Costa Rica: A Shared Service

HUB …. What´s next?

Vanessa Gibson

Corporate Development & Investment Climate

CINDE: Costa Rican Investment Promotion Agency

• Private, non-profit, non-political organization, founded in 1982

• Declared of public interest by the Costa Rican Government in 1984

• Active promotion of foreign investment, local support, and post-

establishment services

• Extensive experience in strategic sectors such as Life Sciences,

Advanced Manufacturing, Services, Clean Technologies-Renewable

Energy, Food Industry, Light Manufacturing and other projects.

• CINDE is the best national Investment Promotion Agency in Latin

America & Caribbean (Site Selection Magazine 2015)

1.

Costa Rica, a country that has evolve as a

Corporate Service Hub

Costa Rica leads value-added service

exports in the Latin American region

Source: CINDE based on data from BCCR, IMF and TRADEMAP , 2016.

6,8%

1,5%

1,5%

1,4%

1,4%

1,1%

1,1%

1,0%

0,9%

0,4%

0,4%

0,3%

0,1%

0,1%

Costa Rica

Honduras

Panama

Nicaragua

Uruguay

Brazil

Argentina

El Salvador

Guatemala

Bolivia

Colombia

Peru

Venezuela

Paraguay

Exports of Telecommunications, computer, information, and other services as % of GDP - 2015

Main indicators

(Data for 2015)Costa Rica Honduras Uruguay Brazil Argentina Colombia Peru

Service exports as a percentage

of total country’s exports44% 24% 27% 15% 20% 17% 16%

Total service exports per capita $1,594 $317 $879 $165 $322 $150 $195

Total non-tourism services

exports per capita$915 $240 $359 $137 $220 $62 $91

From Agriculture to an Industry and

Services-based economy: IT & IT enabled services,

and other business services exports represent 6.2% of the GDP

Source: CINDE based on data from BCCR and PROCOMER, 2015

1,3%

6,2%

9,1%

5,2%

0%

2%

4%

6%

8%

10%

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

IT & IT enabled services and other business services Agriculture

Great Potential

1st High-Tech exporter of industrial products in Latin

America, 5th worldwide

CINDE based on data from the World Development

Indicators 2016, World Bank

1st Country for future FDI in Central America and the

Caribbean

Financial Times: FDI Intelligence, 2015

1st Outsourcing City of Latin America (San Jose)

Top 100 Outsourcing Destinations 2016, Tholons

Top seven City for future FDI in Latin America (San

Jose)

Financial Times: FDI Intelligence, 2015

The top choice among Latin America countries for

establishing a Global Business Services Center

The Hackett Group, 2013

San Jose is the best hub for Life Sciences, Electronics

Manufacturing, Business and Financial Services; and

Information and Technology in Latin America

The World’s Most Competitive Cities 2015, Conway

Costa Rica is among the top 5 Global Best to Invest

countries in Latin America

The Global Best to Invest, Site Selection Magazine

2016.

2.

More than 140 companies has established

successful Corporate Services operations in

Costa Rica. Almost 70 Shared Services &

Back Offices

World-renowned companies

EXPANDING in Costa Rica

Shared Services Back Office

Financial processes

• Accounts Payable/Billing & Billing Adjustments

• Accounts Receivable, Invoicing,& Collections

• Auditing

• Cash Application

• Cost Accounting

• Financial Reports

• Fixed Assets

• General Ledger

• Order-to-Cash

• Purchase-to-Pay

• Record-to-Report

• Revenue Cycle

• Tax Filing and Analysis

• Treasury

Global

Procurement:

• Procurement-

to-Pay

• Bidding

• Purchasing

• Transportation

planning and

execution

• Suppliers

• Inventory

allocation and

management

• Planning

• Forecasting/

Seasonality

• Materials

management

and planning

• Customer order

tracking (credit

hold, order

processing,

claims

Human Resources:

• Ex-pat Relocation & Training

• Payroll

• Regional Recruitment

• Talent Management

• Travel & Entertainment

• Benefits and compensations

Processes Reengineering :

• Business Analysis

• Compliance & Fraud Control

• Research and Data Analysis

• Business Presentation Design

• Portfolio Analysis, Investment Research

• Training

BPO:

• Finance & accounting

• Data center operations

• IT operations (IT helpdesk, IT Security Administration, IT Application Maintenance)

• Network design

• Supply chain

• HRO: Payroll, Benefit and compensation mgmt., retirement assistance and corporate travel

• Facilities services

Financial KPO

Back office support:

• Presentation design, business knowledge analysis, learning services

• Report editing

• Health industry support

• Data Mining/processing

• Logistics processes (auditing freight, international freight payment transactions)

Shared Services & Back Offices processes1. Finance & Accounting

2. Software Develop.

3. HR Services

4. Information Tech.

5. Logistics Services

6. Sales & Marketing

7. Customer Service

8. Help Desk

9. Reengineering

10. R&D / Design & Digital Production

Costa RicaEnd-to-end centers offering

services 24x7x365 in

English, Portuguese,

French, German, Italian,

Spanish, Malay, Japanese,

Dutch, Polish, Czech,

Finnish, Mandarin

North

America

South

America

Africa

AsiaEurope

Global centers of excellence serving the world in more than 10

different languages

3.

An increasing productivity, that allows

companies to grow with the right talent

Increased productivity in the Services sector

Source: Data for companies attracted by CINDE

Industry demographics:

- 49% in 2015 (Shared Services & Back Offices)

- Total headcount 23,480

- Operations scope: 75% North America, 15% Hemispheric, 10% Global operations.

- Top 5 languages: English, Portuguese, French, German and Spanish.

Talented workforce:

- Friendly and stable workforce

- “Do it better” attitude

- In Costa Rica the accounting processes follow the IFRS -The Public Accountants College and the Costa Rican Chamber of Industries offers IFRS actualization programs

- High number of people certified in SAP, PMI, Six-Sigma, Oracle, Cisco Certifications

Source: CINDE, 2015. Data comes from survey conducted in July 2015 by PwC

A g

row

th o

f 29%

sin

ce 2

005

2005

$35K

2014

$45K

Average output per employee

Shared Services & Back Offices demographics

0,00% 10,00% 20,00% 30,00% 40,00% 50,00% 60,00%

Universitygraduate

Universitystudents

Completehighschool

Technicalhighschool

MSc.

Other

SSC & BO associates academic background

4.

Fast pace evolution, from GBS, COE to ……

What´s next?

Low cost labor

Access to highly

Skilled labor pool

Increasingly complex transactions

•Basic data entry

-Application forms

- data conversion

•Transaction

processing

•Document

management

•Customer relations

-Call Centers

(inbound & outbound)

- online customer

service

•Telemarketing

•Collections

• Shared corporate

services

-Finance/accounting

- HR

- Procurement

- IT

- Help desk

- Maintenance

- Infrastructure

- Application

development

•Research services

•Customer analysis

•Portfolio analysis

•Claims processing

•Risk management

- Credit underwrite

•Content development,

engineering and design

•New product design

• Design specs

• Pilot/prototypes

• Testing

• Production deign

and optimization

Source: McKinsey&Company Global Institute. Off shoring: is it a Win-Win Game? 2003

Back officeCustomer

contact

Common

Corporate functions

Knowledge

Services and

decision analysis

Research &

Development

Services- from a site location perspective

Key Trends impacting financial services

Source: Virtusa. Dec. 2015

These trends are driving four key business imperatives

Source: Virtusa. Dec. 2015

SSC next generation of labor pool?

Transactional

Analytical &

Decision process

Source: HFS Research. 2015

High demand knowledge areas:

Information Technology

• Cloud Computing

• Virtualization

• Cybersecurity

• Big Data & Analytics

• Data Science

• Mobile technology

• Artificial Intelligence &

Cognitive Computing

• Storage

• Other: Linux OS, Android OS

• Software Quality Assurance

Business

• Business Intelligence

/Analytics

• Advanced Financial Analysis

• Investment / Capital Markets

• Supply Chain Management

• Financial Modeling

• Taxes

Engineering

• Optics

• Electronic packaging

• Modeling - Design

• Regulatory / Quality

• New materials

• Surface treatments

• Plastic Processing

• Molds Design and Construction

• Molds repair and maintenanceWeb - Digital Design

• User experience

• Content Management

• Leveraging global academic contacts developed through multinational companies.

• Enabling strategic networking between local and foreign institutions.

• Promoting best practices and experiences exchange between the academia and multinational communities.

• Exploring opportunities such as:

– The development of specific complementary curricula

– Visiting professors program

– Course lectures - workshops, etc.

– Faculty sabbaticals relocation initiatives

– Promotion of post-graduate and post-doctorate programs

Objective: To accelerate the transfer of new knowledge and technologies to academic

institutions for the development of a more sophisticated labor pool in Costa Rica.

International Strategic Academic Alliances Program (ISAA)

Costa Rica expects to aligned with the new wave in SS & BO

The strategy – Building our talent capabilities

- To lead and collaborate in the transformation

of the new SSC model

- Revalidate the pertinence and contribution of

the SSC model in the value stream of the

Company

- To strategically position Costa Rica as

“knowledge based” hub

It´s all about our best resource: Talent!!!

Thank you!