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Market Report: December 2013 Preview Deck
Topic: Finance & Accounting in Latin America (LATAM)
Copyright 2013, Everest Global, Inc.
EGR-2013-2-PD-1009
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Copyright 2013, Everest Global, Inc.
EGR-2013-2-PD-1009
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Copyright 2013, Everest Global, Inc.
EGR-2013-2-PD-1009
Bac k gr ound and sc ope of t he r esear c h
Background of the research
Latin America (LATAM) is witnessing growing interest as a delivery destination for BPO global services, especially
Finance and Accounting Outsourcing (FAO). With its sizable graduate pool, low cost of operations, language
advantage, and time-zone proximity with the United States, LATAM offers an attractive value proposition for
organizations looking for destinations for nearshore/offshore FAO services, especially to the U.S.. Latin America
accounted for about 9% share of the BPO global services industry in 2012. Within BPO services, almost half of the
market is dominated by FAO and the market continues to grow.


In this research, we analyze Latin America as a destination for delivery of nearshore/offshore FAO services for
global service providers and buyers, across various dimensions:
Market characteristics
Labor pool across entry and employed talent
Operating cost
Risk assessment
Implications for stakeholders


The scope of the analysis includes:
Nearshore/offshore Finance and Accounting (F&A) services in English language
Includes services sectors across Global In-house Centers (GICs) and third-party service providers
Analysis on key cities in Latin America: Bogota, Buenos Aires, Guadalajara, Montevideo, Panama City, San J ose,
Santiago, and Sao Paulo
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Copyright 2013, Everest Global, Inc.
EGR-2013-2-PD-1009
Tabl e of c ont ent s (page 1 of 2)
Background and methodology 5

Executive summary 7
Summary of key messages 7
Implications for key stakeholders 9

Section I: Market overview 11
Key messages 12
Market size and growth 13
Players landscape 15
Key delivery locations 17

Section II: Assessment of talent pool 18
Key messages 19
Talent pool 20
Attrition rates and competitive intensity 22
Availability of niche skills 23

Section III: Assessment of operating costs 25
Key messages 26
Operating costs 29
Wage inflation 30
Forward-looking view on costs and sustainability of arbitrage 33
Topic Page no.
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Copyright 2013, Everest Global, Inc.
EGR-2013-2-PD-1009
Tabl e of c ont ent s (page 2 of 2)
Section IV: Assessment of risk 34
Key messages 35
Labor pool risk 38
Operating environment risk 39
Relative attractiveness of cities and associated trade-offs 42

Appendix 43
Glossary of key terms 44
GS research calendar 45
References 46
Topic Page no.
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Copyright 2013, Everest Global, Inc.
EGR-2013-2-PD-1009
This report examines the English-delivery market for FAO services from the LATAM region. It focuses on market
characteristics, labor pool analysis across entry and employed talent, operating cost, and risk assessment across eight
LATAM locations including Bogota, Buenos Aires, Guadalajara, Montevideo, Panama City, San J ose, Santiago, and
Sao Paulo.
Over vi ew and abbr evi at ed summar y of k ey messages

Talent
assessment
Leading locations, such as Bogota, Buenos Aires, Guadalajara, and Sao Paulo, offer sizable
entry-level graduate pool with English language skills
Some locations in LATAM offer bi-lingual (Spanish +English) pool across entry and
experienced level
Some of the findings in this report, among others, are:
Market
overview
LATAM BPO market is large accounts for ~9% of the BPO global services market
FAO accounts for almost half of the LATAM offshore/nearshore BPO market
The FAO market in LATAM is driven by GICs and global service providers with local/regional
players having limited presence (except in Brazil and Argentina)
Cost
assessment
Annual operating cost for F&A varies significantly among locations in LATAM, with Sao Paulo
being the costliest
Most low-cost LATAM locations offer significant cost arbitrage (45-70%) over the United States,
and that is likely to continue over the next five years
Risk
assessment
Bogota, Guadalajara, and San J ose are relatively low-risk locations in LATAM
Some concerns on scalability due to small talent pool, especially in Montevideo and
Panama City
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Copyright 2013, Everest Global, Inc.
EGR-2013-2-PD-1009
Thi s r epor t assesses k ey aspec t s of FAO gl obal ser vi c es i n
Lat i n Amer i c a
Overview of global services in FAO in Latin America Assessment of cities
Assessment of operating environment Relative attractiveness of cities and associated trade-offs
Cost-risk trade-offs
Low
High
High Low Risk

C
o
s
t

City 1
City 4
City 7
City 2
City 5
City 6
City 8
City 3
Guadalajara
Santiago
San J ose
Buenos Aires
Montevideo
Panama City
Bogota
Sao Pauolo
Maturity level Locations
Established Bogota
Buenos Aires
Guadalajara
Montevideo
Panama City
San J ose
Santiago
Sao Paulo
Emerging Caracas
Georgetown
Lima
Monterrey
Medellin
Nascent Belize City
Cordoba
Rosario
Tegucigalpa
Willemstad
Labor pool risk
Risk
Entry-level pool
Experienced pool
Operating
environment risk
Competitive intensity
Infrastructure availability
Safety and security
Business
environment risk
Macro-economic
Regulations and ease of
doing business
Geo-political
Government support
Employable entry-level labor pool for F&A
Experienced pool employed in F&A across leading
service providers and GICs
Evidence of scale achieved for F&A
Number and nature of competition
Attrition rates for F&A services
Network readiness, power supply infrastructure,
transportation infrastructure, and international air
connectivity
A
B
C
Security, crime and violence, and threat of natural disasters
GDP growth, currency trends, inflation, and credit rating
IP protection, ease of doing business, legal and regulatory
policy, tax policy, and corruption perception
Political stability
Business incentives provided by the government
India
Philippines
Canada
LATAM
CEE
Ireland
China
Others
Finance &
accounting
outsourcing
Others

Distribution by global service
offerings in LATAM
2012; US$ billion
Country-wise distribution of BPO
global services market
2012; US$ billion
100% = 100% =
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Copyright 2013, Everest Global, Inc.
EGR-2013-2-PD-1009
LI r esear c h c al endar
Topic Release date
Published Current
November-2013 Next-wave Location Profile Guatemala
November-2013 Next-wave Location Profile Cebu, Philippines
Q1-2014 "Next-wave" location profiles 3: Bulgaria
Q1-2014 Global Locations Annual Report
Q1-2014 Emerging Locations Trends report 1: Delivery of IT services from the U.S.
Q1-2014 "Next-wave" location profiles Latvia
Q1-2014 "Next-wave" location profiles Peru
Q2-2014 Function Focus 1: Tier-2/3 locations in India for IT ADM delivery
Q2-2014 Emerging Locations Trends report 2: Emerging opportunities in tier-2/3 cities in the Philippines
Q2-2014 "Next-wave" location profiles Kenya
Q2-2014 "Next-wave" location profiles Sri Lanka
December-2013 Finance & Accounting in Latin America (LATAM)
9
Copyright 2013, Everest Global, Inc.
EGR-2013-2-PD-1009
Addi t i onal r esear c h r ef er enc es
The following documents are recommended for additional insight on the topic covered in this report. The recommended
documents either provide additional details on the topic, or complementary content, that may be of interest:

1. Next-wave Location Profile Cebu, Philippines (EGR-2013-2-LP-0999); 2013. Everest Groups Next Wave Location Profiles provide
crisp, yet insightful assessment of emerging / next-wave countries or cities for services delivery. This report on Cebu offers
perspectives on global sourcing profile of Cebu, key opportunities, drivers, and challenges, along with an overview of talent availability,
operating costs, and environment risks.

2. Next-wave Location Profile Guatemala (EGR-2013-2-LP-0998); 2013. Everest Groups Next Wave Location Profiles provide crisp,
yet insightful assessment of emerging / next-wave countries or cities for services delivery. This report on Guatemala offers perspectives
on global sourcing profile of Guatemala, key opportunities, drivers, and challenges, along with an overview of talent availability, operating
costs, and environment risks.

3. Global Location Insights: November 2013 Baltic States Scandinavian Backyard or Emerging Opportunities to Service
Western Europe (EGR-2013-8-R-0996); 2013. This report evaluates the current global service delivery landscape and suitability of
Baltic States for supporting Western Europe and other regions for IT and BP services. Additionally, it offers perspectives on the drivers
and challenges for the global services industry in the Baltic States and their future outlook as global delivery locations.
For more information on this and other researches published by Everest Group, please contact us:

Aditya Verma, Senior Analyst Global Sourcing
Manu Mehndiratta, Analyst Global Sourcing:
[email protected]
[email protected]
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