Cesar CantuA new vision and a day for transatlantic global business connections emerged yesterday at CrossConnect Forum, a conference launched by the Nearshore Americas team that highlighted the vast opportunities for digital business partnerships.
Over 20 industry experts painted a bullish picture of the trade potential between both regions. Demand for tech and business services keeps expanding in the United Kingdom and other European markets. The UK’s tech sector alone raised over 24 billion pounds (equivalent to about US$28.4 billion) in venture capital funds through 2022. Over the last five years, VC investment in UK tech reached almost 100 billion pounds (US$118.4 billion), a sign of investors’ faith in the sector.
In spite of this growth, talent availability remains a major problem for the region. It is estimated that tech job vacancies in the UK, for example, reached 870,000 during the first five months of 2022 alone, with software development being the most in-demand skill and security seeing a strong uptick. In its latest Digital Leadership Report, consulting firm Nash Squared found that 68% of executives surveyed in the UK see “a lack of skills is standing in their way [of growth]”, while 57% fear they will “never have enough access to enough tech staff”.
As seen on the opposite side of the Atlantic, an expansion in demand requires a healthy availability of talent and service providers who can help businesses keep up with their own needs and those of their customers. That’s where industry analysts and entrepreneurs see an opening for a boosted CALA-Europe GBS pipeline.
“There is a need for good talent, a need for technology […] We remain bullish”, commented Rohitashwa Aggarwal, partner at Everest Group, during a panel in the morning session.
While Latin America and the Caribbean have already picked the interest of a wave European businesses in search of new delivery locations and fresh talent pools, regional capabilities remain untapped or –worse of all– ignored.
“The first major issue is awareness”, stated Nuno Seixas, COO at tech consulting firm GBH, during a panel, echoing comments made in a previous interview with NSAM.
CrossConnect speakers put forth a strong sales pitch in favor of CALA, making mention of the diverse and abundant talent pool, the wide availability of service vendors and delivery destinations, high levels of English proficiency, geographical proximity and cultural affinity, among other regional features.
“When you look at Granada, Barbados, St Lucia, Belize, Guyana and Trinidad & Tobago and all who are represented here, those are all high potential opportunities to continue growing”, said Yoni Epstein, CEO of itel, who participated as keynote speaker and panelist at the event. Over 2o countries were represented at the event, including over a dozen Latin America/ Caribbean countries.
Diversify and Conquer
Now more than ever, diversification is the name of the game.
The explosion in demand for tech services and for the skills to provide them showed companies that their eggs cannot be put in a single basket. A delivery strategy that relies on a handful of locations and partners is almost guaranteed to bring operational hiccups down the line when faced with seasonal upticks in demand, talent shortages, financial pressures and even natural phenomena.
Panelists at CrossConnect agreed that, for Europe, looking further West is not a matter of supplanting one “core shore” for another, but of building a more resilient delivery ecosystem.
“The proposition is not that we should move from one region into another region”, said Aggarwal. “The proposition will be: We need a more global portfolio of locations, of talents, of skills to build a more robust, more sustainable pipeline.”
With traditional delivery sites growing saturated, scouting for greener pastures makes even more sense. According to research by Everest Group, 60% of new service delivery activity over the past five years came from tier-2 and tier-3 markets.
“What the Latin America region offers is the ability to diversify to a number of locations”, Aggarwal added. “We’ve seen a lot of growth in the region, a lot of investment, and remain optimistic about the role this region will play in support for the other markets”.
Though in its early stages, the argument seems to be working.
“It’s a test to determine if it’s really worthwhile looking more towards the West versus staying where they currently are looking; locations like South Africa, like the Philippines. So far, it has provided success”, stated Yoni Epstein.
Ditching the Stereotypes
One of the major hurdles faced by the project to boost the tech services pipeline between Europe and CALA is perception itself.
Though there’s enough information available to show otherwise, Latin America and the Caribbean remain as vacation spots, sources of raw materials or call center hubs in the eyes of a lot of potential business customers in Europe and even in the Americas themselves.
“There is a disconnect in terms of how organizations on the buyside view a location versus how the BPOs who are actually delivering from those destinations are finding the operating environment”, commented Peter Ryan, President and Principal Analyst at Ryan Strategic Advisory, during one of his interventions at CrossConnect.
“The buyers would generally rate a number of the Caribbean or LATAM locations very highly in terms of how they would potentially look to try to place more business”, he added.
With talent remaining as the main driver behind location strategies, Nuno Seixas emphasized the importance of putting workforce quality and availability at the forefront of the sales pitch for the CALA region. “When we talk about it being a Dominican Republic-based company, people think of beaches, holidays and BPOs. But when we show our case studies, we build that trust […] We took as a starting point good talent”, he commented.
Although shaking the stereotypes off can help CALA sell its potential as a hub for the export of tech services in European markets, renouncing to the most attractive aspects of that reputation might prove counterproductive. After all, as shown by the rise in digital nomadism in the region, who can resist a workplace that also offers the beauty and amenities of a vacation spot?
“We have had a long relationship with the Caribbean […] Why not do it from a holiday perspective but also add a business aspect?”, commented Yoni Epstein. “We can do work in much warmer, much more fun destinations, much more beautiful destinations”.
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