Call centers: creating profits in Latin America.(Special Advertising Feature)(Advertisement)

Call centers are quickly becoming a springboard for economic growth in the Latin American/Caribbean region. Benefiting from the strong demand for Spanish-speaking call center agents and the trend for American and European companies to outsource workers in developing countries, the Latin American/Caribbean call center market is expected to be the fastest growing in the world from 2001 to 2007, according to market analyst Datamonitor. The region's number of agent positions is expected to rise from 177,000 to nearly 700,000 by the end of 2007.

By the end of 2008, that number is expected to exceed 730,000--with a compounded annual growth rate of 17%--the highest of any region globally.

The largest call center market in the region is in South America's most populous country, Brazil, which holds almost 50% of the region's agent positions.

Datamonitor expects Mexico to be the fastest growing market for outsourced agent positions through 2007, driven in large part by the efforts of outsourcers attempting to service the growing Spanish-speaking population in the U.S. The number of agent positions is expected to rise in Mexico from almost 51,000 in 2002 to more than 190,000 in 2007.

Mexico and Brazil accounted for 290,000 agent positions in 2003, representing 86% of the entire agent population in the region. By 2008, 83% of the total Latin American agent population will be in Brazil and Mexico.

Chile follows closely behind Mexico as the call center location of choice in Latin America, according to Datamonitor, because it has weathered political and economic upheaval better than other Latin American countries. About 35 multinational companies are operating call centers in Chile, according to the Chilean Association of Information Technology--which expects the sector to grow further from around US$380 billion in outsourced services from Europe over the next five years.

Chile has set up a register of certified English speakers to entice companies worldwide to set up operations there as part of the government's publicized campaign to make Chileans "the best English speakers in Latin America."

Argentina is rapidly becoming a top choice for outsourced call center operations as well: The country has the fastest growing offshore-outsourced agent population in Latin America and will add 7,000 agent positions for a total of 10,000 by 2008, according to Datamonitor.

Call centers have also become an important source of employment in Panama, according to government officials. The country has six operating call centers that currently benefit from the government's new National Program of English Scholarships to Work, which involves 13 training facilities at a cost of US$2.6 million. The first group of 712 graduates already has job offers in the centers, government officials have said.

Many thriving call center operations in the Latin American/ Caribbean region are prime candidates to serve the growing Hispanic clientele in the U.S. and beyond.

The U.S. Census Bureau reported as of July 2002 there were 38.8 million Hispanics in the U.S., compared with 35.3 million in 2000: a 9.8% increase. Hispanics account for one-half or 3.5 million of the 6.9 million total population growth from April 2000 to July 2002.

In addition, there are over 200 million Spanish language speakers in Central and South America: 104 million in Mexico alone. With these numbers in mind, the challenge for call centers throughout the Americas is how best to serve their growing multilingual and multicultural markets.

Considered a leader in the contact center industry in Latin America, Avaya enables businesses worldwide to deliver superior results by providing communications networks, applications and services.

More than one million businesses--including 90% of the Fortune 500 companies--depend on Avaya for their communications needs, making the company a world leader in secure and reliable Internet Protocol (IP) telephony systems and communications software applications and services.

Avaya, which operates in 92 countries, has partnered with governments and businesses throughout Latin America and the Caribbean to provide communications solutions and services to help companies reduce costs, lower risk and grow revenues.

Currently, Avaya has about 38% market share of the Latin American/Caribbean contact center solutions market--making the company the leader in the region for the past three years, according to a recent study from independent industry analyst firm Frost & Sullivan.

The study also found that Avaya is the leader in the contact center solutions market in several sub-regions, including Brazil (31%); Mexico (44%); Southern Cone (36%); Andean countries (35%), Central America and the Caribbean (31%).

Local Avaya contact center success stories include DIRECTV Mexico, Atento Peru, Unibanco in Brazil and UOL in Argentina.

Consistent with the growth in the region's contact center market, Avaya has seen its number of agent positions grow from 3,000 to 5,000 just within the Central American and Caribbean countries, according to Edwin Figueroa, managing director of Avaya in Venezuela, Ecuador, the Caribbean and Central America (VECCA).

"Countries in Central America and the Caribbean have been able to provide an educated, bilingual workforce in stable economic and political environments that are easily accessible and attractive to U.S. customers," said Figueroa. "The communications infrastructure is also strong to support call center operations in these countries. Companies are currently realizing a 30% to 40% savings in human resources costs just by locating call center operations within the region."

The benefits of contact center operations also extend to the bigger picture of the economies of Latin America and the Caribbean, he added: "For every contact center job, 10 indirect jobs are created to support it."

To serve the growing needs of call center operations and empower them to be profit centers, companies need continuous access to a full picture of the customers that use them, according to Enrique Perezyera Olvera, PeopleSoft senior vice president for the Latin America & Caribbean Region.

PeopleSoft is the world's second largest provider of enterprise application software, with 12,200 customers in more than 25 industries and 150 countries. The company experienced 40% growth in revenue in 2003 from its sizable interests in Latin America and the Caribbean, which include operations in Brazil, Central America, the Andean and Caribbean regions, Mexico and the Southern Cone.

With PeopleSoft's acquisition in 2003 of former competitor JD Edwards, it has expanded its client base in Latin America to include mid-sized enterprises in addition to its long list of large clients, such as Banamex, Citigroup, HSBC and the Mexican Social Security office. Significant new contracts PeopleSoft has won in the region over the past year include a customer relationship management (CRM) project for ABN Amro in Brazil and a contract to modernize the Mexican tax collection system.

PeopleSoft recently launched the PeopleSoft Enterprise CRM 8.9 solution, which allows companies to provide call center operators with a complete view of their customers--from complaints they have made and products they have been sold, to the classification of the services they buy and their basic demographics.

"This 360 degree view of customers can help companies turn problems into increased sales, while improving service," said Perezyera Olvera. "With the ability to do this, the call center is transformed from a cost center into a profit base because the PeopleSoft Enterprise CRM 8.9 makes it possible to tie-in a company's business strategy with each customer interaction."

In addition, PeopleSoft recently announced significant results from its Total Ownership Experience initiative, which is directed at applying technology to the people-intensive process of owning enterprise software. The company dedicated more than 1,000 developers to dramatically raise the bar in the industry for the way customers implement, use and maintain their enterprise applications.

The initiative has resulted in significant improvements over previous releases, including 25% less time for application installments; 30% faster average time to complete over 140 key user tasks; and 80% fewer steps to apply application updates. Perezyera Olvera attributes PeopleSoft's success in Latin America to both its products and commitment of resources: The company has nearly 600 staff and operates one of the few software research and development laboratories in the region.

"Our focus has been on Latin America for the past several years," he said. "We have recruited the top talent who provide enterprises in the region with essential products, as well as local knowledge and decision-making power."

Off shoring call center operations in the Latin America/Caribbean region might be the answer to service issues in general as well as being a cost-saver for U.S. companies: Typical U.S. call center operations can save between 20% and 50% by offshoring according to Call Center Magazine.

If a company is looking for an outsourcing option, its call center function is probably one of the best choices because it is a scripted activity and is portable with a relatively low level of risk, according to Bradley J. Gross, a technology law and outsourcing expert with the law firm of Becker & Poliakoff.

"We are seeing a lot of deals in Brazil, Argentina, Mexico and Colombia, as well as in Chile and Venezuela--but to a lesser extent," Gross said. "This increased activity is mainly due to the increase in the number of Spanish speakers in the U.S., but also because these countries have beefed up their telecommunications infrastructure over the last few years, providing an environment conducive to call center business."

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