INVESTMENT IN SOFTWARE AND IT SERVICES SECTOR
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1 Liberta y Orden INVESTMENT IN SOFTWARE AND IT SERVICES SECTOR
2 OPPORTUNITIES IN THE LOCAL INDUSTRY The financial sector has been one of the most dynamic sectors in mobile internet demand, based on a mass bancarization dynamic sought by the government to offer everyone the possibility to manage their finances using mobile devices. This trend has created many opportunities for the provision of back office and call center services in the country. Colombian energy generation, transport and distribution companies, significant growth, and current regional expansion processes, increasingly demand more BPO and IT services Due to the sustained expansion of the health sector and the growing demand of the population (47 million inhabitants), this sector requires increasing support in mobile telecommunication services for remote monitoring of patients (Telemedicine) and information consolidation (Data Entry). The Oil & Gas sectors demand more services related to mobile telecommunications as well as control and drilling, extraction, and oil transport processes for their daily activities increase. Qualified human capital availability, its strategic and competitive geographical location with easy access to world markets, and location in the center of 5 time zones, sharing time zone with important business centers, have allowed Colombia to become a distribution regional hub for outsourcing, software, and IT services. The National Government is currently carrying out an ambitious plan, more than COP $90 trillion over the next years, for the development of road, port, railway, and airport infrastructure in the country, that will require accounting, finance, and logistics support services to control projects operation.
3 Colombia A market in Constant Development IT Market in Colombia 2011 Market Share per Technology Market % Sales Hardware IT Services Market in Colombia 2011 Share per IT Service % of Sales Software Consulting 11% 30% 58% Services 41% 11% 26% Deployment and support Education and entertainment Integration and development 20% Outsourcing Source: IDC, In 2011 IT spending in Colombia added up to USD 6,119 million: Hardware USD 3,568 (58%), IT services USD 1,851 (30%), and software USD 698 (11%). Households and communications & media industries, financial and government sectors, represent more than 50% of total IT spending in the country. IDC, The IT market has grown more than 26% in the last 5 years. Between 2010 and 2011, sales showed a significant increase of approximately 44%. IDC, IT Services remain as the second technology market, keeping over 30% of market share. In , sales increased more than 16%. ITO, deployment and support services represent more than 65% of the total IT services market. IDC, ITO: Industry s sustained growth in its different verticals is driving an increasing high demand for IT services. Verticals: Colombia offers a wide range of sectors that demand a high number of outsourced services: Companies investing in the country and local businesses mean potential demand for these services.
4 A GROWING MARKET WITH HIGH CAPACITY OF SKILLED LABOR After Mexico, Colombia with 47.1 million inhabitants is the second largest Spanishspeaking country in the world. It has multiple areas of development: nine metropolitan areas with population over 500,000 inhabitants. DANE, Colombia is the 28th largest economy in the world and one of the largest Non-OECD economies. The country has the second fastest growing labor force in the region. IMD, Colombia is the third Latin American country with the highest number of graduates in the areas of Business and. Euromonitor, Each year more than 200,000 people graduate from higher education in Colombia: 55% undergraduate and 30% in masters and specialization degrees. Observatorio Laboral - Ministry of National Education, Infrastructure and Privileged Location Prime strategic location: Located in the heartland of the main commercial and financial centers in the hemisphere, it shares cultural affinity patterns, suitable to consolidate operations in the region. Infrastructure capable of support world-class operations: 5 submarine cables (three in process) supplemented by an internal optical fiber ring that will connect 1,078 municipalities in MinTIC, (Ministry of Information and Communications Technologies), ,100 4,964 Number of graduates in engineering fields 2011 Source: Observatorio Laboral Ministry of Education, ,849 1,270 1,037 Systems Electronic Telematic Electric Telecomunication
5 Innovation and New Markets Open Up There is a worldwide trend that seeks to develop new processes to enter emerging markets, where the idea is to locate innovation centers to suit the requirements of target markets. In line with this trend, the National Government encourages the establishment of innovation centers in the country. Continuous strengthening of commercial relations between Colombia and the world, opening a window of opportunities for investment in all business outsourcing services. The Government s Commitment to the Sector The Government is committed to support and provide aid through the Productive Transformation Program PTP a strategy aimed at promoting sector growth; in recent years the program has created a favorable environment to consolidate sector worldwide recognition. Program efforts develop throughout four main themes: Human Capital and Regulatory Framework, Consolidation, Promotion and Sector Innovation and Infrastructure and Sustainability. Attractive Regulatory Framework Available tools to enable operations in areas such as services exports (Plan Vallejo), intellectual property rights, Statutory Law of Habeas Data, Value Added Tax ( VAT ) exemption for services provided from Colombia, income tax exemption for software developed in the country, possibility of applying to the free trade zones regime, First Job Law, and opportunities to benefit from Telework. MAYA - 1 PAN-AM Telecommunications Infrastructure Submarine Cables CFX - 1 SAM - 1 GLOBENET AMX - 1 PCCS Vive Digital Government plan aimed at generating economic growth based on the use and appropriation of ICT in Colombia and the development of a national digital ecosystem. The Presidency of the Republic and the MinTIC (Ministry of Information Technologies and Communications) lead the plan. In terms of connectivity, by 2014, it is expected to have 1,078 municipalities online out of 1,100 in the country. IN PROCESS Source: MinTIC, 2011.
6 COLOMBIA, A COUNTRY WITH MULTIPLE AREAS OF DEVELOPMENT Bogota Outsourcing: IT Services: Infrastructure Network & Desktop Application Management Hosted Application Management Hosted Infrastructure Business: Business Outsourcing Services IT Support and Training: Support: Hardware and Software Implementation & Support Training and Education Medellin Outsourcing: IT Services: Infrastructure Network & Desktop Application Management Hosted Application Management Hosted Infrastructure Business: Business Outsourcing Services IT Support and Training: Support: Hardware and Software Implementation & Support Training and Education Digital Animation Mobile App Development Cali, Barranquilla, and Bucaramanga Outsourcing: IT Services: Network & Desktop Application Management and Support IT Support and Training: Support: Hardware and Software Implementation & Support Training and Education Coffee Triangle Outsourcing: IT Services: Network & Desktop Application Management and Support IT Support and Training: Support: Hardware and Software Implementation & Support Training and Education
7 MAJOR FOREIGN COMPANIES WHICH HAVE CHOSEN COLOMBIA AS AN INVESTMENT DESTINATION Colombia is a key country in our regional expansion strategy; it s a country experiencing strong growth that has a very capable workforce and a very competitive cost structure. For that reason we decided to open offices here. Peter Kroll, Senior Vice president, Capgemini North Latin America. Globant, Argentina: This software, IT services, and maintenance outsourcing transnational corporation established a software development center in Bogota aimed at the international market. Indra, Spain: This consulting services and technological solutions company opened its second software laboratory in the country in Pereira in order to meet both domestic and international demands. Synapsis, Chile:This company purchased the Colombian operations of Latin American broadband and IT services provider Diveo (investment: USD 35 million). Capgemini, France: This IT company opened a branch in Bogota to serve local and regional clients, establishing its regional headquarters in Colombia. (Jobs created: 400). Stefanini, Brazil: This Brazilian IT solutions firm purchased Colombian IT development company Informatica & Tecnologia, consolidating its presence in Latin America.
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