Primary Color Palette R: 255 G: 255 B: 255 R: 0 G: 0 B: 0 R: 0 G: 114 B: 200 R: 0 G: 0 B: 0 R: 185 G: 188 B: 253 R: 138 G: 138 B: 102 R: 0 G: 153 B: 153.

Near Shore Destination

Costa Rica

The P&G Story

March 2011

Atul VashisthaChairman

Neo Group

BestOutsourcingJobs

www.neogroup.com

© 2011 Neo GroupAll rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited

Presenters

Alfonso Cos• Former Global VP, Shared Services, P&G

Atul Vashistha• Chairman & CEO, Neo Group

Pilar Madrigal• Director of International Affairs, CINDE

2


Content

The P&G ExperienceDestination Costa RicaCINDE

Q&APresentation available later on

• Cinde.org• neogroup.com

3


Outsourcing Location Trends

Leveraging Unique Capabilities

• Competitive Advantage of Nations

Geographic Risk Diversification

• Global Delivery Model

Captive Centers (BPO)

• Multi-functional centers

4


Nearshore Trends

The Americas Opportunity

5

Proximity Time Zone Affinity Skill-sets


Country Assessment Framework

6

Co

un

try

Ass

essm

ent

Human Resources AttractivenessScalability risk

Number of industry employees

Attrition – Overall and client

Financial AttractivenessSalary Level (ITO, BPO, KPO) for entry level

Salary growth (ITO, BPO, KPO) for entry level

Rent (Grade 1 CBD)

Rent growth

Cost of living increase

Geopolitical AttractivenessPolitical risk

Crime rate

Terrorism/Ethnic tension/Social unrest

Natural disaster risk

Infrastructure Attractiveness

Government support/Incentive

FDI attractiveness

Power supply

Transportation

Software parks/SEZ’s

Business Environment AttractivenessEase of doing business

Cultural compatibility/Support facilities for expats

Quality of life

Access to healthcare

Pollution levels

Quality of education

Business and support amenities/5 star rooms

Industry AttractivenessIndustry size ITO

Industry size BPO

Industry size KPO

Projected industry growth ITO

Projected industry growth BPO

Mature Service Providers

Macro Economic AttractivenessMacro Economic indicators

Currency attractiveness


Why Costa Rica?

• Ranked 3rd in the world on “Environmental Performance Index”

7

Multi-Functional Centers, Large

call center capacity

Good Infrastructure

Cultural Compatibility

for Expats

Low geopolitical, business ,

macroeconomic & environment

risk

Costa Rica

Workforce quality Multilingual

Water Supply Power Supply

Housing Schools


Macro Economic Attractiveness

8

• Stable democratic country since 1948• Typically a low fluctuating currency.• No army since 1948, instead a big investment in education and

environment• The GDP contribution from the services remains very high for

Costa Rica pegged at 68% for 2009.• Costa Rica has a low trade deficit of 2%

Parameters Attractiveness

Macro – economic indicator

Currency risk

Very Low Low Medium High Very High

i

Source: Neo Group


Geopolitical Attractiveness

9

• The last World Bank Survey for Global Governance Indicators ranks Costa Rica in the first place within Latin America for political stability.

• The country has had no terror attacks, social unrests/strikes and is the greenest country in the world.

• Costa Rica has low trade deficit and low payment risk which is the best among the Latin American countries.


Political risk

Crime rate

Terrorism/Ethnic flare-up

Natural disaster risk

Even more stable than the U.S.A.

i

Source: EIU


Infrastructure Attractiveness

10

• Very good government support, good power supply, good transportation and with a good support from the Foreign Direct Investments (FDI’s).

• Internet services are the most readily available and sophisticated in Central America. • Extensive highway system, two major international airports and two seaports. All major U.S., European,

and Latin American passenger and cargo carriers• The government fosters growth with incentives, which finds favor with the FDI’s and increases the private

participation.• The power supply situation is one of the best in the world with renewable sources of energy being used

wherever possible and Costa Rica has a surplus of Power which it exports to the other Latin American power deprived countries.

• Abundant water supply, reliable hydroelectric power and an advanced telecommunications system.


i


Government support

FDI attractiveness

Power supply

Transportation

Software parks/SEZ’s



Attrition – Overall

# of offshore/outsourcing Services Sector employees

~32,000

Scalability Attractiveness

Human Resources Attractiveness

11

• Attrition in the offshore/outsourcing Services Sector is lower than Asian locations• Costa Rica offers a good human resource pool in the Latin American region, especially with

the bilingual skills (English, Portuguese, Spanish, etc.) and good educational background (6% of GDP is allocated for education).

• According to the fdimagazine, Costa Rica has the best in the category of availability and quality of human resources, with scores higher than major competitors like the Dominican Republic, Panama and Puerto Rico.

• Costa Rica has one of the highest literacy rates (95.9%) of the American Continent. Education is mandatory until the 9th grade.

• Around 35.6% of the total population are between 15 – 35 years (annual growth rate of 2.1%).


i


An Attractive Location: San José

12

• Ranked 3rd in the world on “Environmental Performance Index”.• The city has well-educated, creative, innovative, English-speaking and highly productive

human resource. San Jose has technical and superior education institutions that generate qualified human resource, such as: Technical high-schools, Private and public universities, National Learning Institute, CEFOF, CENFOTEC.

• 50% of the elementary schools and all high-schools have computer labs and receive English lessons. This allows children and teenagers to learn the language and computer skills at a very early age.

• Great location for expatriates. Ranks first in the Happy Planet Index.• 62% of the employable workforce lives in the greater metropolitan area where San Jose is

located.

i

© 2011 Neo GroupAll rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited13

Costa Rica: SWOT Analysis

13

Excellent human resources Quality education Good business and support amenities Conducive environment for doing business No limitations on capital funds transfers associated

with an investment, regardless of the currency. CINDE – Great support resources Cultural compatibility for expats Stable/pleasant climatic conditions Access to good health care

Salary levels for the ITO and BPO employees are higher than other developing locations.

Costa Rica has a local software supportive business park formed mainly by highly productive PYMES (SMEs - small and medium sized enterprises). But not enough software firms or human resources.

Smaller local ITO companies

Multi-functional capabilities for BPO, such as the case of Align, P&G and Experian.

Deep call center experience, ie: Sykes, Aegis and KPO such as Amba Research and WNS

Leverage same time zone coverage for USA and Costa Rica, which has a long daytime working shift (5 am to 7 pm)

Leverage bi-lingual, with one of the highest gross participation of population in labor pool (50%)

Leverage neutral accent Close proximity to other larger centers such as Sao

Paolo

Smaller labor pool Rising cost of labor (average less 3%/yr in US$) Not enough resources in a specific area of expertise

or too high recruiting parameters Payroll fringes (social security, pension plan, etc.)

account for a fixed percentage of the employees salary – 34.5%

Strengths Weaknesses

Opportunities Threats

© 2011 Neo GroupAll rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited14

Recommendations

14

• The population of the country is about 4.5 million people and the Services Sector employment is around 32,000, which is 1.4% of the labor pool. This makes it an ideal location for smaller centers (<1000), though it can support larger call centers.

• English and Spanish language based processing of work can happen real time in Costa Rica, whose time lines exactly match with U.S MDT timings.

• Government support can be leveraged to acquire tax benefits/concessions as the Costa Rican government is promoting the offshore/outsourcing industry with CINDE and Procomer serving as strong support organizations.

• Strong focus on education and good universities makes it an ideal center for higher end multi-functional operations.

• Ideal place for companies with a large carbon foot print to start operations as Costa Rica is the greenest country in the world and carbon foot prints can be acquired with ease.


Q&A

[email protected]

[email protected]

15

mailto:[email protected]

mailto:[email protected]


Neo Group Global Headquarters

4000 Pimlico Drive, 114-108

Pleasanton, CA 94588.

Contact Information

Atul VashisthaChairman

[email protected]

Asia-Pacific Headquarters

No. 16 & 16/1 5th Floor

Phoenix Towers, Museum Road

Bangalore 560025, India.

Amsterdam, Netherlands

Sao Paolo, Brazil

Monterrey, Mexico

Bogota, Colombiawww.neogroup.com

http://www.neogroup.com/

Primary Color Palette R: 255 G: 255 B: 255 R: 0 G: 0 B: 0 R: 0 G: 114 B: 200 R: 0 G: 0 B: 0 R: 185 G: 188 B: 253 R: 138 G: 138 B: 102 R: 0 G: 153 B: 153.

Documents

primary color palette

secondary color palette

prior written consent

shore destination costa

pg atul vashistha chairman

pg story

global vp

nearshore trends