Argentina, Chile and Brazil Favorite Offshoring Destinations

These countries offer a number of outsourcing advantages.

Over the past several years, there has been tremendous growth in the IT industry. As a result of this technology boom, U.S. companies tapped into talent in countries such as India, Ireland and Israel. The growth that these countries saw had a tremendous impact on their economies and the investment in their people.

With this knowledge, I often found myself asking the question: Why did most of the outsourcing find its way to India? What did India have to offer that was different than Europe or Latin America? The answer was a lower cost of doing business and access to a vast labor pool. I realized that Latin America could offer all of these benefits and more to U.S. businesses based on our location and vast talent, and it was time to take advantage of it.

Today, there are more opportunities than ever in the outsourcing market -- and some of the largest technology companies in the U.S. are turning to Latin America for outsourcing support. U.S. companies in particular have recognized the many benefits of working with Latin American companies, which include:

  • Nearby services: nearshore providers offer a priceless advantage: they are working at the same time as their clients. Being closer and sharing a similar time zone allows U..S executives to travel less, spend more time in their offices and homes and, best of all, avoid 3:00 am calls.
  • Integrated teams: companies in Latin America share the same culture with the U.S., not a minor detail when you take into account that this cultural alignment fosters high level integration between the provider and client teams. The results are faster delivery, high motivation and an unparalleled partnership.
  • Outstanding communications: Most Latin Americans are fluent in English, and there is a nice synergy with the U.S. culture.

Going Technical

Nearshore companies, therefore, are emerging as a better alternative when outsourcing services. In one of its last reports, IDC predicted that global suppliers will keep on turning their attention to emerging regions. They foresee that Latin America IT Spending will reach US$48.6 billion in 2008, showing a 12.9% growth over 2007, one of the fastest growth rates in the world.

Besides the "soft" benefits previously described, Latin American countries also offer some technological advantages. For some years now, countries like Argentina, Brazil and Peru have been increasingly joining the OpenSource trend, improving their skills and thus offering a wider and better portfolio of products to their IT customers. Based on some appealing characteristics, such as reliability, stability, auditability, flexibility, freedom and support, adoption of OpenSource technologies in web centric applications is rapidly increasing. Expertise in OpenSource solutions is a key yet rare skill in network centric environments and is something that companies are now paying careful attention to when looking for an outsourcing partner.

The advantages keep on coming: Argentina, for instance, has a safe legal framework that provides any client with the highest protection for their intellectual property and data records. The EU has even recognized the country with an adequate level of personal data protection. Brazil is also willing to embrace the challenge of becoming a leader in the IT industry, which is why the Brazilian government is incorporating changes in the tax system to multiply investment and revenue.

From a first-hand perspective, I can clearly see all of these benefits reflected in the growth Globant has seen. This Argentinean company, that we founded only five years ago together with three friends, is receiving some of the most complex outsourcing projects from major U.S .companies who come to us mainly by recommendation. With a growth rate of 100% each year, Globant is one clear example of why nearshore companies are getting to the top of the list of global service providers.

As the outsourcing market continues to grow, U.S. customers are discovering the benefits they'll get by bringing their projects to Latin American countries. And it seems that the region is becoming the most logical destination when looking for a partner to understand their needs and to offer the high quality services they expect.

Martin Migoya is CEO of Globant, a provider of Latin American software product development and maintenance outsourcing. Globant is headquartered in Buenos Aires, Argentina with offices in Tandil and La Plata in Argentina, Palo Alto, Phoenix and Boston in the United States, Mexico City and London. For more information, visit www.globant.com

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