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Industry Research : Mexico Rises in BPO with India’s Annual Economic Outlook
India’s pre-budget Economic Survey report was delivered to the Indian Parliament at the end of February. The annual economic report showed a 10% loss over the last 5 years in Business Process Outsourcing (BPO) business to other countries making a notable dent in India’s $20B world share. Mexico is emerging as a formidable player in the BPO sector with other strategic locations such as the Philippines and Brazil. According to the NASSCOM report, most of this loss is in the voice contract sector.
The Tijuana-based Call Center Services International (CCSI) cites this as yet another sign that Mexico is becoming a more attractive nearshore call center option for North American firm’s call centers and BPO needs.
While India may be scrambling to recoup these losses, countries like Mexico are happy to pick up India’s slack as companies seek a more bi-cultural nearshore option for their customer service call centers. Mexico’s bilingual and bicultural workforce connects easily to their North American customers in the United States and Canada. These close geographic and cultural ties are coupled with strong IT knowledge in a country that produces more engineers per capita than the United States. From technical support and customer service to debt collection and order processing, firms such as CCSI are showing the closer you are to home, the more satisfied the customer.
"When we are able to reduce salaries and overhead for our clients by more than half, that’s when they are starting to look at nearshore locations such as Mexico," remarked Eric Esparza, president of CCSI. When companies such as manufacturers are seeking an alternative to US-based call center operations, they are starting to look nearshore locations such as Mexico. "With increasing negative sentiments for offshore locations in the Asian Pacific, Mexico’s proximity and its bicultural and bilingual workforce are proving to be not only cost effective, but more desirable."
India is no longer an ideal cost effective destination for the BPO sector. With competitive salaries and wages, Mexico also outshines its Indian rival in its close cultural ties with its neighbor, the United States. Additionally, the pro-business environment fostered by such agreements as NAFTA, have led to dependent and close economies in North America. Perhaps in an effort to shake these ties, the annual report suggested the Indian BPO industry gear up to meet challenges and to begin, "information campaigns to dispel the myths and fears about outsourcing needs to be undertaken by the industry in the developed economies."
While combating what the report views as myths, Mexico also surpasses India in its progressive business regulations aimed to minimize the requirements to do business and reduce the frequency of tax payments. The Indian Economic Survey continued to suggest revisions of domestic regulations saying, "While there are many domestic regulations in our major markets which deny market access to us and therefore need to be negotiated at multilateral and bilateral levels, there are also many domestic regulations in India which hinder the growth of this sector." Every aspect of the cost to do business is evaluated when selecting a site for call center services, from salaries to business regulations and taxes.
Posted by Veronica Silva Cusi, news correspondent
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Published: Friday, May 10, 2013