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© 2014 Avasant LLC. All Rights Reserved. Proprietary and Confidential. No part of this document may be reproduced in any form or by any electronic or mechanical means, including information storage and retrieval devices or systems, without prior written permission from Avasant LLC. Feb 12, 2014 Anupam Govil Latin America and Caribbean Opportunities for Growth

NASSCOM ILF 2014: Latin America and Caribbean Opportunities for Growth: Anupam Govil, Avasant

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Page 1: NASSCOM ILF 2014: Latin America and Caribbean Opportunities for Growth: Anupam Govil, Avasant

© 2014 Avasant LLC. All Rights Reserved. Proprietary and Confidential. No part of this document may be reproduced in any form or by any electronic or mechanical means , including information storage and retrieval devices or systems, without prior written permission from Avasant LLC. Feb 12, 2014

Anupam Govil

Latin America and Caribbean Opportunities for Growth

Page 2: NASSCOM ILF 2014: Latin America and Caribbean Opportunities for Growth: Anupam Govil, Avasant

© 2014 Avasant LLC. All Rights Reserved 2

Latin America & CaribbeanThe Big Picture

9%

% World GDP (PPP) % World Population

9%

* Pop > 1Million

World Bank Doing Business Rankings ’13- Top 10 in Latin America-Caribbean

40 4342 6655 79 94 102 10953 88

Literacy Rate (Average)

> 85%

LatAm Domestic IT-BPO Market

USD 44Bn

The Latin American-Caribbean (LAC) is fast developing into an attractive market in itself growingbeyond just being a nearshore delivery location.

Page 3: NASSCOM ILF 2014: Latin America and Caribbean Opportunities for Growth: Anupam Govil, Avasant

© 2014 Avasant LLC. All Rights Reserved 3

Latin American Outsourcing LandscapeGetting Bigger & Better

LATIN AMERICAN OUTSOURCING

˃ Largest agglomeration of outsourcing ready nations

˃ The ‘Offshore’ IT+BPO market is estimated to touch US$ 9.2bn by ‘14 (CAGR 12%)*

˃ Lead by Brazil, Chile and Mexico (IT+BPO)

˃ Significant presence in IT/CC (multi-lingual) space -Guatemala, Costa Rica, Colombia

˃ Strong macro economic performance esp. by established locations

˃ Proactive government support through incentives, tax breaks, SEZ’s etc.

˃ Improving/positive investment climate

˃ Ability to provide services across the value chain in IT/BPO/CC

˃ Multi lingual capability

˃ Shrinking difference in costs vs. offshore locations

Latin America is the fastest growing outsourcing agglomeration benefiting from its proximity tothe US, rise in bi-lingual service demand and fast growing domestic markets.

*Source-PwC

Country AT Kearney GSLI Rankings

‘11 (+/-‘09)

Gartner/ KPMGAnalysis

Argentina 30 (-5) Established

Brazil 12 (+5) Established

Chile 10 (-2) Established

Colombia 43 (-) Emerging Strong

Costa Rica 19 (+3) Established

Ecuador -- High Potential

Guatemala -- Emerging Strong

México 6 (+5) Established

Nicaragua -- High Potential

Panamá 34 (+9) Emerging Strong

Puerto Rico -- High Potential

Uruguay 41 (22) Established

El Salvador -- High Potential

Perú -- High Potential

Page 4: NASSCOM ILF 2014: Latin America and Caribbean Opportunities for Growth: Anupam Govil, Avasant

© 2014 Avasant LLC. All Rights Reserved 4

˃ Largest agglomeration of ‘Nearshore’ English speaking talent pool

˃ The Caribbean and Central America ‘Nearshore’ BPO market is estimated at US$ 3bn

˃ Suited for voice based CC , transaction processing services as well as high value F&A services

˃ Lead by Jamaica and Dominican Republic in the CC space . Belize and Puerto Rico registering consistent growth in the CC/BPO sector

˃ Locations like Trinidad better positioned to provide higher value , vertical specific BPO services

˃ Strong services sector background owing to the tourism industry

˃ High unemployment rate ensuring adequate talent availability

˃ Varying levels of government support through incentives, tax breaks, SEZ’s etc.

˃ About 80% of the CC operations in the Caribbean are funded by US companies

Caribbean is a small but increasingly significant part of the Nearshore market. The region is fastemerging as a credible location not only for voice based CC segment but also for higher valueBPO services. For service providers, Caribbean also provides access to a large untappeddomestic market.

Country AvasantAnalysis

( ITeS Destination)

Focus Area

Jamaica Emerging Strong English CC

Dominican Republic

Emerging Strong Multilingual CC

Puerto Rico Moderate Potential Multilingual CC

Trinidad High Potential F&A BPO

Barbados Moderate Potential English CC

Belize Moderate Potential English CC

Caribbean Outsourcing LandscapeUntapped Potential

Page 5: NASSCOM ILF 2014: Latin America and Caribbean Opportunities for Growth: Anupam Govil, Avasant

© 2014 Avasant LLC. All Rights Reserved 5

Latin America & Caribbean MarketA Game Changer for Indian Service Providers?

Global Delivery Center in Jamaica- Kingston

Global Delivery Center in Cost Rica-Alajuela

New Delivery Center in Brazil-São Paulo

Initiates BPO Operations in Puerto Rico-Aguadilla

F&A BPO from Trinidad and Tobago-Port of Spain

New Delivery Center in Costa Rica-San Jose

Over 25 Indian IT/BPO companies operate in 16 of the 22 key LAC countriesemploying over 29,000 local staff.

*Includes Jamaica, Trinidad and Tobago from the Caribbean

Indian Service Provider Activity - 2013

Indian service providers are ramping up nearshore presence through strategic acquisitions as well as setting up greenfield operations.

Shared Service Center in Colombia-Bogota

Page 6: NASSCOM ILF 2014: Latin America and Caribbean Opportunities for Growth: Anupam Govil, Avasant

© 2014 Avasant LLC. All Rights Reserved 6

India-LAC CooperationOpportunities Galore

Macro Level Factors Driving India-LAC Cooperation- Leveraging Close Trade Ties - Over USD 46.67 billion in total trade in ‘12-‘13 with

Indian exports grossing over USD 15.7 billion. This is expected to touch USD 25 billionby ‘15 through effective cooperation. IT-BPO expected to form a significant part

- Geo-Political Interests - Common interest of both regions in terms of business andstrategic reasons

- Cultural Ties - Deep cultural ties esp. with Caribbean countries make collaborationeasier

Industry Level Factors Driving India-LAC Cooperation- Nearshore Advantage - Easy access, similar time zones and greater cultural affinity

provides a good balance to offshore locations- Growing Domestic Market - LatAm companies bring in the local market knowledge

while Indian service providers bring industry/process experience- Easier Access to Prime Markets – Many LAC locations offer an easier access to key

North American markets through trade agreements (NAFTA) easing sensitiveoffshoring/visa restriction issues

- Unique Skill sets – Multi-lingual talent, Creative and Web services, Mobile and Agiledevelopment

Page 7: NASSCOM ILF 2014: Latin America and Caribbean Opportunities for Growth: Anupam Govil, Avasant

Partner, Avasant- President, AvasenseAnupam Govil

[email protected]