Costa Rica Call Center Blog

IBM will expand the services it provides from Costa Rica by starting the a consulting practice and management of databases to improve the effectiveness of marketing and sales services they provide to their customers.

Rodrigo Cal, from IBM said that Costa Rica was selected to provide these new services because of education and skill of the staff hired to speak different languages.  He also stressed political stability and geographic proximity and time with the U.S.

Irving Soto, from CINDE, said the decision of the company shows the evolution of the service sector, which is evolving to higher value added services.

The expansion will generate 1,200 new jobs over the next two years from the current headcount of 800 employees.

IBM came to Costa Rica in 2004 to provide human resources for 325,000 employees of its customers in 13 countries in Spanish, Portuguese, English and French.

The number of companies providing services rose from one in 1995 to 81 in 2008. This year CINDE expects at least 10 new companies will join the industry.  Currently 24,000 people work in services.

Source: La Nacion

• Report highlights quality of staff, English and proximity to the U.S.
• San Jose gained seven seats in 2008 compared with Rio de Janeiro and Budapest

San Jose is among the top cities to provide Outsourcing Services.   San Jose climbed seven places this year compared to 2008 and was ranked 20th among the top 50 cities, ahead of Rio de Janeiro, Brazil (21), Budapest, Hungary (22) and Toronto, Canada (23), according to a report by Global Services Media.

Global Services Media, which released the study last week, has published the study for the last 3 years for research focusing on outsourcing and technology markets.

The report states that the Costa Rican capital is attractive because of the availability of trained staff with good English skills as well as other languages, its time zone and geographical proximity to the U.S. in addition to attractive package of incentives.

The report also mentioned the success of Hewlett Packard (HP) and IBM, Sykes among others, which led them to continuously expand their businesses in the country.  HP, for example, recently opened a research and development to designed the software to their wireless networks and chips for connecting network devices.

The multinational companies in the service sector provide for almost 24,000 jobs among 81 companies.

Arturo Barboza, from Sykes said the company’s growth has been driven by the quality of its employees. Sykes grew from a staff of 150 people in 1999 to 2,800 this year. “We got to make our way here when services were just beginning. Ten years later we believe that the country still has conditions for further growth”, acknowledged Barboza.  However, he recommended the next government to strengthen the teaching of English in public schools to ensure the necessary workforce for the future.

Vanessa Gibson, Post-Care director at CINDE, said the study by Global Services Media is important for attracting investment into the country. “The document emphasize on the image and credibility of Costa Rica” she said.  San Jose was among the winner emerging cities in 2009, “despite the crisis, outsourcing showed signs of continued evolution and maturity” the report said.

Gibson said the financial crisis created opportunities for the country as “U.S. companies turned to outsourcing to save costs”.

Source: La Nacion

Twenty-five percent of today’s top business-process outsourcers (BPO) will not exist in the next three years according to a research note released yesterday by Gartner.

Gartner reported that economic pressures, poorly conceived contracts and the inability to adapt to standardized delivery models are all having a big impact. “Some will be acquired and some will exit the market completely to be replaced by dynamic new partners delivering BPO as automated, utility services,” said Gartner research VP Robert Brown.

Outsourcing is a controversial trend that is hotbed of discussion that saved IT companies’ money and created a loss of jobs for U.S. workers–is going through some critical times and putting enterprises at risk.

CIOs can mitigate the risk of being entangled with an inadequate BPO partner, Gartner said, by checking for signs of trouble.

Cancellation rates among Gartner’s annual BPO buyer survey in 2008 rose sharply from the 2007 data. Therefore, Gartner advises buyers to build exit strategies into contracts and develop contingencies for contract termination, especially before signing the deal. BPO switching costs can be steep, so it’s important to understand contractual issue escalation procedures to ensure that all rational options are exhausted before initiating legal and/or termination discussions.

Source: WTN

San Jose. Hewlett Packard opened today in its first R&D for Latin America.  At the center, 150 Costa Rican engineers will develop software that will enable HP to generate wireless networking solutions for customers worldwide.

Globally HP has six of these centers, but that of Costa Rica will focus exclusively on the design of wireless technology.  The other five centers are in California,  Singapore, Bangalore, Taiwan and Canada.

Felipe Ortega, center manager of HP’s R&D in the country this morning said that the Costa Rican human talent is what motivated this new investment of the multinational. The company entered Costa Rica six years ago and currently has 7,000 employees in the zone Ultra Park and the American zone.

Source:  La Nacion

• Sykes to pay $15.38 per ICT share
• Price at 46 pct premium to ICT’s Monday close
• Says buy will help increase scale and expand reach
• Sykes expects to exceed top end of Q3 earnings outlook

Oct 6 (Reuters) – Business process outsourcing company Sykes Enterprises Inc (SYKE.O) said it plans to acquire ICT Group Inc (ICTG.O), a provider of customer management and BPO services, for about $263 million in a cash-and-stock deal, to increase scale and expand its global reach.

As per the deal Sykes will pay $15.38 for each ICT share, Sykes said in a statement.

The price represents a premium of 46 percent to ICT’s closing price Monday on Nasdaq.

The move comes amid a wave of consolidation in the IT services sector. In September, Xerox Corp (XRX.N) said it will buy Affiliated Computer Services Inc (ACS.N) in a deal valued at about $5.5 billion and Dell Inc (DELL.O) said it plans to buy Perot Systems Corp (PER.N) for about $3.9 billion.

The Sykes-ICT transaction is expected to close around the end of 2009.

Sykes expects to realize synergies of up to $20 million annually. The combined company is expected to generate revenue of $1.2 billion.

Excluding costs associated with the ICT deal and on a stand-alone basis, Sykes expects to exceed the top end of its third-quarter earnings outlook of 31 cents to 34 cents a share.

Sykes shares closed at $20.15 Monday on Nasdaq.

Source: Reuters

• The company employs 2,800 in the centers it operates in Moravia and Heredia
• The company will create 500 additional jobs
• The call center will open the third facility Sykes has in the country

This plan will be realized between 2010 and 2011, told this means Charles Sykes, chairman of the company of U.S. origin.

The multinational service has two call centers here, one in the Global zone in Heredia, which opened in 2003, and one in Moravia, opened a year ago.

Sykes has a presence in the country since 1999 acquired the operation of Acer Information Services, and became the first call center here.

Expansion. The plan of opening a third call center will lead to the recruitment of at least 500 people. Currently, 2,800 employees are working company.

“The 500 new positions are typical for launching an operation. If competition from companies in the country (81 services) does not become a challenge to get one people we need, I will continue to grow here” said Charles Sykes.

The executive said they are exploring sites for installation. The options are to the northeast, east or southeast of San Jose.

To be elected he would balance the proximity of the new headquarters with universities, because the staff leaves them looking for this company (with a command of English and technical skills).

Additionally, the company will consider the quality of public transportation for the workers.

The transnational served from Costa Rica to 20 clients, mainly the United States.

At the headquarters of Moravia and Heredia each week solved one million hits consumer companies that outsourced to Sykes for that purpose.

The call center answers calls for technical support, but also financial services.

Evolution. Charles Sykes said that developments in the services sector is positive in the last decade, the country emphasized the opportunities for continued growth in that area. However, he called attention to the need to continue training bilingual staff and to improve access and technology development.

“The great value of this country is its people, investment in education. The way to get jobs for these people is to strengthen the infrastructure of telecommunications, which are fundamental to the service industry, for example” he said.

The president said that so far multinational competition between foreign companies for bilingual staff has not been a limiting factor in finding employees.

Last year, the transformed its own English teaching academy with the intention of improving language learning by those interested in working in your call center.

To date, 900 people have been prepared there.  Carolina Murillo, communications manager for call center said that 70% (630) of the graduates at the academy works for them.

Source: La Nacion

Back when my wife and I started our business in our garage, I tried several different methods of collecting overdue bills. I tried threats. I tried guilt. Didn’t work.

But the “Mom and Pop” approach worked. Here’s how I talked to a customer that owed us money: “Hey, Fred, this is Steve. Golly, we have a tough problem. Our business is small, just my wife and me and one employee. Our payroll is next Friday. We really need your help. Could you get your account paid right away?”

If the customer said he was in a fix, I would be a friend, full of understanding, and say, “Yes, Fred, I realize you are also in a jam. The thing is we were counting on you and we already paid for the product we sent you. Is there any way you could borrow the money and get us paid right away?”

Often that worked. Sometimes Fred would say he couldn’t borrow the money.

Then I would say, “Gosh, I understand. Everyone is up against it these days. Could we charge it to your credit card?”

Often that worked. But Fred might say he was up to his limit.

My response, “Yup, Fred, we are all up to our limit. Let’s see if we can work out a plan that makes sense for both of us. How much of it could you pay today?”

He might say “one half” or “one third.”

No matter what he said, my response was always, “Wow! That’s great. That would help us out so much! Could we charge that to your credit card?” If not, I asked him to wire the money. If that did not work, I asked him to mail a check. At any rate, I was always grateful, not threatening.

Threats and guilt never seemed to work as well as the good old “Mom and Pop” approach.

You may be thinking, “Well, Steve, that’s cool for a small business, but I have a big company.”

Well, we grew from zero to 600 employees, from zero to $60,000,000. We used the same approach. We had 30 customer service representatives. We taught them to use the “Mom and Pop” approach.

“Golly, Fred, we have to meet payroll next Friday. We’re in a real bind. Could you help us out? I know you are in a jam, but so are we. Let’s work this thing out together. Could you borrow the money?”

And so forth. The sequence of events was the same. And our collections were fantastic!

Source: Steve Savage

TCS BPO, accounting for 11 per cent of the revenue of India’s largest information technology services company, Tata Consultancy Services, is eyeing deals in the healthcare, BFSI (banking, financial services and insurance), retail, telecom and media & entertainment sectors in the range of $10-50 million

Abid Ali Neemuchwala, its vice-president and global head of BPO Services, said these deals, along with its end-to-end BPO services offering, will help it attain a compounded annual growth rate of 45-50 per cent, to touch its target of $3 billion in the next five years. The BPO unit had revenue of $415 million last year.

With close to 26,000 employees in the BPO unit, Neemuchwala is also looking at expanding some of its centres. TCS will be adding around 1,000-1,200 people in the next 12 months.

“Unlike the IT business, in BPO you need to be closer to the customer. One is because of the processes, and also due to regulatory issues,” he added.

Currently, it has 1,000-1,200 people in Europe, 2,500 in Latin America and 250-300 in China. The confidence to reach the target comes from the broad services offering that TCS BPO has, as well as the opportunity it sees.

Source: Business Standard

Corporations that require bringing foreign executives and technicians to work in Costa Rica will be able to make immigration procedures quickly through the Internet.

Through a pilot program of the Ministry for Competitiveness and the Costa Rica Immigration Office, intends that applications for residence permit for these workers to be processed in 10 days.

The Pilot Project will start on Tuesday with participation of four companies: Intel, T Menos Costa Rica, Ericsson and Surf Factory.

The initiative unveiled yesterday Jorge Woodbridge, Minister of Competitiveness, and Mario Zamora, director of the Immigration Office.

To make the online transactions interested companies need to register and subsequently include the data and documents of workers who they want come to reside here.  Once immigration officials to analyze the roles and approve the residency cards will be sent by courier to the respective companies.

Although the pilot starts with four companies, and there are 58 companies registered to use the system, said Zamora.

The head of Immigration said the unit daily receives about five requests for multinationals to bring in workers from other countries.

Alejandro Rodriguez, a lawyer representing T Menos (banking software company), Ericsson and Surf Factory, said the digital system will allow companies to save time and money on immigration proceedings.

Woodbridge said this is an additional step by the government to “eliminate unnecessary an bureaucratic procedures”.

“For businesses, time is money and this step will improve Costa Rica’s competitiveness,” he added

Source: La Nacion

Aug 24 (Reuters) – Wells Fargo Securities raised U.S. offshore Information Technology and business process outsourcing sector to “market weight” from “underweight,” and said the market displays signs of bottoming, although an upturn is not yet visible.

The second-quarter results reflected signs of market stabilization, especially in the critical financial services and North American markets, analyst Jennifer Fritzsche wrote in a note to clients.

Prominent offshore IT services firms including Infosys Technologies Ltd (INFY.BO: Quote, Profile, Research), Wipro Ltd (WIPR.BO: Quote, Profile, Research) and Cognizant Technology Solutions (CTSH.O: Quote, Profile, Research) have beaten quarterly profit estimates in their latest earnings.

The worst of price pressure is behind and there are improving opportunities in non-traditional markets such as India-to-India and into Japan, Fritzsche said.

“Balance sheets continued to strengthen with all the leaders having significant net cash positions… and provide “dry powder” for any M&A driven offering expansion,” the analyst wrote.

(Reporting by Bijoy Koyitty in Bangalore; Editing by Unnikrishnan Nair)

Source: Reuters