisor supported

• Our Goal:

• Bring together SIG and LatAm Alliance members that are interested in

learning, collaborating and sharing best practices in outsourcing IT or

business process services to and within Latin America

• Provide a professional networking and relationship-development

environment

• Involve key industry leaders, agencies and other entities that have a direct

interest in optimizing the business value that organizations can achieve

through effective and efficient outsourcing of IT services or business

processes.

7




- Quick Introductions



- Survey Results




5:30 PM Q&A– Open Discussion


8


Objectives for 2017–Survey Results

9


Objectives for 2017 –Survey Results

10

Level of interest for the following topics related to the outsourcing of business

processes or IT services to and within Latin America:


Decide on priorities - survey results

• Which speakers/thought leaders do we want to involve?

• Do we have any initiatives we would like to pursue?

• Other ideas, thoughts or suggestions?

How we will operate

• Townhall sessions or webinars – address topics of interest

• WebEx meetings – minimum quarterly

• April 2017, July 2017, Dec 2017, Feb 2018

• Meet at scheduled SIG Summits (formal and informal)

• March 2017, Oct 2017, April 2018

Objectives for 2017

11


Objectives for 2017 –Upcoming WebEx Meetings

12

Level of interest for the following topics related to the outsourcing of

business processes or IT services to and within Latin America:

April 5th

May 24th




- Quick introduction of Those in Attendance

4:55 PM Introduce the LatAm Alliance– Our Goal


- Survey Results






13


Sandeep Suresh - Head of Research, Neo Group

14

Sandeep Suresh heads the research and supplier

relations division in Neo Group. He has over 10 years’

experience working in the market research industry and has

worked not only with several domestic and international

market research companies but has also with leading

ITO/BPO/KPO organizations, managing their global research

operations. Over the years, he has managed several

customized research projects on the outsourcing industry

and has gained considerable research expertise and

knowledge in that space.

Managing Risk to Leverage Opportunities in the Global Services Market

March 2017

SOURCING IN LATIN AMERICA

SANDEEP SURESH, NEO GROUPSIG GLOBAL SUMMIT 2017

FLORIDA

SINGULAR FOCUS ON GLOBAL SOURCING LEVERS

SINCE 1999

BY APPLYING

Neo Intellectual Property

Real-TimeAnalytics

Neo ProvenMethodologies

Neo’s ExperiencedAdvisors

Co-Creation w.Clients

© 1999-2017 Neo Group Inc. Proprietary

GLOBAL

TALENT

AUTOMATION ANALYTICS

PROCESS

OPTIMIZATION

WE HELP ACHIEVE RAPID OUTCOMES

BY ADVISING ON LEVERAGING SOURCING LEVERS

NEO GROUPBEYOND ADVICE TO OUTCOMES

Advice with singular focus on global sourcing levers since 1999Automation | Analytics | Global Talent | Process Optimization

2

© 1999-2017Neo Group Inc. Proprietary

KEY TOPICS COVERED

17

• LATAM Landscape

• Identifying Risk and Opportunities

• Perspective of Future Trends

LATAM LANDSCAPE- OVERVIEW

© 1999-2017 Neo Group Inc. Proprietary 18

Mexico • Cost arbitrage in terms of salaries and operating

costs• High threat from natural disasters such as

earthquakes and floods• Large labor pool and competitive labor costs

Peru• Strong economic growth (>6% annually in 2006-13)

• Strong back-office BPO services• Low English proficiency

Costa Rica• Software development among key services offered• Offshore firms benefit from incentives offered by

FTZs• Relatively small IT-BPM industry size

Colombia• BPO sector is one of the priority sectors for the

government

• Upcoming outsourcing hubs such as Cali and

Barranquilla

• Limitation in terms of bilingual or multilingual

talent

Brazil• Excels in IT processes

• Trade agreements with various

countries

• High wage inflation

Argentina• Key sourcing market in the LatAm region,

favored for nearshore advantage• Potential to excel in web development,

digital content, e learning and video gaming

• Limitations in terms of talent pool, especially IT/STEM skills

Source: Neo Group & Supply Wisdom

LATAM LANDSCAPE– POPULAR PLAYERS


KEY RISKS AND OPPORTUNITIES (1/4)


Macro-Economic Indicators: A Weakening Economy

• Continuous depreciation of major LATAM currencies

• Weak footing of LATAM economies• Introduction of key tax reforms and

taxation structures

• Weak macro-economic climate impacting operating costs (interest rates/inflation etc.)

• Trade agreements with various countries • Increased growth of SMEs in IT sector

Cost: Depreciating Currency Provides Cost Arbitrage

• High training costs due to lack of skilled labor force

• Power tariffs on the rise • Salary increment in terms of USD is in

negative %• Cost arbitrage when compared to United

States• Small cities provide cost advantage

• Cost arbitrage in terms of salaries and operating costs

• Advantages of tier two cities



Geo-Political: Vulnerability to Natural Disasters Lesser than Expected

• Efforts to stabilize political turbulence • Health hazards (Zika, Dengue, etc..)

prevail• Crime rates/natural disasters

• High crime rates create negative investor sentiment

• Disruptions due to natural disasters is less frequent than established hubs

• Social unrest present; doesn’t cause disruptions

Infrastructure: Incentives to Promote IT Sector

• Frequent power/telecommunication outage

• Poor road connectivity in smaller towns• Frequent power cuts• Establishment of Smart Cities• Improved internet connectivity in many

LATAM countries• Incentives for training programs• 90+ Free Trade Zones

• Upcoming outsourcing hubs• Government support to improve IT

environment



Business: Improvement in Doing Business Despite High Bureaucracy

• Average Doing Business Rank for 2017 is 106 (Doing Business Report)

• Supportive tax policies to boost the business environment

• Steady progress towards favorable commercial climate

• Cumbersome bureaucratic process and delays due to red tape

• Delayed approvals for startups

• Corporate tax reductions and exemptions

Legal: Emerging Cyber Security Measures to Bring in Positive Changes

• IP/data protection regulations are not comprehensive

• Lack of political will to control fraud/corruption/cybercrimes

• Emergence of cloud-enabled cybersecurity • New regulations regarding storage,

processing and transfer of data• New anti-corruption laws• Cyber emergency response group to

defend against threats



Scalability: Increasing International Footprint Despite Troubles from U.S

• Trainable manpower at competitive cost• Nascent BPO/ITO sector compared to

Asia; exhibiting significant growth in recent years

• Uneven industry penetration• High attrition rates• Anti-outsourcing l aw in United States

• Increasing presence of international firms• Increased number of technical graduates

every year

Quality of Life: Cultural Similarities are a Big Advantage

• Pollution, inadequate health and safety infrastructure, unplanned rapid urbanization

• Cultural and geographical proximity to USA facilitates business operations and smoother expat life

• Temperature spike, pollution and porous urban infrastructure remain challenging

• Cultural compatibility• Near zone advantage

LATAM SOURCING: TOP FUTURE TRENDS


Source: Neo Group & Supply Wisdom

Futuristic Behavior

Improvement in English

Proficiency

Global In-house

Center/ Shared Service Center

New Age Technologies

Innovation in Customer

Experience Management

Increased need for

Compliance

Redefine Scalability

© 1999-2017Neo Group Inc. Proprietary

CONCLUSION

25

Selecting the right LATAM location requires:

DEMAND

• Understand your scale and skill requirement (now and

in the future)

• What risks really matter to you (risk tolerance)

• Own or contract (capabilities and readiness

requirements are uniquely different)

SUPPLY

• Understand the unique opportunities and challenges

in each country

• Understand comparative value

• Understand total ROI

USA 129 Newbury St., Suite 400

Boston, MA 02116, USA

www.neogroup.com

AMSTERDAM, NETHERLANDS

BANGALORE, INDIA

BOGOTA, COLOMBIA

GUADALAJARA, MEXICO

LONDON, UK

NEW YORK, USA

SAO PAULO, BRAZIL

SILICON VALLEY, USA

SYDNEY, AUSTRALIA

SANDEEP SURESH

Head- Research

[email protected]

www.NeoGroup.com

www.SupplyWisdom.com

[email protected]

© 1999-2017 Neo Group Inc. Proprietary

THANK YOU!

mailto:[email protected]

http://www.neogroup.com/

http://www.supplywisdom.com/



- SIG Executive Introduces the Working Council Leadership Team

- Quick Introduction of Those in Attendance

4:55 PM Introduce the LatAm Alliance– Our Goal


- Survey Results






27


Q & A

Next meeting–April 5th

Webinar

28


Thank You!

29

APPENDIX

© 2016 Neo Group Inc. Proprietary

DATA AND ANALYTICS: SUPPLY WISDOM


REAL-TIME

GLOBAL

CONTINUOUS

PROVEN

• LEVERAGES PROVEN RISK FRAMEWORK developed by globally recognized experts on proven methodologies and co-created with our clients

• AGGREGATES DATA & APPLIES ANALYTICS in real-time to over 300+ risk elements to assess and alert changes in risks

• ADDS GUIDANCE to deliver key insights as well as trend analysis of risk across suppliers and locations

• CONTINUOUS & REAL-TIME MONITORING enables

faster action with an operations perspective

• CLOUD-BASED DELIVERY eases and automates the process for risk monitoring

CLIENT CO-CREATED PROPRIETARY RISK FRAMEWORK*MOST COMPREHENSIVE IN THE INDUSTRY SINCE 2014

SUPPLIERRISKS

FINANCIAL CLIENTS PEOPLEALLIANCES &

PARTNERSHIPS

SERVICECAPABILITY

GOVERNANCE INFRASTRUCTURE THOUGHT

LEADERSHIP

CITYRISKS

MACRO-ECONOMIC FINANCIAL BUSINESS INFRASTRUCTURE

GEO-POLITICAL LEGAL SCALABILITY QUALITY OF LIFE

COUNTRYRISKS

MACRO-ECONOMIC FINANCIAL BUSINESS INFRASTRUCTURE

GEO-POLITICAL LEGAL SCALABILITY QUALITY OF LIFE

* Patent Pending

Risk Categories

COMPLIANCE &

REGULATORY

SUPPLY WISDOM RISK FRAMEWORK SAMPLE SUPPLIER RISK

METRICS

FINANCIAL

• Key investment, ratios balance sheet,

liquidity, profitability and

revenue/revenue diversity metrics

CLIENTS

• Acquisition, retention/flight,

concentration and satisfaction

PEOPLE

• Attrition (overall attrition for the

quarter), new hires, productivity,

utilization and employee development

& training measures

COMPLIANCE and REGULATORY

• Notices, actions and incidents

SERVICE CAPABILITY

• Key talent pool size, quality

certifications, specialized certifications,

operating model, service and vertical

lines and geographical metrics

10 - Point Standard Risk Rating Scale

Moderate Extreme HighLow

4.0 8.0 100 6.0

32

sig.org/summit

Rosana Leary

Executive Director

LatAm Alliance, a SIG Working Council

Cell: 917.376.1075

Skype: rosana.leary


[email protected]

Contact Info

Documents

LatAm Alliance Council Meeting - SIG€¦ · LATAM currencies • Weak footing of LATAM economies • Introduction of key tax reforms and taxation structures •Weak macro-economic