One Stop Back Office
Panama’s shared services and outsourcing industry is rapidly moving up the value chain to sustain the growth started by the country’s call centers. Economic progress has opened up several new avenues in sectors such as financial services, IT and software development. Panama has benefitted from the recent ‘nearshoring’ trend that has seen many businesses moving westwards from Asia – with the search for higher quality eroding the traditional global offshore dominance of India, the Philippines and China. With cost no longer the prime driver, Panama’s Business Process Outsourcing (BPO) industry offers high-end customer care and sophisticated service in LatAm. With a large pool of English-speaking talent, cost savings of 20 to 30 per cent in comparison to other countries, and a time zone positioning ideal for Europe, America and Asia, it comes as no surprise that more and more companies are looking to Panama for their outsourcing needs.
The Second Coming
Panama’s emergence as an outsourcing location began in the contact-center market and was built upon some of the country’s most fundamental strengths: the fact that English is a second language. Computer hardware and financial services companies were the first to take advantage of the development of the call-center sector in Panama. One example was Panama’s success with Dell global call center for English-language calls with approximately 3,000 employees.
While a number of other international call centers were set up on the country such as NARS, all amounting to 8,500 employees, Panama soon recognized that the future lay in the provision of higher value-added services, and over a relatively short period the country’s outsourcing sector evolved. The growth of Panama’s international business and finance center has encouraged companies to offer their services as independent outsourcers. The country also proves fertile ground for shared services centers that are responsible for the handling of specific functions supporting a group’s global operations in areas such as HR, finance and IT.
The shift to higher-value services has greatly benefitted Panama. Many Panamanian firms now offer so-called Knowledge Process Outsourcing (KPO) functions, in which more skilled professionals can assist in knowledge-based areas of work on behalf of finance, insurance or banking companies. While developing economies have struggled to acquire investments from client nations, Panama has continued to show signs of evolution and maturity. Today the sector employs thousands of people, and Panama is a top nearshoring center for the Americas.
The largest BPO providers in Panama today are US company Dell (computer hardware) and Sitel, an international call and contact-center. Both also source a significant volume of contracts from the local market. Boasting large numbers of accounting firms, including boutique practices and the ‘Big Four’, accountancy is the biggest outsourcing sector. Companies are also offering foreign clients back-office services, such as the processing and recording of invoices and sales transactions, accounts management, and information reporting. In the area of shared services, Panama is differentiating itself from traditional outsourcing locations by viewing shared services as a high performance business, and many entities are now expanding to deliver high-value services, including business analysis and decision support to their parent companies, in areas such as finance and accounting, IT, HR, customer service, procurement, payroll, real estate and marketing.
The Human Element
The country’s close cultural affinity with LatAm countries, combined with its strong work ethic, give it a significant advantage across many sectors. While costs may be higher than in Asia, many European companies that outsource work to Panama comment that it offers better all-round value for money: the workforce is highly educated and wages are reasonable, and employee turnover is relatively low, resulting in reduced training costs and better quality of service. The country also boasts an excellent ICT infrastructure, with large-bandwidth net works providing high capacity international connectivity via 5 submarine fiber-optic cables. The robustness of the IT and telecoms infrastructure, coupled with the good language skills of the Panamanian workforce, as well as an attractive business and living environment, will further drive Panama’s outsourcing and shared services success.
Quality over Quantity
Panama has proved itself to be a dynamic, on-the-ball player in the international services market. Companies face no infrastructure bottlenecks: with its highly qualified, multilingual workforce, advanced telecommunications, favorable business environment and strategic location, the country has the potential to offer measurable added value to operations that choose the country as their preferred location. The task for the future is to continue to increase efficiency and proficiency in order to compete with other destinations and to create broader awareness of what Panama has to offer. As the outsourcing market matures, Panama offers clients an attractive package: industry expertise and insight, as well as analytics and innovation, at a competitive price. If global trends are anything to go by, then the prospects for the country to attract more outsourcing business are certainly encouraging.
If you want to set up a BPO, the BusinessPanama Group together with Pardini & Asociados, a law firm with 35 years of experience assisting foreign clients, can provide you our well-known One Stop Shop services to assist you on all your business needs.
We can help you with:
For more information, please contact us.Read more »
Join to our mailing list to receive our latest news, properties and tips to do Business in PanamaSubscribe in our website
Download our Guide to Doing Business in Panama completely FREEGet it Now!