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Don Berryman Jan 20th, 2021

Nearshoring Will Be The Key To CX Resilience In 2021

It feels a little like nearshoring hasn’t been mentioned much recently in the business journals. The Covid pandemic and the immediate need to create a work-at-home response has captured the attention of the business journalists over the past year, but nearshoring has not fallen off the radar, it’s just had less attention from the business journalists and industry analysts - and that’s understandable given the scale of the crisis in 2020.

However, as we progress into 2021 this appears to be changing. Ryan Strategic Advisory in Canada is in the process of publishing a major series of analysis on hidden gems that are off the traditional nearshoring and offshoring track. In a September 2020 report, Peter Ryan identified Mexico, Colombia, and Central America as key locations that deserve more attention from companies in the US.

Mexico has had a long and close relationship with the US thanks to the Nafta agreement and its replacement, the USMCA. This has led to the development of manufacturing industries in addition to services, but it is clear that in the Central and South America region, Colombia is the rising star.

Speaking recently to the UK’s Financial Times, Kirk Laughlin, founder and managing director of Nearshore Americas, a news journal and consultancy in the technology services industry, said: “Colombia has been the perennial superstar in our market in the last three to four years.” Mr Laughlin cites the country’s close alliance with the US, the strong work ethic of its population and a supportive government as key advantages.

In the same FT article, Colombia’s Trade and industry minister José Manuel Restrepo declared his confidence that Colombia can compete with Mexico. “This is a country which from the start of this government has declared itself . . . in favor of the private sector and pro-business.”

Colombia has recently seen major investment in the service sector, such as customer service processes. The government clearly has plans for development in several industries, but the customer service specialists are already there - brands like Amazon have chosen Colombia to be their nearshore hub and Transcom recently opened our own facility in Bogotá. We really believe that Colombia will be at the heart of American nearshoring in the 2020s.

As I mentioned at the start of this article, the unusual focus on work-at-home-agents changed how we talked about customer service strategies in 2020. With so much attention on fire-fighting and survival there was not much attention on any other topics or ideas - including nearshoring.

I believe that this is about to change though and one of the key reasons is the post-pandemic need to focus on business resilience. Nobody will want to see the disruption of 2020 repeated ever again, so smart customer service leaders will need to be thinking along these lines:

  1. W@H: how do I build flexibility into my customer service operation so we can use the contact center, but team members can also work at home when needed? This should increase the agility of the team to adapt to unusual circumstances - like lockdowns - but will also create a more flexible working environment.
  2. Self-service and automation: customer expectations are increasing and behavior is changing. Customers often ask their Alexa device or smartphone for help before calling a customer service number so we need smarter ways to integrate these requests for help into the customer journey using intelligent automation to help where possible.
  3. Geographies: it just makes sense to not place all your eggs in one basket - 2020 was a tough lesson for many corporate leaders. If your entire customer service operation was based in a location with strict lockdowns then it would have been very difficult to keep on answering those calls. Thinking about nearshoring as a resilience strategy will be a popular idea in 2021.

Nearshoring is making a comeback after a quiet 2020 where the focus was mainly on survival. The vaccine rollout is underway so although the pandemic is not quite in the past, we can see light at the end of the tunnel and this means that you need to start planning now for the customer service strategy you want to build in a post-pandemic world.

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