The BPO book takes up were 807 ended in the 90s

BY BALFORD HENRY
Senior staff reporter
balfordh@jamaicaobserver.com

Friday, November 30, 2018

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A few years ago Port Authority of Jamaica's (PAJ) Assistant Vice-President of Operations and Customer Relations, Gloria Henry, was expecting a miraculous resurgence of the once popular 807 Garment Industry to save the Montego Bay Free z one.

Three years later the miracle has happened, but not quite like she expected. Instead of an 807 resurgence, that experiment has given birth to a much more promising, lucrative and exciting product, Business Process Outsourcing (BPO), and the PAJ has been leading the way in creating the accelerator environment for its success.

Well, at least, that is the opinion of Henry, who insists that the PAJ gave birth to the idea of developing a local BPO sector, when it started in the Montego Bay Free Zone in 1985.

Henry, who was speaking at Mayberry Investments Limited's (MIL) November Monthly Investment Forum at the Courtyard Marriott in New Kingston, noted that the free zone was actually created for the expansion of the 807 experiment from the Kingston Free Zone, but a decade later 807 hit a virtual sleeping policeman and the boom crashed, leaving a few optimists to continue searching for new markets.

Bear in mind that the expansion of the free zone apparel industry was a product of the relaxed relationship between Jamaica and the United States, which followed the election of the Edward Seaga-led Jamaica Labour Party (JLP) administration and Ronald Reagan's ascendancy to the White House in the 1980.

After a rapid period of growth in the 1980s, however, the Caribbean Basin Initiative (CBI), which allowed the apparel to be assembled in Caribbean free zones from US made cloth easy access into the US market, on a bilateral basis, was upset by a post-Reagan move which favoured Hong Kong, South Korea and Taiwan, instead.

That forced the Jamaican government to start its campaigning to lure more US- textile and apparel distributors to the Caribbean and, eventually, more than 20,000 garment sector jobs were lost islandwide between the 1990s and early 2000 when the agreement folded.

But, according to Henry, it was that idea of US companies outsourcing certain basic aspects of their production process which led to the introduction of BPOs, and so Jamaica was ready to move in that new direction, right away.

The new policy was supported by the fact that the government privatised basic telephone services, with the licensing of Cable & Wireless, which got a 25-year concession on local and competitive international services, the eventual liberalisation of the telecommunications sector in 2000 and the importation of mobile telephones in 2002.

So with empty incubators, a competitive privately-owned telecommunications system, plus thousands of enthusiastic millennials seeking work, Jamaica obviously became one of the most likely hosts for BPO development.

Henry said with that foundation, Jamaica's data operation sector, telemarketing, became the new BPO sector, working out of the two free zones which were initially set up for the 807 programme.

She said that the PAJ is still very active in the BPO sector with about 11,600, or one-third of the approximately 36,000 jobs in the sector, including 10,000 in the Montego bay Free Zone and over a thousand more in the Portmore Informatics Park.

The authority owns over 750,000 square feet of space within its two free zones — 665,000 square feet in Montego Bay and the rest in Kingston, Portmore and St Ann.

Primary services, she said, are being provided in the PAJ controlled areas include customer service, tele-services, tele-sales, technical support, finance, accounting, receivables management, data entry and quality assurance.

PAJ tenants include itelbpo, Go Solutions and ADS Global. However, there are a number of other companies operating in Jamaica, including Global Gateway, VXI Jamaica, E Tech, DG BPO Jamaica, NICE BPO International, Yatemann International (Portmore) and Jobs Limited in St Ann.

Incidentally, Business Process Outsourcing is regarded as a subset of outsourcing that involves the contracting of the operations and responsibilities of a specific business process to a third-party service provider. Originally, this was associated with manufacturing firms, such as Coca-Cola that outsourced large segments of its supply chain

According to the Labour Market newsletter produced by the HEART Trust NTA, the global market for BPO is projected to reach US$262 billion by 2022, an almost 75 per cent increase.

This growth is expected to be driven by factors such as the development and availability of new technologies, process automation, big data analytics, cloud services and embedded analytic-based BPO.

The 2016 Kerney Global Services Location Index says that Trinidad and Tobago and Jamaica were the only two Caribbean countries among the 55 locations in the Index, with Trinidad ranked at 42 and Jamaica at 43.

BPO is typically categorised into back office outsourcing, which includes internal business functions, such as human resources or finance and accounting, and front office outsourcing, which includes customer-related services such as contact centre (customer care) services.

BPO that is contracted outside a company's country is called offshore outsourcing. BPO that is contracted to a company's neighbouring (or nearby) country is called nearshore outsourcing.

Often the business processes are information technology-based, and are referred to as ITES-BPO, where ITES stands for Information Technology Enabled Service. Knowledge process outsourcing (KPO) and legal process outsourcing (LPO) are some of the sub-segments of business process outsourcing industry.

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