NEARSHORE OUTSOURCING & ESTABLISHING PRESENCE IN THE U.S.

MARKET

Presenter: Luke Bujarski, Senior Research AnalystNearshore Americas

AGENDA

INTRODUCTIONSGLOBAL SERVICES BASICSNEARSHORING SWEETSPOTSESTABLISHING A PRESENCE IN THE U.S.

Gabriel Rozman Blanca Trevino Marco Stefanini TCS Softtek Stefanini

WHY DO COMPANIES OUTSOURCE & OFFSHORE?

Cost Savings

Focus on Core Business

Access to Talent

Expansion into new markets

WHAT SERVICES ARE WE LOOKING FOR?

IT servicesContact Centers (voice)

Back office BPO

Knowledge Process

Outsourcing

Cost Savings

Focus on Core Business

Access to Talent

Expansion into new markets

WHAT IS GLOBAL SERVICES OUTSOURCING?

IT servicesContact Centers (voice)

Back office BPO

Knowledge Process

Outsourcing

Cost Savings

Focus on Core Business

Access to Talent

Expansion into new markets

Software developmentInfrastructure

Helpdesk supportWeb & Apps development

Applications Support GamingMobility

WHAT IS GLOBAL SERVICES OUTSOURCING?

IT servicesContact Centers (voice)

Back office BPO

Knowledge Process

Outsourcing

Cost Savings

Focus on Core Business

Access to Talent

Expansion into new markets

Software developmentInfrastructure

Helpdesk supportWeb & Apps development

Applications Support Gaming

Customer SupportInbound/Outbound Sales

Social MediaChat

WHAT IS GLOBAL SERVICES OUTSOURCING?

IT servicesContact Centers (voice)

Back office BPO

Knowledge Process

Outsourcing

Cost Savings

Focus on Core Business

Access to Talent

Expansion into new markets

Software developmentInfrastructure

Helpdesk supportWeb & Apps development

Applications Support Gaming

Finance & AccountingHuman ResourcesTravel Expenses

Customer SupportInbound/Outbound Sales

Social MediaChat

WHAT IS GLOBAL SERVICES OUTSOURCING?

IT servicesContact Centers (voice)

Back office BPO

Knowledge Process

Outsourcing

Cost Savings

Focus on Core Business

Access to Talent

Expansion into new markets

Software developmentInfrastructure

Helpdesk supportWeb & Apps development

Applications Support Gaming

Finance & AccountingHuman ResourcesTravel Expenses

Customer SupportInbound/Outbound Sales

Social MediaChat

Data AnalyticsMarket Research ServicesLegal Process outsourcing

R&D

GLOBAL SERVICES INDUSTRY

- Total Global BPO/ITO Spend – USD 389 Billion 2012- U.S. market accounts for 45 percent of market- Global market growth: 5.3% CAGR ; U.S. 4.2% source: IDC

USD 70 BillionSource: Global Industry Analysts Inc. 2015 forecast

USD 837 BillionSource: IMS Health2009

USD 920 BillionSource: Data Monitor 2009

USD389 BillionSource: Gartner 2012

GEOGRAPHY OF OUTSOURCING

ONSHORE/DOMESTICOUTSOURCING

OFFSHOREOUTSOURCING

NEARSHOREOUTSOURCING

GLOBAL DELIVERY

Better ICTEconomies of ScaleTax incentivesProperty costs

Cost ArbitrageAccess to skills Access to experience

ProximityTime Zone Alignment Cultural Affinity

24 hr delivery Multinationals Results not Geography

OUTSOURCERS IN LATIN AMERICAWESTERN MULTINATIONALS

INDIAN MULTINATIONALS

LATIN AMERICAN MULTINATIONALS

LATIN AMERICA SMEs

NEARSHORING SWEET SPOTS

Latin America Outsourcing – Drivers:

AGILE SOFTWARE DEVELOPMENTSPANISH CONSUMER MARKET IN THE U.S.DOMESTIC MARKET DEMANDGROWTH IN BUY-SIDE SME MARKET

Testing Mobile UX design Custom work

“We tried Agile with India, but employee turnover got to the point of ridiculousness.” - Chris Snyder CIO Hulcher Engineering

AGILE DEVELOPMENT FOR SOFTWARE

“38 percent of businesses small and large now use Agile

methods in software and application development”-

Forrester Research

Lower costs Better quality Faster speed to market

U.S. SPANISH SPEAKING MARKET

Total Population: 311 millionTotal Latino: 52 millionForeign Born: 21 millionPercentage Spanish Only: 77 %

Population Distribution by Ethnicity

Data Sources: U.S. Census Bureau; Pew Research Center

DOMESTIC / PAN AMERICAN DEMAND

SMALL TO MEDIUM MARKET

SMALL TO MEDIUM MARKET

WHY IS NEARSHORE IDEALLY SUITED FOR THE SME MARKET? More pressure to reduce costs – lack of market diversity Less competition from multinationals (global delivery) Decision to outsource is easier Work with multiple vendors for specific functions – i.e. web

development, contact center, IT infrastructure Need for customized more flexible services Hesitant to work with offshore (India) Requires localized sales and support, but not delivery

WHERE DO I FIND SMEs?

WHO IS COLOMBIA’s COMPETITION?

EVALUATING OUTSOURCING MARKETS

I AM A BUYER/VENDOR INTERESTED IN LATIN AMERICA, WHERE DO I GO?

COLOMBIA MEXICO

SHARE OF EXPORTS VS. DOMESTIC MARKET SERVICES

TOTAL REVENUE 2011: IT/BPO – 2.2 BILLIONAnnual Growth 15-20 %

TOTAL REVENUE 2011: IT/BPO – 12.25 BILLIONAnnual Growth 12-15 %

QUESTION: Can I open a sales office in the united states without actually being there?

ANSWER: YES!

US citizenship and residency is NOT required.

Where should I set up an office?

Five Steps To Starting a Business in the U.S.1. Choose a city that fits your needs2. Find a Registered Agent service3. Incorporate as LLC or Corporation4. Find a start-up incubator, establish a

reputable street address

TOTAL MONTHLY COST TO MAINTAIN AN OFFICE IN THE US - $200 - $500

BREAKING INTO THE US MARKET

THINGS TO THINK ABOUT: TARGET CLIENTELE? TARGET SERVICE OFFERING? ESTABLISH A DIRECT PRESENCE IN THE US? HOW DO I PORTRAY AN EFFECTIVE MESSAGE?

QUESTIONS