Hello and a belated Happy New Year. After a brief break from blogging, I'm back and ready to start posting again. So if there are stories, issues or trends you'd like to see covered here, please don't hesitate to {encode="jessica@sourcingfocus.com" title="email"} me.
One area I'll be keeping a close eye on in 2010 is Latin America and the Caribbean. For a start, it's a region that's already benefiting from the willingness of US corporations to "nearshore" back-office operations.
And let's not forget it's census year in the US. According to a recent article in The Economist, America's Hispanic population is this year expected to come in at almost 16% of the total, having overtaken the black population, likely to be put at around 2.5 percentage points less.
Spanish is already the second most-common language in the US and, according to 2007 figures from the US Census Bureau, Spanish is the primary language spoken at home by over 34 million Americans aged five or over. Increasingly, this audience has considerable consumer clout.
For many US companies, these demographic trends - along with the continued need for cost reduction - boost the attractions of Latin American business process outsourcing, and in particular, call centre operations.
There's also been a flurry of mergers and acquisitions in the region, as this article from research company Zagada's Nearshore Journal site outlines.
Last year's bumper $6.4 billion acquisition of ACS by Xerox, for example, was preceded by ACS's own takeovers of Argentina-based Grupo Multivoice in 2008 and e-Services group in Jamaica in 2009. These deals were not inconsequential buy-ups of tiny 'boutique' players, either: Multivoice had $40 million in revenue and 6,000 workers. The deal value was undisclosed. In the case of e-Services, the company had $65 million in annual revenues, 4,000 workers and was acquired for $85 million.
Three companies - Bancolombia's Multienlace BPO subsidiary, Actionline Codoba of Argentina and a small Peruvian contact centre - all snapped up by a US-based private equity firm, Eton Park Capital Management.
Other notable targets in the region include Star Contact (Panama), bought by US-based NCO Group; Teledatos (Columbia), bought by French BPO company Teleperformance; and National Asset Recovery Services' (NARS) centres in Panama and Jamaica, which were purchased by HIG Capital, another US-based private equity firm.
Meanwhile, homegrown Softtek of Mexico has expanded into other countries in the region in recent years, including Argentina and Paraguay, as well as elsewhere in the world. For example, in July 2009, the company opened a new global delivery centre in Wuxi, China.
As analyst Peter Ryan of Datamonitor recently commented. "Latin America will equally benefit from possible delivery engagements with companies based in Spain, Portugal and other parts of Western Europe that are interested in taking advantage of price point arbitrage, a large labor pool and ever-increasing language skills among university graduates."
He adds that the increase in interest among Indian-based services organizations for possible roll-outs in Latin America has been strong over the past few years and is likely to grow as Indian labour becomes more expensive.
All of this points to a fast-growing and exciting market in 2010.