More and more companies are continuing to embrace the “nearshore.” With the cost and capabilities gap continuing to close between service providers in far-off places like India and the Philippines, many North American companies are realizing that the benefits of proximity, time zones, and cultural affinity make Latin America and the Caribbean the place to be.
ibex, a Washington-based business process outsourcing (BPO) and contact center firm, recently made a big investment in the Caribbean, placing its regional headquarters in Kingston, Jamaica.
The modern, 10-floor space, located within the building of mobile provider Digicel, adds to the large presence the company already has in Portmore and will give the company the ability to employ more than 3,000 workers across its Jamaican operations. Eventually, the company says it wants to push that number above 5,000 in the country.
To learn more about why ibex is bullish on the Caribbean and what sets its operations apart, Loren Moss of Finance TnT recently sat down to talk with Bob Dechant, CEO of ibex Interactive.
In addition to discussing the benefits of the Caribbean services world, Dechant discusses the company’s new CLX (customer lifecycle experience) approach, how technology is changing BPO, and the impact that this industry can have across the world.
Loren Moss: We are here in Kingston, Jamaica, in your new headquarters for the Caribbean and Central America. Why Kingston? Why Jamaica? Why the Caribbean?
Bob Dechant: So that’s a great question, and here’s how I think about the Caribbean — putting this in the context of the Philippines. The Philippines market has gone through just explosive growth over the years. There are about 1.2 million call center jobs over there. But our clients continuously look at alternatives to the Philippines to “de-risk” any business for a variety of reasons.
There’s no one market in the Caribbean that will be the only alternative to the Philippines. So what I think about Latin America and the Caribbean, I look at these as almost a fanning out of opportunities, geographies, and locations where we can map out the long term with a variety of geographies that we almost quilt together. Together, they provide high volume alternatives to the Philippines.
“There’s no one market in the Caribbean that will be the only alternative to the Philippines. So what I think about Latin America and the Caribbean, I look at these as almost a fanning out of opportunities, geographies and locations … Together, they provide high volume alternatives to the Philippines.” – Bob Dechant, CEO of ibex Interactive
So, for us Jamaica is the anchor of that. Today, it is 2,500 agents with great leadership and with great talent. But if I fast forward four or five years from now, I’m hoping and expecting that our business is going to be in many, many countries — many countries that might not even be BPO-enabled today. The proximity of these markets and the cultural affinity back to the U.S. is just off the charts.
So, making Jamaica the anchor helps us look at the Caribbean as kind of a entire ecosystem with multiple markets that weave together into a great solution that can complement the Philippines — on a broad scale, not a single market scale.
Loren Moss: There seems to be a trend North American-based business moving back closer to home from the Philippines. Are there specific factors that are driving that, such as the Caribbean and the nearshore becoming more competitive? Or there are specific factors happening in those Asian venues that are causing a rearrangement or migration of business?
Bob Dechant: There’s a lot of different factors that are leading towards that. It’s not one. Let me kind of talk through several of the key ones.
Number one, is just pure risk mitigation. Over the years, because the price advantages, our clients have put significant volume into the Philippines. From a risk portfolio standpoint, if a typhoon comes, a significant portion of that could get wiped out for a period of time. So risk mitigation, as it relates to natural disasters, is one of those really, really important areas.
Number two is a that it is imperative to get really tight cultural affinity to the U.S. to do effective customer care. The Caribbean is off the charts in all markets. Even as great as the Philippines is — due to its connection to the U.S. — the Caribbean is even much higher.
The third element, I believe, is travel and flight time. It takes 24 hours to get to the Philippines. It’s typically $6,000 USD airfare. Typically clients go and they stay there. They don’t go one Monday and come back on Friday. So they are staying there several days. So you have the total cost of that and in terms of that disruption on our client’s management — and life. You’re leaving your family for two weeks, traveling for 24 hours, and you are working at night. That’s difficult. Just the fatigue of doing that.
Whereas, if I am in the Northeast United States I can get to Jamaica in three hours. Or I can get to Managua, Nicaragua, in several hours. I can fly on a Monday, work Tuesday, work Wednesday, work a half-day Thursday, and then catch a noon flight and be home that night. It enhances the lifestyle for our clients’ management. That’s really huge.
Loren Moss: And for under $1,000 USD.
Bob Dechant: Right. That’s exactly right — in a $600 USD airfare. And if they want, they can do business for $850 USD. You fly in business class to the Philippines and you are talking $10,000 USD.
Loren Moss: In the 1990s it was India — everything was India. Then the Philippines came out strong. The nearshore is not new, but it’s still newer. How responsive are your clients to the Caribbean?
Bob Dechant: Yeah, that’s another great question, Loren, and on the whole, our clients are very interested in the Caribbean, Latin America, and South America, including markets in Colombia.
“If I fast forward four or five years from now, I’m hoping and expecting that our business is going to be in many, many countries — many countries that might not even be BPO-enabled today. The proximity of these markets and the cultural affinity back to the U.S. is just off the charts.” – Bob Dechant
What’s interesting though, in my opinion, is that there are a lot of varying opinions amongst buyers and prospective clients about the Caribbean markets. One client might look at the demographics in El Salvador and say it’s a fantastic market. With the exact same facts, another client might look at those facts and say, “I’m not going to El Salvador,” for whatever reason. And you see that across every market in the Caribbean. It’s really interesting.
In the Caribbean, each market has an amazing set of strengths, but also has some potential issues or opportunities to improve upon. As buyers look at that, some might hear stories. They might be anecdotes — it might be old tales.
Relative to Jamaica, the number-one issue is most buyers are hearing old stories from 2002 or 2004. We just brought a major client down here in the middle of December. The client had not been here for eight years, and they basically came to us and said: “I can’t believe that I have not been to this market in eight years. It’s off the charts and we had no idea.” And this is a really educated buyer.
It’s our job at ibex is to go and understand clients requirements and help them to get to the right answers and bring them the real stories — not the old tales.
Loren Moss: “My cousin said…”
Bob Dechant: “My cousin said,” right? Or, you know, “I heard this client had an issue.” Or whatever. And that’s really what we’ve been spending most of our time doing.
As you know, I spent a lot of time in the nearshore well before ibex, really understanding the market and its pros and cons. And we felt we could help our clients get the right answers with the right facts.
I do believe that Jamaica is an absolutely high-end market. It has English — native English. That doesn’t mean that the Spanish markets are not great — they absolutely are — but it’s a different value proposition, and here there is a great workforce, and it really helps us quite often in working with our clients for bilingual. English and Spanish — put those together and they will operate very well.
Loren Moss: Jamaica is where you’ve planted your flag as a base. Where else do you want to keep an eye on as places to take a look at when you look at expansion and growth?
Bob Dechant: So we are here in the Digicel building in Jamaica in a partnership with Digicel. They operate in some 20 different Caribbean countries, with more than a dozen different operating centers. With the strategic clients that we’ve structured with our friends here in Digicel, we can go to any one of those markets, similar to what we’ve done here. You can co-locate with us in a lot of markets.
A lot of times BPO companies hold close to their vest where they are thinking, but I’ll just share one market with you. Because whoever goes into there — if it’s us, if it’s others, if it’s us and others — it could just really make big impact in that market. That’s Haiti and, you know, one of the most valuable things about this business is the job creation and how you transform societies. Changes lives. So, what better market than that?
“One of the most valuable things about this business is the job creation and how you transform societies. Changes lives.” – Bob Dechant
And there you have trilingual: You have French, Spanish, and English. And I just think that would be such a win for us in a variety of ways. From a personal level, that makes you feel good in the gut — in the heart. So if other companies look and say, “Well, Bob is looking at Haiti, we’d better go in there” then, hey, that’s great. It just means we are helping transform.
Loren Moss: Looking on what you’ve done here on the ground, and looking of what you’ve done in other stops in your own career, that seems to be a theme throughout. It seems to be very much integrated into what you do. How important is “impact sourcing,” as they say — going in and having a positive impact and making a difference and improving lives as well as making a profit?
Bob Dechant: Improving lives is really, really important, and our agents can tell whether we are really leaning in to the market and the center or not. They really can. They are smart. And I like to think that myself and my management team are leaning in to that — better than any other of our competitors.
When we started Jamaica — and when you start these markets you go through aggressive growth — you always have issues with payrolls, you have issues with agents, and you have issues with utilities, and things like that. Like, you know, we may pay agents incorrectly. We didn’t process a day, for example. You have to think of the impact you have on their life. I got on planes and I came down here and I said, “Guys, this is not acceptable, right? You can’t let this happen.”
You really impact people and you just want to be authentic to your people. That stuff matters to me and I just think that agents are smart and they can tell whether their leadership is committed and or whether they just kind of come in when the bright lights are on and then exit as fast as they can.
Loren Moss: Let’s shift gears a little bit. There’s been an impressive evolution with ibex. You just went through a rebranding or a redefining. It seems that what you have rebuilt is a disruption to traditional outsourcing — something very new. You now have CLX, cloud, data and analytics, and innovative things like machine learning and chatbots. How do you transform from a strong, but a relatively traditional, BPO company into a company that’s now not just a technology company but a solutions provider? How to you bring out these innovative things and present deals when, before, customers saw you as a traditional BPO alternative?
Bob Dechant: I wish I had all the answers on that, very candidly. But what I do believe is that we have a commitment around a technology and pushing machine learning and AI. Those are in the roots and the fabric of this company. Why? Because, that stuff defines outcomes — it defines better outcomes. If you have smart technology that is learning where we should put our ad spend to drive traffic — and that traffic could drive sales — now we are cooking with gas.
Now, you hope you get good outcomes, but you don’t know. So you let this happen, and it gets smarter over time and your ad-spend dollars are going to be better allocated, which allows you to drive better revenue. That’s in the fabric of this company.
“We have a commitment around a technology and pushing machine learning and AI. Those are in the roots and the fabric of this company.” – Bob Dechant
Under this kind of vision, we’ve driven and pushed our companies to be thinking ahead more and more — thinking ahead of machine learning. That’s been in the fabric of this businesses from day one. So, weaving them together? It’s second nature to us. We are committed to technology being key in this company.
Loren Moss: One of the things that impressed me today is that you are not just on the customer support, billing support, and technical support side of equation. But on the marketing and innovation side as well. A lot of customers contact traditional BPOs that have been on the reaction or response side — inbound calls and we’re gonna sit here and wait for the phone to ring.
But you guys seem to be integrating marketing before sales. Or, you have marketing and sales and then post-sales service. And you are able to apply a lot of that technology and knowhow and really creating demand and going out there and finding the customer and capturing the customer — rather than waiting for your corporate customer go out there and generate the demand. I’ve never seen that before.
Bob Dechant: Yeah, you are spot on. You need to have that ability to generate the demand. I’ve been part of this over the years, and degrees of separation in that game are really really narrow. So, what we are doing is exactly what you are saying.
We’re not going in with only all these intangibles. Now, we are going in with a tangible, saying “Let me show you my technology that I have” — tangibles, something you can touch, you can feel and you can see…
Loren Moss: And measure…
Bob Dechant. And measure! And measure! That’s exactly right. And those tangibles now will allow us to drive — not cannibalize — revenue. Because they have their sales capabilities and then we will complement those customers and subscribers. That is power. It’s a really powerful value proposition.
Loren Moss: You now have CLX Signal and that’s something that uses artificial intelligence and machine learning to analyze sentiment. It seems interesting because, on one hand, you have service providers — traditional BPOs and even innovative BPOs out there — doing some interesting things in this area. Then you have the technology companies — or platforms, like Amazon and Google — that can give you a toolkit for artificial intelligence in, say, voice, like Alexa. But I haven’t seen anybody put it all together as a package, coming in with an end-to-end solution. And you guys seem to be applying a particular solution versus being a cool technology.
Bob Dechant: Yeah, you are exactly right, and it goes back to some of these elements about how I view clients. Can you help me grow revenue? Can you help me save costs? Can you tell me something about my customer that I don’t know? The millions of transactions that we do — the millions of transactions that BPO companies do — you know what happens to most of that information? it’s just road killed. Nothing is done with it. Just thrown away.
And so, with some of these capabilities, like CLX Signal, you have the ability to grab that and then harvest that information. Whether it’s phone call or a chat or SMS back and forth, what it does is take the information and bring it back to our clients and say, “We’ve mined this information, and here is what your customers are saying, good, bad or indifferent.” And you tell them that stuff, and that them allows them to solve stuff — to deal with it — and probably to help drive revenue. There’s probably nothing more valuable, right? Even more so than taking cost out of the equation. Because that’s now going to allow you to go feed the revenue engine, right?
Loren Moss: Right. And so ibex has rebranded as ibex, and you’ve loaded these really fascinating companies to now be brands under the CLX umbrella. Can you give me a one-paragraph, concise definition: What is CLX, and what does it mean?
Bob Dechant: CLX is “customer lifecycle experience.” The way I view it is that we are able to start the engagement of a potential customer, bring them to our client, sell them a great solution, and then take a journey with that client and protect the brand for the client.
We enhance the brand and that retains the customer and, over the long haul, that customer spends more over the lifecycle of that relationship. So we transform a potential customer to a high-value, big spend, lifetime customer — to a loyal customer.