SSON Report Webinar Recap - Auxis Webinar
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SSON Report Webinar Recap.pdf
SSON Report Webinar Recap - Auxis Webinar
- 1. Proprietary and Confidential 1 WEBINAR RECAP Latin America’s Shared Services & Outsourcing Industry Revealed: March 5, 2025 12:00 pm ET Insights from the SSON/Auxis Market Report Eric Liebross Sr. Managing Director of Business Transformation Auxis Fabiana Corredor Vice President of Marketing & Growth Auxis Keith Sayewitz Commercial Managing Director Auxis
- 2. Proprietary and Confidential 2 • The growth of LATAM to support North America • Functions & processes being performed • Key value and differentiators that companies are seeing in nearshore compared to Asia • Levels of satisfaction with LATAM vs other regions • Top countries in LATAM for Shared Services & Outsourcing • Real-world nearshore success stories • Cost savings & productivity efficiencies Achieved • Automation & technology adoption • Captive vs Hybrid/Outsourcing Considerations • Main market concerns and challenges • What's Next? Key topics for today:
- 3. Proprietary and Confidential 3 HQ In South Florida and two main Global Delivery Centers in Costa Rica & Colombia About Auxis: Shared Services & Nearshore Pioneers in the Americas • Main delivery hubs in Costa Rica (2010) and Colombia (2021) • Opened our legal entity in Mexico in 2024 and working on expansion. • Supporting hubs in Guatemala and Argentina. 25+ Years Helping Organizations Build Customized GBS Models both Captive & Hybrid from Inception to Ongoing Optimization Transition | Transform | Operate Founded by PepsiCo executives in 1997 after successfully standing up the first international Shared Services for PepsiCo Latin America in the early 1990s. Shared Services Consulting & Digital Transformation Business Process Outsourcing Information Technology Outsourcing
- 4. Proprietary and Confidential 4 Let’s get into it….
- 5. Proprietary and Confidential 5 Who participated in the survey? Conducted by SSON in Q2 2024 150+ GBS Executives across all industries and sizes Where are you located? What best approximates your organization's revenue? 27% 16% 11% 15% 10% 21%
- 6. Proprietary and Confidential 6 69% already leverage LATAM For those not yet in the region, do you have plans to incorporate LATAM as part of your program? GBS sourcing model • Hybrid – 58% • Captive – 38% • Fully outsourced – 4% What is your current GBS location model? 62% actively evaluating or considering LATAM 90% of surveyed organizations already operate in LATAM or plan to open operations in the region
- 7. Proprietary and Confidential 7 Today’s webinar registrants answered the following: 6% 6% 27% 27% 34% In process of opening operations in LATAM Already in LATAM, not planning to grow Evaluating nearshoring Already in LATAM and expanding Just researching at this point What best describes the stage of your nearshoring journey in LATAM? Which functions are you most interested in? 24% 39% 50% 53% 68% Other Customer Service Information Technology Human Resources Finance
- 8. Proprietary and Confidential 8 “Lack of knowledge & awareness” is the main reason why some US companies have still not done any nearshore Despite the growth of the Nearshore market, many companies in the US are still not familiar of the benefits and maturity of LATAM, and tend to have more experience and awareness about India & Phillipines . Why do you think your organization has not yet established operations in LATAM? Lack of knowledge about the region and its capabilities for supporting North America Higher cost compared to Asia or Europe Political & economic environment We’ve been busy focused on growing offshore markets It took us some time but currently evaluating
- 9. Proprietary and Confidential 9 When were your LATAM Shared Services/GBS or Outsourcing Operations established? What is the size of your GBS/Outsourcing operations team in LATAM? GBS in LATAM are being built across all team sizes and 51% have more than 5 years operating
- 10. Proprietary and Confidential 10 LATAM Performs Shared Services on a Greater Scale What processes are you performing from LATAM? Record-to-report is performed by 91% of LATAM shared services, but only 63% of SSOs globally.
- 11. Proprietary and Confidential 11 What best describes your level of satisfaction with your current SSOs/GBS Operations in your region? 87% of organizations are satisfied with their SSOs in Latin America, compared to 68% in North America, 64% in Europe, and 53% in Asia. LATAM SSOs Rank Highest for Satisfaction vs. Other Regions
- 12. Proprietary and Confidential 12 Polling Question #1: The Value of Nearshore What do you see as the biggest value available from a nearshore model? (Select all that apply) Cultural Affinity 30% Same time zone 70% Ability to Support More Complex Activities 40% Quality of Talent 53% Easier Travel 33%
- 13. Proprietary and Confidential 13 The value of LATAM over Asia goes beyond "time zone". It's about the quality of our talent and our innovation mindset 23% 30% 31% 32% 33% 37% 40% 42% 44% 59% 60% 37% 39% 51% 39% 43% 42% 45% 39% 37% 28% 26% 0% 20% 40% 60% 80% 100% English Accent Cultural Affinity Staff Turnover Ease of Travel Access to Spanish Language Political & Economic Stability Infarastructure Reliability Ability to Support Complex Processes… Continous Improvement & Innovation… Quality of Talent Same Time Zone Very Important Important 86% 87% 81% 81% 85% 79% 76% 71% 82% 69% 60% Infrastructure Reliability How do you perceive the added value of LATAM over Asia/Europe to support the Americas?
- 14. Proprietary and Confidential 14 The value of LATAM over Asia goes beyond "time zone". It's about the quality of our talent and our innovation mindset 23% 30% 31% 32% 33% 37% 40% 42% 44% 59% 60% 37% 39% 51% 39% 43% 42% 45% 39% 37% 28% 26% 0% 20% 40% 60% 80% 100% English Accent Cultural Affinity Staff Turnover Ease of Travel Access to Spanish Language Political & Economic Stability Infarastructure Reliability Ability to Support Complex Processes… Continous Improvement & Innovation… Quality of Talent Same Time Zone Very Important Important 86% 87% 81% 81% 85% 79% 76% 71% 82% 69% 60% Infrastructure Reliability How do you perceive the added value of LATAM over Asia/Europe to support the Americas?
- 15. 15 Proprietary and Confidential • After struggling with attracting and retaining talent in their US-based based operations, the company established a large, Asia-based outsourcing operation for areas of Revenue Cycle Management (RCM). • The company quickly recognized the challenges the Asia-based model represented for some aspects of RCM that required extensive communication and collaboration, and more complex, judgement-based work to execute. They specifically sought out a nearshore partner to this type of work. • Initially established an outsourced service center supporting a small range of RCM-related activities, and discovered that the nearshore operation demonstrated increased productivity and performance compared to the Asia-based operations • With the success of the program, the client has chosen to expand its nearshore footprint to include a total of 24 distinct RCM functions and more than 500 FTEs and has expanded the scope to include Human Resources and Customer Service-related functions • Additionally, the company has leveraged Auxis’ Digital Transformation team to support its Intelligent Automation department, to design, develop and test multiple process automation initiatives Ability to Support More Complex Processes: One of the Leading Healthcare Organizations in the United States “The nearshore team’s productivity was the equivalent of 1.4 FTEs in the Asia operation.”
- 16. Proprietary and Confidential 16 What markets are your Shared Services/GBS/Outsourcing Operations in LATAM supporting? 84% of GBS in LATAM Support North America, but other Global Markets are also Being Supported from the Region
- 17. 17 Proprietary and Confidential Restaurant Operations & Compliance • Operator had a legacy global model to support store Ops, Quality & Food Safety standards. • In concert with Auxis we built and launched the first of its kind remote virtual video operations review process. Program runs domestically & internationality • Utilize custom built software to dynamically coordinate & schedule thousands of audits based on customer business rules. • Execute detailed walkthrough of onsite operations across all areas. Program drove 7.5% - 12.5% revenue lift in international locations. Auxis resources became “Coaches & Advisors” across the globe. Information Technology • Company was struggling with the execution of an Asian-based outsourced model for IT Help Desk, POS Support and POS Administration. • Switched services to Auxis LATAM based model. Neutral cost model and even small benefit once factor in increased service-levels. • Detailed support across all stores as well as 4 different POS platforms for support and administration. Service lines have expanded to include NSO Support as well as customer care. Global Complex Support Model One of the Leading Restaurant Companies – 7 Brands. Restaurant holding company with many brands was facing challenges across IT, Operations & Customer Care
- 18. Proprietary and Confidential 18 What best describes the scenario in which you are leveraging or plan to leverage LATAM? Latin America is being leveraged by both first-time outsourcers and established GBS looking to complement Asia
- 19. 19 Proprietary and Confidential • The company has more than 150,000 employees and 1,000 retail outlets across the US • The company had established a large captive center in India to support many of its shared services functions, including IT, Finance & Accounting, Retail Operations and HR • The India operation was working well and was providing strong performance and cost benefits, but the company recognized additional opportunities to evaluate onshore work where time zone proximity and bi-lingual capability were considerations for transforming Human Resources service delivery • After evaluating the nearshore (LatAm) market, the company launched an initial HR pilot focused on HR Operations, Talent Acquisition and Total Rewards, including activities such as HR Help Desk, support in-store hiring needs and compensation operations – Expanded the scope to include components of Compliance, Leaves and Accommodations and Associate Relations having found that employees with US-related experience were available for these activities • In the end, Latin America has become the preferred location for this time zone proximity, communication-centric and bi-lingual preferred activities, complementing the large operation it had already established in India LatAm Complement to an Asia- Based Operation: Large US-Based Retail Organization
- 20. Proprietary and Confidential 20 In which LATAM/Caribbean countries do you have/are you currently evaluating Shared Services/ GBS/Outsourcing Operations? Colombia, Mexico, and Costa Rica Lead LATAM Countries for Shared Services & Outsourcing
- 21. Proprietary and Confidential 21 In how many countries do you currently have SSOs/GBS Operations in LATAM? Are you planning to have operations in only one country in Latin America or in multiple countries? 50% of organizations evaluating Latin America plan to set up operations in two or more countries. Many SSOs Plan to Operate in Multiple LATAM Countries Simultaneously
- 22. 22 Proprietary and Confidential Multi-Location Model: Leading Consumer Audio Device Brand • The company had global operations in North America, Europe and Asia and wanted to establish a global business services (GBS) center for its Finance & Accounting function to consolidate operations and improve its operating cost and productivity • Starting with a phased implementation approach to ensure a stable operation, the company initially transitioned select activities across P2P, O2C and R2R to the Auxis service center in Costa Rica • After starting with a limited AP scope (invoice audit, master data and T&E) within 2 months transitioned the full Global AP function, and established a Procurement Help Desk to help managed the PO process and improve the upstream activities that were impacting AP productivity and performance • Transitioned selected AR activities, including Cash Application, Alternative Payment Refund, Credit Memos, Order Release and Bank Reconciliations • With a migration to SAP and its team struggling to adapt to the new system, the company recognized Auxis’ extensive SAP experience and expanded the program to include global operations for AP and AR, and additional R2R scope • Once the operation stabilized, Auxis and company agreed to transition some of the more transactional activities (invoice processing, help desk, cash application, etc.) to Auxis’ Colombia service center due to the lower cost available in that market, creating a hybrid operation that worked across multiple markets based on the role, experience needed and cost advantages
- 23. Proprietary and Confidential 23 Polling Question #2: Potential Cost Savings What are your cost savings expectations from operating in a nearshore market compared to US labor costs? 25% - 40% 46% Greater than 50% 8% 40% - 50% 38% Less than 25% 8%
- 24. Proprietary and Confidential 24 42% of organizations reported 20+% productivity gains from automation initiatives at their LATAM SSOs. 25%-50%+ 48% of organizations reported labor savings of more than 30% CAPTURE LABOR ARBITRAGE SAVINGS RE-INVEST SAVINGS TO FUND OPTIMIZATION EFFORTS Re-Invest a portion of Labor Savings to fund the investments in technology and innovation Self Fund DIGITAL TRANSFORMATION 15% - 40% The Business Case of Nearshoring to LATAM is significant…
- 25. Proprietary and Confidential 25 LATAM SSOs cite 9% higher levels of adoption across all technologies listed in the survey, when considering the “implementing” plus “piloting” phases. Latin America’s Tech Adoption Keeps Pace with Global Trends – and Often Surpasses Them 2% 7% 18% 13% 24% 22% 24% 24% 13% 18% 16% 20% 30% 29% 25% 33% 20% 20% 16% 24% 7% 11% 20% 13% 0% 10% 20% 30% 40% 50% 60% 70% 80% Generate AI Chatbots/NLP Process Point Solutions Process Mining/Discovery OCR/IDP RPA Analytics Workflow Implementing at scale Implementing Piloting 70% How would you describe the maturity level of technology adoption in your SSO/GBS operation in LATAM? 69% 62% 61% 57% 50% 45% 35%
- 26. Proprietary and Confidential 26 Proprietary and Confidential 26 Ticket Opened • Automated Resolution • RPA/AI • Etc. • Multi-channel support • Resolves issues • Refers users to self-service at end of calls • Captures data for future automations • Escalates to Level 2 Level 0 Self-Service / Knowledge Base Automations Level 1 Employee Or Customer • Employee Opens Chat • AI Assistance • Options for “Human Care” • Analytics Layer – Future Knowledgebase + Automation Future of Care – AI + Automation + Shared Services Level 2 SSC Escalated Support
- 27. Proprietary and Confidential 27 Polling Question #3: Does Size Matter? What is the Estimated One-Time Cost to Set Up a 100 FTE Shared Services Center in Latin America? $500,000 – $1,000,000 52% $1,000,000 - $1,500,000 17% Less than $500,000 26% Greater than $1,500,000 4%
- 28. Proprietary and Confidential 28 Preliminary Cost to Stand Up a 100+ FTE Service Center Directional Breakdown of Start Up Costs* Item Number Metric Comment Seats 100 FTE Includes functional team, admin, IT and mgmt Density 8 Square Meter Number of FTEs per Square Meter Space Needed 1,000 Square Meter Minimum space needed to accommodate FTEs Rent $20-$25 Square Meter Class A Space Build Out Cost $1,500 Square Meter Construction, Wiring, Infrastructure. Furniture, etc. * Based on Auxis experience and knowledge of LatAm markets Projected Cost Facilities Build-Out $1,500,000 One-Time Capitalized Cost IT and Other Equipment $200,000 One-Time Capitalized Cost Advisory and Project Management $50,000 One-Time Capitalized Cost Total One-Time Cost $1,750,000
- 29. Proprietary and Confidential 29 Preliminary Cost to Stand Up a 100+ FTE Service Center * Based on Auxis experience and knowledge of CO and CR markets Item Annual Amount Comment Facilities Build etc. $350,000 Straightline capitalized cost amortized over 5 years Rent $270,000 1,000 square meters @ $22.50 per sm Utilities $50,000 Power, telecom, Internet, etc. IT Support $80,000 Two dedicated FTE to support operation HR Support $120,000 HR Manager, one Admin + one Recruiter Payroll Administration $24,000 100 Employees x $20/Month per FTE Admin Support $36,000 Two Administrative Assistants Facilities Support $30,000 Cleaning, repairs, maintenance, etc. Other $25,000 Supplies, snacks, employee relations, etc. Professional Services $50,000 Legal, tax, project management, other Total $1,037,000 Annual operating cost You would need 40% in Labor Arbitrage to get a Net 30% Cost Savings (100 FTEs) Directional Annualized Cost to Operate (Not Including Payroll)*
- 30. Proprietary and Confidential 30 Are you planning to increase, decrease or maintain your current use of outsourcing? What are key drivers for increasing your use of outsourcing? 52% of GBS plan to increase its use of outsourcing Access to countries in which we don’t currently have operations Reduced HR burden recruiting, retention, training, etc. Access to technology and best practices Lower cost Access to talent Absorb future growth Increased internal focus on core and higher value activities
- 31. Proprietary and Confidential 31 What best describes your organization’s view of outsourcing? Never done it, never will 0% Have done it and plant to continue expanding 53% Still figuring it out 16% Have never done it but considering 26% Have done it but with limited success 5% Polling Question #4: Perspective on Outsourcing
- 32. Proprietary and Confidential 32 Currency Fluctuation & Wage Inflation Lead SSO Concerns 18% 9% 15% 13% 15% 15% 22% 25% 26% 14% 32% 31% 11% 20% 15% 24% 22% 24% 22% 20% 20% 32% 23% 29% 0% 10% 20% 30% 40% 50% 60% 70% Data Security Automation & Analytics Skills Ability to Support Other Languages Availability of English Turnover Investment Needed in Tech & Automation Public Safety Talent Availability Political Environment Maintaining & Improving Service Levels Wage Inflation Currency Fluctuation Very concerned Concerned How concerned are you regarding the following factors in your GBS/Outsourcing operations in LATAM? 60% 55% 46% 46% 45% 44% 39% 37% 37% 30% 29% 29% For GBS outside LATAM, the top two concerns are talent availability (71%) and automation/analytics skills (60%)
- 33. Proprietary and Confidential 33 For companies already in LATAM, how do you see your GBS location growth strategy evolving in LATAM and other regions? The way in which companies plan to grow in LATAM is very diverse, including: - Plans to add more processes for functions already established (70%) - New functions (55%) - New geographies (39%) - More business units (39%) LATAM’s GBS & Outsourcing Industry is Projected to Grow Faster than Other Regions
- 35. Proprietary and Confidential 35 Would you be interested in scheduling a complimentary benchmarking assessment or nearshore opportunity assessment? Interested in both 67% Interested in the benckmarking assessment 33%
- 36. Proprietary and Confidential 36 Download our Nearshore vs. Offshore Report vs OFFSHORE NEARSHORE Navigating the Hidden Hassles of Outsourcing to Asia
- 37. Proprietary and Confidential 37 Thank you for attending! Eric Liebross Sr. Managing Director of Business Transformation Auxis Fabiana Corredor Vice President of Marketing & Growth Auxis Keith Sayewitz Commercial Managing Director Auxis