One aspect of outsourcing site selection that often doesn’t get considered is the reliability of the telecom networks. Most of the time what buyers do is pick a location based on the cheapest wage rates or other factors, and only later figure out their telecom situation. That’s dangerous especially in Latin America, because of the huge variation in how robust each country’s infrastructure is. The telecom situation is Brazil for example will not be the same as what you’ll get in Guatemala. And not all markets have the network redundancy that BPO and ITO companies require.
A few months ago I spoke with Bob Lyons, who formerly managed ICT strategies and operations as CIO at Stream Global Services. I asked him how companies can still create a reliable network in Latin America.
Be sure of redundancy
Network redundancy can be deceptive in Latin America, and many buyers have received rude shocks when their communications go down after a natural disaster or outage. “The problem is that a lot of these countries subcontract out their circuits to the same submarine cable,” says Lyons. “So even if you think you have redundancy, you may be surprised when something goes wrong.” He told me about a personal experience of his some years ago, when an earthquake in the Korean ocean damaged an undersea cable. Suddenly he realized that both his primary and secondary communications had gone down, because all his carriers were subcontracting out to that same cable. In Latin America, many countries have only one undersea cable coming in.
Creating network reliability
Anyone who has worked in Latin America knows that in order to get anything done, you have to build and cultivate local relationships. The same goes for telecom. Buyers are often surprised when they hire a telecom provider, that many of the things they would take for granted in the US cannot be overlooked in Latin America. “You yourself have to do many of the things you normally expect to get from a carrier – architectural design, making sure you understand where the cables are, etc – essentially you’re managing your own FLAs.”
Choosing a telecom provider
Each LatAm country usually only has one main provider of telecom services, although each has a presence in other countries as well. So if you’re looking to set up only in one or two countries, then it’s fine to go with only one of those providers. But “having a single carrier strategy is really not the best option if you’re going into multiple countries,” says Lyons. “You want to be able to leverage all of them, because their capabilities in each country depend on the kind of local relationships they have there. So first find out what the level of carrier investment is in the country you’re going into.”
Lyons also has advice for price negotiation with telecom providers – You have to beyond cost per circuit. “Negotiate what the provider can do for your architecturally, not just in terms of managing local providers but also in variable capacity offerings. You can actually drive your TCO way down.”