Investment Opportunities In Contact Centers And Bpo

Contact Centers and BPO

Sector Profile

Contact Centers and Business Process Outsourcing (BPO) have become one of the main strategies for global companies seeking operational cost reduction, as well as for diversifying risk. Nicaragua stands out as an attractive emerging destination since it offers excellent investment opportunities for companies looking to expand their operations in order to increase their global competitiveness.

Over the past years, the Government of Nicaragua has taken measures to foster a favorable business environment to promote the successful development of outsourcing companies in the country. World-renowned companies with excellent business practices have decided to invest in Nicaragua in search of talent to complement their regional and global operations; these include Sitel, Stream Global Services and Concentrix.

Investment Opportunities

In 2012 Nicaragua stands out as one of the top emerging Business Services Outsourcing (BSO) and Knowledge Process Outsourcing (KPO) markets of the Central American region. There are currently 25 companies exporting services abroad, offering different services from customer service to software development, altogether employing more than 4,500 bilingual young and talented professionals. These companies provide outbound and inbound services to international clients. The companies are located in Managua, where there is a high concentration of university students.

Some of the activities being carried out in Nicaragua are:

Customer Service
IT Support
Telemarketing
Collections
Business Intelligence
Software Development
Financial Analysis

There is an untapped potential of bilingual labor force and a wide number of graduates either unemployed or underemployed that are ready to be hired by BPO companies. Another benefit that Nicaragua offers is a modern and fully privatized telecommunications system.

Why Nicaragua?

Nicaragua offers a unique set of competitive advantages for companies in the Contact Center and BPO sector, such as:

Strategic Location

Because Nicaragua is on U.S. Central Standard Time Zone (GMT - 6:00. CST in U.S., Mexico and Central America), it can offer timely services to the United States without losing valuable working hours.

Availability of Young, Vibrant and Talented Labor Force

The Nicaraguan population is very young, nearly as 77 percent is under the age of 39, being 21.7 years the average age.

Our national education system includes quality upper-level education, as well as technical training, to meet the immediate and long-term needs of the labor force. There are 55 universities and over 113 technical institutes.

A survey conducted by PRONicaragua in 2010 revealed that the top three most popular majors are Business Administration, IT & Engineering, and Science and Medicine. In the technical field, through the work of the National Technological Institute (INATEC, for its acronym in Spanish) and affiliated private sector institutions, the most popular technical fields of study are Accounting, Secretarial Courses and Business Administration.

In addition, INCAE, a Harvard-affiliated Business School ranked number one in Latin America, has a campus in Managua and constitutes an important source of professionals with high-level managerial skills.

Proven Availability of English-Speaking Personnel

It is important to mention that there is one US accredited English Language University, three bilingual university programs, and five bilingual secondary schools, and a wide number of English institutes that provide a pool of educated candidates for English-speaking contact centers and BPO companies.

Although Nicaragua's official language is Spanish, English has become very popular. For historical reasons, there is strong cultural affinity with the United States and the country has experienced what has been called the "reverse brain drain" phenomenon, which refers to people who left the country in the past and have returned to Nicaragua with English skills and international business expertise.

According to a PRONicaragua's survey that covered 14 languaged institutes in the country, in 2011 and the first semester of 2012 over 12,700 students were enrolled in English courses in the different bilingual high schools and universities and there are more than 30 English Institutes across the country.

The following graph shows the increase of bilingual talent in the BPO Sector in Nicaragua:

Bilingual employees

Source: PRONicaragua, 2012.

Labor Environment

Nicaragua provides an excellent labor environment for Contact Center and BPO operations. The labor code allows day, mixed and graveyard shifts (48, 45, and 42 hours per week, respectively).

Modern Telecommunications Infrastructure

Since the late 90's, Nicaragua began a technological transformation that implemented the latest technologies to reinforce its telecommunications infrastructure. The telecommunication sector is fully privatized and is considered to be one of the most modern in Central America. Nicaragua provides high quality, redundant fiber telecommunications connections via three international submarine fiber optic cable systems (ARCOS-1, MAYA-1 and Emergia).

Some of the major players in the telecommunications industry in Nicaragua are: Amnet, BT, Claro, IBW, Ideay, Navega, Telefónica, Yota, among others.

BTbpo NavegaBPO

The following services are available in Nicaragua:

Internet: Fractional to full DS3 service provided.
Voice Network: Analogue and digital land line voice services are provided.
4G: WiMAX technology through fiber optics and wireless (microwaves) for Internet and mobile phones.

Technology Providers: All mayor technology brands (e.g. Dell, HP, IBM, Cisco, Microsoft, Oracle, Avaya, Nortel) are available through local authorized distributors.

Competitive Cost Structure

Nicaragua's average salary in this sector is the most competitive in the region, providing a great opportunity for operation cost reduction. Also, the private telecommunications market assures high quality services at very competitive prices that vary according to bandwidth requirements.

Generous Tax Incentives

Nicaragua's Free Zone Law has been extended to Contact Center and BPO operations. Under this incentive regime, companies exporting services enjoy a 100 percent tax holiday and full duty exemptions on imports of capital goods. Nicaragua's free zones incentives are regulated by the National Free Zones Commission.

Testimonials

"Concentrix initially came to Nicaragua on a joint-venture about three years ago and realized then that the country provided everything that we needed, both from a human resource perspective to an investment advantage perspective. We are definitely happy and looking at Nicaragua as a long-term location. We plan to double our capacity very soon as we are currently undergoing the second phase of our investment here."

Javier Hugentobler, Managing Director of Concentrix in the country.
www.youtube.com October, 2012.

Contacts in PRONicaragua

Let us arrange a personalized agenda for your visit to Nicaragua that suits your business needs. We invite you to discover why Nicaragua is The Right Move for Your Business!

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