BPO boosted by a rising knowledge-based economy

“We are not a country that is especially adept at languages, but the government has made an effort to develop this ability in the country in order to make us more competitive,” says Jose Roberto Sierra Velez, president of Allus Global BPO Colombia.

Government efforts to increase Colombia’s capacity as a knowledge-based society have boosted new industries, such as business process outsourcing (BPO). Recent initiatives include last year’s launch of Vive Digital Colombia, as well as Medellin’s center for the promotion of innovation for knowledge-based industries Ruta N, and the new Colombian Center for Bioinformatics and Computational Biology in the city of Manizales for data processing and software development.

Providing online and onsite language training through SENA, the Ministry of Social Protection’s national learning service, is another of the initiatives that have turned various Colombian cities, such as Manizales, into new global BPO hubs.

“Manizales has become a wonderful hub for call centers and BPO companies. Many foreign investors have chosen this city to invest their money and set up their businesses,” says Caldas Department Governor Mario Aristizabal about his region’s capital.

These developments have not gone unnoticed by the world’s largest BPO conglomerates. Colombia now boasts a number of multinationals operating in the sector including France’s Teleperformance, considered to be a global BPO leader, in addition to a number of companies from India – the world’s largest BPO industry – including Sutherland Global Services and Flatworld Solutions (operating as Colombia Outsourcing Solutions). Genpact, India’s largest BPO company, is set to arrive soon. Spanish companies Avanza, Konecta, Emergia and Telemark are also present, and the U.S. has a presence through companies such as Manpower and Convergys.

“The arrival of new customers in the country has prompted companies to expand their installed capacity, with an impressive increase in call center jobs, mainly located in Medellin, Pereira and Manizales,” says Rodrigo Ferreira Londoño, director of Emtelco, one of Colombia’s largest telecoms services companies.

Emtelco won the Frost & Sullivan Award for Growth Leadership in the contact center/outsourcing services market last year for demonstrating excellence in capturing the highest annual compound growth rate for the previous three years. Emtelco increased its revenues close to 20% in 2009, which placed it among the country’s top five BPO companies for the first time.

Indeed, Colombia’s contact centers alone generated revenues of $550 million in 2009, or roughly 60% of the sector’s total revenue, and the industry is hoping to up this to $2 billion by 2012. A sign of the sector’s rapid growth is also seen in its number of employees. In 2008 it employed 55,000 people. Within the next three years, this figure is expected to reach 155,000. Analysts concur that the government’s clear poli-cies have been a significant contributor in the growth of BPO in Colombia, in addition to a solid legal framework and a favorable business climate.

“We intend to support and strengthen two industries that are fundamental for Colombian technological development: software and BPO. The government is promoting many incentives to provide a space where both industries may flourish,” says Minister of Telecommunications Diego Molano Vega, who adds that Colombia’s returning expats will also contribute to the development of knowledge-based industries. “There is talent in Colombia. There was an exodus of Colombians at the end of the 90s. Now all these professionals are coming back en masse and bringing with them a global vision and international experience.”

The efforts of people like Ana Karina Quessep have also been essential in developing the sector. The executive director of the Colombian Association of Contact Centers and BPO was awarded the International Teleservices Champion Award in Florida last October for her efforts in the positioning, strengthening and expansion of Colombia’s contact centers and BPO industry. It was the fourth consecutive year that the award went to Colombia.