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Sector Profile
Contact Centers and Business Process Outsourcing (BPO) have become one of the main strategies for global companies seeking operational cost reduction, as well as for diversifying risk. Nicaragua stands out as an attractive emerging destination since it offers excellent investment opportunities for companies looking to expand their operations in order to increase their global competitiveness.
Over the past years, the Government of Nicaragua has taken measures to foster a favorable business environment to promote the successful development of outsourcing companies in the country. World renowned companies with excellent business practices have decided to invest in Nicaragua in search of talent to complement their regional and global operations; these include Sitel, Stream Global Services and Concentrix.
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Investment Opportunities
Nicaragua stands out as one of the top emerging Business Services Outsourcing (BSO) and Knowledge Process Outsourcing (KPO) markets of the Central American region. These companies provide outbound and inbound services to international clients. There are currently 14 companies providing Contact Center and BPO services, altogether employing around 2,500 young and talented professionals. The companies are located in Managua, where there is a high concentration of university students.
Some of the activities being carried out in Nicaragua are:
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Customer Service
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IT Support
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Telemarketing
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Collections
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Business Intelligence
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Software Development
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Financial Analysis
There is an untapped potential of bilingual labor force and a wide number of graduates either unemployed or underemployed that are ready to be hired by BPO companies. Another benefit that Nicaragua offers is a modern and fully privatized telecommunications system.
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Why Nicaragua?
Nicaragua offers a unique set of competitive advantages for companies in the Contact Center and BPO sector, such as:
Strategic Location
Because Nicaragua is on U.S. Central Standard Time Zone (GMT - 6:00. CST in U.S., Mexico and Central America), it can offer timely services to the United States without losing valuable working hours.
Availability of Young, Vibrant and Talented Labor Force
The Nicaraguan population is very young, nearly as 80 percent is under the age of 39, being 21.7 years the average age.
Our national education system includes quality upper-level education, as well as technical training, to meet the immediate and long-term needs of the labor force. There are 48 universities and over 113 technical institutes.
A survey conducted by PRONicaragua in 2008 revealed that the top three most popular majors are Business Administration, IT & Engineering, and Science and Medicine. In the technical field, through the work of the National Technological Institute (INATEC, for its acronym in Spanish) and affiliated private sector institutions, the most popular technical fields of study are Accounting, Secretarial Courses and Business Administration.
In addition, INCAE, a Harvard-affiliated Business School ranked number one in Latin America, has a campus in Managua and constitutes an important source of professionals with high-level managerial skills.
Proven Availability of English-Speaking Personnel
It is important to mention that there is one US accredited English Language University, three bilingual university programs, and five bilingual secondary schools, and a wide number of English institutes that provide a pool of educated candidates for English-speaking contact centers and BPO companies.
Source: PRONicaragua Survey, 2009
Although Nicaragua's official language is Spanish, English has become very popular. For historical reasons, there is strong cultural affinity with the United States and the country has experienced what has been called the "reverse brain drain" phenomenon, which refers to people who left the country in the past and have returned to Nicaragua with English skills and international business expertise.
According to data provided by the Nicaraguan Ministry of Education in 2007, there are almost 555,532 high school students taking English courses three hours a week at their schools as part of graduation requirements.
In addition to that, according to a survey conducted by PRONicaragua in 2009, there are approximately 14 thousand students enrolled in the different bilingual high schools and universities and there are more than 30 English Institutes across the country.
The following graph shows the increase of bilingual talent in the BPO Sector in Nicaragua:
Source: PRONicaragua Survey, 2009
Labor Environment
Nicaragua provides an excellent labor environment for Contact Center and BPO operations. The labor code allows day, mixed and graveyard shifts (48, 45, and 42 hours per week, respectively).
Modern Telecommunications Infrastructure
Since the late 90's, Nicaragua began a technological transformation that implemented the latest technologies to reinforce its telecommunications infrastructure. The telecommunication sector is fully privatized and is considered to be one of the most modern in Central America. Nicaragua provides high quality, redundant fiber telecommunications connections via three international submarine fiber optic cable systems (ARCOS-1, MAYA-1 and Emergia).
Some of the major players in the telecommunications industry in Nicaragua are: Amnet, BT, Claro, IBW, Ideay, Navega, Telefónica, Yota, among others.
 
The following services are available in Nicaragua:
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Internet: Fractional to full DS3 service provided.
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Voice Network: Analogue and digital land line voice services are provided.
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4G: WiMAX technology through fiber optics and wireless (microwaves) for Internet and mobile phones.
Technology Providers: All mayor technology brands (e.g. Dell, HP, IBM, Cisco, Microsoft, Oracle, Avaya, Nortel) are available through local authorized distributors.
Competitive Cost Structure
Nicaragua's average salary in this sector is the most competitive in the region, providing a great opportunity for operation cost reduction. Also, the private telecommunications market assures high quality services at very competitive prices that vary according to bandwidth requirements.
Generous Tax Incentives
Nicaragua's Free Zone Law has been extended to Contact Center and BPO operations. Under this incentive regime, companies exporting services enjoy a 100 percent tax holiday and full duty exemptions on imports of capital goods. Nicaragua's free zones incentives are regulated by the National Free Zones Commission.
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Testimonials
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Andrew Kokes, VP of Marketing at Sitel stated that Sitel's Nicaragua operation has been one of the "biggest success stories over the last 18 months" for the global BPO and contact center organization. "It's been a phenomenal experience," said Kokes. "What made it a tough place to be in the 80s, has changed dramatically... now everyone has come home and they have come back bilingual, and educated."
Sitel's Investment in Nicaragua "Like Striking Gold"
www.nearshoreamericas.com March 2nd, 2010.
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MOVING UP TO KPO
Marlett´s experience, first as his own customer, and now as a service provider, reflects the evolution of Nicaragua's BPO sector. Since the initial telemarketing and call center offerings, it grew into more sophisticated Knowledge process outsourcing (KPO) services. More often, companies like Patentvest offer US firms the ability to perform knowledge-related and information-related work, with skilled architects, analysts, and other highly trained professional, who provide expertise in the processes and often make many low level business decisions. "We are already doing that with our MDB BPO workers, with salaries of $25K to $30 thousand compared to the 125K that we would pay in the US," he said.
Chris Marlett, the CEO of MDB Capital Investment Group, of Santa Monica, California
"CAFTA opens the door to Nicaragua"
www.nearshoreamericas.com September 15th, 2009.
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Contacts in PRONicaragua
Let us arrange a personalized agenda for your visit to Nicaragua that suits your business needs. We invite you to discover why Nicaragua is The Right Move for Your Business!
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Sector Brochure
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