Special ReportTUESDAY, SEPTEMBER 29, 2009The gateway to the global sourcing of IT and BPO servicesThe 2009 Destination Coverage in <strong>Global</strong> ServicesOffshoring: The Caribbean ExperienceOne of the most preferred tourists spots, Jamaica is now an offshoring hub too. With itsfast increasing emphasis on the quality of its infrastructure and workforce, the countrydifferentiates itself as a nearshore outsourcing destination. However, Jamaica is notpositioned as a low-cost destination. A look at the Jamaican outsourcing industry— By Diksha DuttaJamaica might have a violent history considering thatthe Spanish conquered the peaceful Awarkas, way backin the 16th century. But today, the country has risen withpassion and perseverance and is a potential place to tradeand invest for countries across the globe.Similar time zone makes Jamaica a convenient nearshoreoutsourcing location for the outsourcing servicesbuyers from neighboring countries, including the U.S.,Latin America and other Caribbean countries. The timezone varies zero to three hours from North America andfive to six hours from Europe.“Jamaica is an ideal destination for investing as its locationprovides a crossing point between both North andSouth America,” explains Hugh Cresser, Principal Consultant,<strong>Emerging</strong> Markets, PA Consulting. International directdialing links subscribers to the U.S., Canada, Europeand the Caribbean and the Jamaica. Digiport Internationalin the Montego Bay Free Zone offers satellite earth stationswith support technology to facilitate satellite linksand digital switching to carrier networks in North Americaand Europe.“Customers like Jamaica because of its ease of access.We have several customers living in Atlanta. It’s just as easygetting on the plane to go to Jamaica as it is to go to Washington,DC. Proximity to the U.S. is certainly a factor, andthere are great labor resources,” says Tom Blodgett, Execu-Major <strong>Outsourcing</strong> <strong>Cities</strong> in JamaicaCityMontego Bay FreeZoneThe Cazoumar FreeZonePortmoreKingstonSource: <strong>Global</strong> ServicesUSP>> highly developed financial services sectorthat offers on-line banking facilities,and foreign companies may operate theircorporate accounts at any of these institutions.>> Ready access to qualified graduates withskills required for the competitive marketplace>> Client Relations Division helps investorscontact recruitment agencies and traininginstitutions for specific skills.>> Office space, telecommunications facilities,a Flow NOC, catering (canteens) andtransportation for workers.>> Informatics Park has prominent offshoreinvestment opportunities in ICT>> <strong>Top</strong> quality information processing facilities>> A young, well-educated and computer literatepopulation.>> Huge potential inspite of its high crimerate>> ACS recently purchased a company callede-Services with established operations inKingston.40 <strong>Global</strong>Services www. globalservicesmedia.com October 2009
The gateway to the global sourcing of IT and BPO servicesSpecial ReportAttrition Rate in Jamaican <strong>Outsourcing</strong> IndustryLow attrition rates relative to industry average>> F&A: 22%>> Data entry: 0%>> Overall: 13%>> Wages: 40% to 60% lower than the U.S. and Europe>> Estimated Average Call Center/BPO wage: (gross, pre-tax andwithout benefits)>> Call center wage $3.<strong>50</strong> per hour>> BPO operator wage from $4.<strong>50</strong> per hour>> Main Players: Offshore Call centers and BPOJamaica Trade and Investtive Vice President and Chief Operating Officer, CommercialOperations, ACS, a Dallas-based IT service providerand has become the main player in Jamaica by making 100acquisitions over a decade and having 5,400 employees.Jamaica’s world-class Business Process <strong>Outsourcing</strong>(BPO) capabilities are the result of its educated Englishspeakingworkforce, cultural and physical proximity toAmerica and Europe. <strong>Global</strong> serviceproviders such as ACS, Alliance One,Salary.com, Vista Print, NationalAsset Recovery Services, e-Services,Paragon Communications, MarketTrack and Accent marketing, have aprominent presence in the country.There are total 24 delivery centersin the country.To establish the IT services outsourcingin Jamaica, the countrywill require huge investments inhigher-tier labor resources and infrastructuresuch as hardware andbandwidth.“The industries that look towardJamaica as an outsourcing destinationare Insurance, financial entities and customer serviceorientedcompanies. Companies looking toward Jamaicaas an outsourcing partner tend to outsource the followingdisciplines: Debt collection, finance and accounting, HRmanagement, graphic design, payroll, customer service,and insurance claims and tech support,” says Don A. Gittens,Senior Consulting Officer, Knowledge Services, JamaicaTrade and Invest.As compared to India and the Philippines, the attritionrate in Jamaican BPO is 15 percent lower, reports PA Consulting.Though the labor cost in the country is higher ascompared to the other two.To establish the ITservices outsourcing inJamaica, the countrywill require hugeinvestments in highertierlabor resources andinfrastructure such ashardware and bandwidthHowever, as the Caribbean community has the highestrate of emigrants in the world, Jamaican talent poolhas also not been able to contribute to its economy to agreater extent. In 2007, the region’s 35 percent of the laborforce migrated to OECD countries since 1965, accordingto a Canadian International Development Agency (CIDA).A closer look at the study reveals that since the independenceof the region, approximately80 percent of Jamaican have gradsleft the country.Interestingly, the Jamaican governmenthas taken prominent stepsfor the outsourcing community byproviding 100 percent tax holidayon profits in perpetuity for servicecompanies that export 85 percentor more of their ICT services. Moreover,the Government is also identifyingoffice space for potentialinvestors by being in the process ofestablishing a technology park forprospective investors.Chris Nuttall, a member of PAConsulting Group managementteam and sourcing advisory expert concludes that manyU.S. corporations and service providers continue to looktoward Canada, Mexico, the Caribbean and Latin Americaas viable destinations for near and offshore work. He believes,any Jamaica or Caribbean strategy needs to be designedin the context of a wider global shared services andsourcing strategy, and it remains critical for the supplyside service delivery centers to become and remain highlycompetitive (against both in-house service delivery centersand against viable alternative onshore, near shore andoffshore centers) so as to secure and ensure a multiyearstream of increasingly valuable workflow.GSOctober 2009 www. globalservicesmedia.com <strong>Global</strong>Services 41