Latin America: A Potential ITO Destination
When you are exploring destinations to outsource your IT functions you can examine the strengths of Latin America — beside India and China — as well because the place has got much more than only linguistic skills to offer.
Advisors say, the region has got languages; buyers say, it has got low-cost labor pool; and call centers who are already there say that they provider call-center services in many languages at low cost! But only this is not true.
Ask IT companies who are setting up center in Latin America. They will say that this place has got techies as well! Because these are the ones who are now operating out of Latin America.
Earlier this region had only skilled professionals languages like Spanish and English and low-cost labor pool — the perfect reasons for companies to set up call centers there. But now it’s offering engineers — that too at low prices.
Hmmm…every reason to source IT services from the place.
Buyers, you can consider this place as well becauser this is no more only a destination to outsource BPO functions.
Israel I agree totally on your assesment for Latin America. What is your opinion about South America…
I can’t agree more with you. You see, im latin american and i work now in a think thank specialized in research and advisory of offshoring locations around the world for global companies. Latin America has become in the past years a strong and attractive destination for BPO/ITO services and captive centers (SSC or CC). Why? India and the rest of Asia is lately and slowly turning more expensive, the attrition rates are scary (50% in average) and the cultural and times zones differences are starting to undermine the customer/provider relation. East Europe on the other hand is turning as well more expensive each year and its universities are not producing enough qualified labor hand to supply the incresing demand (plus emigration to west europe). Latin America matches with the big players requirements: is almost virgin land. Part of the Latin american culture is: if you dont get a professional degree you are nobody. Therefore everybody is doing as much as possible to finish a university degree (being engineer is a plus) and you can see that in the unemployment rates for graduates (45% unemployment rate for graduates from higher education in Mexico): there’s much more offer than demand. Attrition rates are rather low and the telecommunication infrastructure is recently piking (thanks to USA influence in the region), taxations is generally lower and most of the countries in the zone have commercial agreements with the richer countries. But one thing is true: speaking a second language is still sort of not common. Each Latin American country is big enough to be immerse in its own social and economical problems: there’s not a inmediate need of learning a second language and only those attenting prestigious universities or with a big desire of learning (something that the younger generations have but still depending in the social status), manage to speak english. But beside that the offer is still there and is meant to last longer. There’s much things yet to be improved but this will be a right time for companies to realocate their services in the Latin American region.
Israel Balderas
Offshoring Institute