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The next 50 years: Nearshoring and process outsourcing

ID: INTERACTIVE DIALOGUE

David Mullings

Sunday, July 15, 2012    

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It seems to me that too much time is being spent looking back at the first 50 years of Jamaica under Independence instead of looking forward to the next 50 years, especially what mistakes not to repeat.

There has been talk for many years about business process outsourcing centres, mainly call centres now but with the opportunity to move up the value chain to things like medical records transcription, programming and software development as well as payroll and accounts receivable processing. We mainly have focused on call centres and those have helped to prove that Jamaica is a viable location.

Jamaica talks about creating 10,000 ICT jobs and we now have some 13,000 employed in the business process outsourcing sector, but we can do much better. My attendance at the Trade Americas Expo in Miami a few weeks ago opened my eyes to exactly what we are missing in our own region. Colombia currently employs 120,000 people in the business process outsourcing sector, mainly through Indian firms that have set up shop there because it is nearshore instead of outsourcing half-way around the world.

Recall that the Latin American and Caribbean region is extremely close to North America, usually in the same time zone, and flights are much shorter to physically visit a centre if there is a problem or to vet them before a contract.

A Latin American centre makes sense to service the growing Hispanic population in the USA that are more comfortable speaking Spanish, but an English-speaking customer does not want to deal with an agent that speaks Spanish as his/her first language.

This is where the opportunity for Jamaica comes in; we are the largest English-speaking country in the Latin American and Caribbean region.

Partnering with some of the firms in Colombia and other parts of Latin America to handle their English-speaking contracts while they keep the Spanish-speaking ones makes complete sense and would immediately increase jobs in Jamaica. Yes, we start with call centre jobs, but we can parlay that new thrust into moving up the value chain. Jamaica is simply not on the radar of many organisations and I know this because I have spoken to a few Fortune 1000 firms, pitching them on Jamaica and they were surprised.

According to a Miami Herald article on May 22, 2012 titled 'Nearshoring offers advantages to South Florida companies', PepsiCo Latin America "decided to locate a shared services operation in Mexico 13 months ago after studying factors such as political stability, literacy levels and costs in several Latin nations. The Mexico centre, which handles corporate back office services for the region, now has 43 employees and will eventually reach 70".

We are a politically stable country, never had a coup or dictatorship, comparable literacy levels, high number of university graduates, top class IT infrastructure and competitive costs. Jamaica needs to be one of the countries being considered for these kinds of operations.

Our costs are even more competitive now because LIME has relinquished its monopoly in the free zone, allowing competition and thereby allowing costs to go down. According to Yoni Epstein, the current chairman of the Business Process Industry Association of Jamaica, "Jamaica only has about six per cent of the outsourced business to the Caribbean and Latin America".

I must commend Mr Epstein, who happens to also be a personal friend since 2002, for setting a goal of unity in terms of seeking out contracts. Jamaica cannot do well in this area or any other if an association is not championing the sector and it is left to individuals. The Government also must play a greater role through JAMPRO.

The team there has done good work in getting to 13,000 jobs with more companies planning to come in, but we need a game changer. At the Trade Americas Expo I was being courted by trade representatives from Colombia, Argentina, Mexico and the Panamanian ambassador, all wanting me to look at investing in their business process outsourcing sectors. There was no one from Jamaica there trying to get me to look in that direction.

Jamaica 50 should not just be about the previous 50 years, but the next 50 years. We have a real chance to accomplish what really should have been already, so let us now come together and focus on the future.

David Mullings is president and CEO of Keystone Augusta and was the first Future Leaders representative for the USA on the Jamaica Diaspora Advisory Board. He can be found on Twitter at twitter.com/davidmullings and Facebook at facebook.com/InteractiveDialogue

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