CIO Magazine recently (well, March 26th, about a month ago – I just found the article!) published an article on the the Outsourcing Outlook for Latin America, written by guest author Alejandro Camino of Mexican IT outsourcing firm Softtek.
This confirms a lot of what I’ve been hearing directly from the mouths of executives from Nearsoft, Avantica and Alsbridge.
Due to the obvious population size differences between the Latin American region and the country of India, the former will never replace the latter.
Latin America should be considered as playing a complementary—not replacement—role to mitigate what a leading analyst calls “India fatigue.”
This is especially so as it comes to certain advantages Latin America provides:
- Nearshore vs. offshore, especially México. Interestingly the author does not consider Argentina or Brazil as nearshore destinations, citing a 12-hour flight to Santiago taking longer than a flight to Poland. However, there are advantages in time-zone similarities, something not mentioned in the article.
- Talented IT workforces in Brazil, Mexico, Argentina and Chile, especially as regards knowledge of SAP, web 2.0 and Java. The author singles out Argentina especially for this kind of expertise, though what I have seen from executives at the above-mentioned companies, Costa Rica and Mexico are also producing talent in modern technologies such as Java, web 2.0, and mobile apps.
- The resiliency of the region during tough economic times. To those of us who are students of Latin American affairs, and I literally was a student in the department of Latin American Studies at the University of Texas at Austin, the following sentence made me chuckle due to it’s irony:
a colleague in Buenos Aires said their operation would survive the pending financial meltdown, because “facing crisis is like a modus vivendi for us, our status quo.”
Great to see confirmation of Latin America as having ”arrived” on the IT outsourcing scene from such a prestigious source as CIO magazine.
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{ 6 comments… read them below or add one }
I am glad CIO is picking up on this. I can understand why a Mexican firm may not consider Argentina or Brazil nearshore, but the fact remains they are abou 200% more convenient to get to than India.
I think the entire region has unexploited potential. I was wondering if you know how Mexican and other Latin American firms are dealing with swine flu? To be reliable business partners to sizeable companies, disater management and recovery need to be in place. I feel that the Latin locations have really lagged in this space. Would love to hear your thoughts.
Im surprised as well that the authors don't consider Argentina nearshore – a flight from DC or Dallas takes about 9 hours. And about the crisis, last year I moved here and when I talked about the crisis, the general consensus was, "Why is it such a big deal? We have them every 10 years!"
You've got to consider the source – the author of the CIO.com article is from México and works for one of the largest Mexican outsourcers. But you're right, and Argentina provides great service, great prices, and great innovation.
Also Bolivia. TrueSoft is a US-based company with headquarters in Silicon Valley, and development teams in Bolivia. http://www.truesoftinc.com
Latin America has been around for a while now. Not only Mexico is playing an important role in IT outsourcing, nowadays countries like Bolivia and Chile, with lower rates than Mexico, Brazil and Argentina are becoming more attractive to US companies.
I agree, Bolivia, Chile, Argentina, Costa Rica, Colombia. What they need to do now is start putting an emphasis on marketing now, to find out from their customers what their unique value proposition is, what their best target market is, and create new messaging around this in their net new lead generation programs, nurturing programs, referral programs, and social media marketing programs.