BPO/BPM - An Industry with Global Opportunities in Bogota

July 24, 2012
  • Bogota is now becoming a main hub for BPO / BPM services.  

  • It is a common misconception to confuse BPO/BPM - non-voice -  and BPO/BPM - Voice (contact center) services.  

  • Bogota's potential for the outsourcing of services for different vertical industries, lies in its labor force.  

  • Bogota addresses significant challenges in its purporting to provide world-class BPO services. 

Bogota is becoming the Colombian (and Latin American) capital for the provision of BPO / BPM services.  
Adriana Suarez, Executive Director of Invest in Bogota, explains:  "The BPO/BPM industry has been in a consolidation process in Bogota for several years, and it has been undergoing a transformation process:  the city has moved from offering basic outsourced voice and customer service options, to focusing on the provision of specialized back-office and similar services requiring a greater level of complexity, in terms of the professional skills of its operators.

Contact center companies have begun to migrate to secondary cities which provide an interesting cost-benefit offering, while BPO/BPM -non-voice- companies have chosen to stay in cities ensuring sufficient, qualified, experienced labor, capable of supporting clients in matters such as accounting and finances, human resources, process control, statistics and re-engineering.   In addition to these requirements, BPO employees also need to be bilingual".  
Furthermore, BPO -non-voice- services are becoming even more specialized, turning into BPMs, Business Process Management. In the traditional BPO - non-voice- service, a company seeks to outsource those services which are not directly related to its corporate purpose; that is, accounting, human resources or systems and IT administration, for companies working in mass consumer products, for example.  
The BPM scheme, on the other hand, involves the outsourcing of services going beyond that:  it utilizes business intelligence and the information collected and analyzed in order to redefine the company's internal processes, thus exposing its vulnerabilities and market opportunities.

Some have chosen to dub these types of services as KPO, or Knowledge Process Outsourcing, as the functionality applied gives way to an analytical consulting scheme that looks to improve not just customer-related departments, but also the business as a whole. 

BPO/BPM services involve highly qualified processes and personnel, a component of systems and procedures with international certifications, an operational discipline and scale economies.   The companies in this industry provide different levels of services and to different vertical industries, that is, to companies in different industries such as, the financial, telecommunications and health industries.  
Suarez continues to explain:  "Bogota is an ideal city for BPO/BPM operations since, even though operating from it may be more expensive, the quality of its human resources and the potential for scalability are the main reason for a company in this industry to chose to base itself in Bogota.

The huge potential that the city has for outsourced services in different vertical industries, is based on its labor force of 4 million people (of which 69% is between 16 and 44 years old), its more than 25 thousand people who graduate every year from higher learning institutions, majoring in matters related to transactions (economy, business administration, accounting, etc.),  and its close to 17 thousand people graduating from engineering and other fields related to IT and Communications.  
In Bogota this industry grows steadily; latest estimates indicate that, between 2006 and 2011, the sector has grown at a compounded rate of 17%, and it is now surpassing 2.5 billion dollars in total revenues.   The potential, however, is much greater, and that is why several regional governments are now focusing on streamlining their respective scenarios, tailoring them towards BPO/BPM operations.


Challenges Bogota is undertaking to better tend to the BPO/BPM industry. 

Nevertheless, Bogota addresses significant challenges in its purporting to provide world-class BPO services.  The Executive Director of Invest in Bogota, stated:  "The lack of bilingual personnel is the most complex challenge since, if we are to compete with countries such as The Philippines or India, we do not have a sufficiently strong base of professionals with English skills that will allow the city to meet the growing demand.

The level of mastery of the English language becomes a key competitiveness factor, and a determining element for foreign companies, when choosing where to invest. Although Bogota has a bilingual training program financed by the City, as is the case with Talk to the World, it is still necessary to strengthen the national bilingualism policy, and to articulate efforts to respond to the investor needs in the short, medium and long term.  Bilingualism within a region's population contributes to increase its investment climate, expand labor opportunities and improve the people's quality of life.  
The demand for BPO services in Bogota is so dynamic, that some multi-nationals have are already considering the implementation of a platform in Bogota, to provide services in Portuguese.  
Another important challenge is for the industry to have greater visibility as a labor option; the lack of knowledge by professionals in Bogota in terms of associating the BPO industry with basic voice (contact center) services, leads to an adverse effect, as it undermines the potential that the specialized outsourced services industry has for a vast amount of knowledge areas, such as finance, business administration, law, among others.

The first steps are already being taken to mitigate this situation;  large global stakeholders that have begun operating in Colombia, such as Genpact, offer possibilities for both work and professional growth.   
Santiago Duarte, Consulting Services Manager for Genpact Colombia - "For us, the outsourced services market in Colombia is evolving beyond voice services.  That is why we chose to open our first office in Bogota, since it opens the door to a vast number of local customers, and allows us to offer transactional services with a greater added value for our clients".