By Filipe Pacheco 

Brazil’s ascendancy as a major center for global IT services will be engineered in a uniquely Brazilian way, and should in no way aim to reproduce the model crafted by India over the last twenty years, concluded a ‘super panel’ of  global outsourcing experts at last week’s Brasscom Global IT Forum  in Sao Paulo.

Brazil is in a class by itself, the panelists recognized, in confronting and leveraging an entirely different set of unique circumstances compared with its “BRIC” nation counterpart, India. For instances, Brazil is experiencing a colossal economic boom – taking giant strides forward to become one of the top six economic powers on earth. (India has yet to officially crack the top ten group of leading economies).

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Guest post by Anupam Govil  

The last couple of years have been good for Latin America, with unprecedented growth in the outsourcing sector and significant M&A activity resulting in entry of several large global IT and BPO companies. Most US customer surveys rank Latin America as the third most desirable destination for outsourcing (after India and China) and global rankings of countries in the region have been improving consistently.

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On the Ground at the IAOP LatAm Summit: Our Top Seven Take Aways

Beautiful Cartagena has been the setting this week for a very lively IAOP Summit, hosted by the Colombia chamber of IT and BPO companies, ANDI. Over 400 delegates from about 15 countries have shown up – there is a well orchestrated mix of academic/thought leadership along with spirited, Colombian-style networking. There is little question that this summit is another significant breakthrough for an industry that continues to attract a wider audience, generate more credibility and provide opportunities for more introspection on how to maintain industry sustainability.

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By Jacob Cherian

The International Association of Outsourcing Professionals (IAOP) has announced that Softtek, an IT and business process solutions service provider, was ranked in the top 40 on the 2010 Global Outsourcing list. Softtek is also the largest private IT vendor in Latin America.

Several firms in the U.S. have been targeting Latin America as an alternative to offshoring to faraway locations like India, Philippines, China or Eastern Europe – the offshoring option involves web designers, seo consultants, and even game developers.

However, as of late, the nearshoring option is gaining an edge over offshore competitors as North American firms want to keep a tab on their projects and Latin American offers a business solution that enables companies to outsource projects not too far away from home.

In this nearhsore category, Softtek is now the highest rated Latin American headquartered firm – an impressive feat indeed. According to the …

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The devastation of the Haiti quake is bringing up questions about the influence the United States should exert in Western Hemispheric issues over the coming months and years.

By Kirk Laughlin, Editorial Director

By Kirk Laughlin, Editorial Director
While Haiti is the poorest nation in the Americas, there are numerous other countries that struggle with democratic freedoms, economic stability and educational investment. These issues happen to be the very same issues that drive how global services leaders scrutinize whether, and how much, to invest in a particular country. This raises a key question: How much impact does investment in outsourced services assist in the economic growth and political stability of an emerging economy? And, furthermore, will the expansion of Latin America-based outsourcing grow even stronger with the rising awareness of the positive impacts US businesses can deliver to these emerging economies?
Nearshore Americas asked several industry thought leaders about these issues. You may be surprised by some of the answers – as always feel free to voice your opinion in leaving a comment at the end of this article.
Worries Over Risk will Hurt Poorer Countries

Michael Corbett, Chairman of the IAOP

Traditionally, underdeveloped countries have been able to lift themselves from poverty based on their natural resources or by being a sought-after location for trade and tourism. Outsourcing has the potential to be an even more powerful force for lifting people in poor countries out of poverty. Regardless of where a country is located or the natural resources it may or may not posses, every country has the one thing outsourcing needs – people.

When poor countries educate their people and connect them to the Internet those new workers become immediate contributors to the global economy.  They can help meet the needs of companies and their customers anywhere around the globe.  And, the value of these new workers only grows over time.  As the overall economy becomes more knowledge-based their brain power becomes the new natural resource fueling continued growth.

Sadly, the power of outsourcing both here in the Western Hemisphere and elsewhere around the world is not being fully realized. Why?  Because leaders in the developed countries lack the political will to support outsourcing.  Instead, in the US for example, outsourcing is attacked by political leaders as ‘anti-American’ because of its short-term impact on domestic employment.

Although it would be nice to think that outsourcing in Latin America might expand as a result of recent events, the reality, I fear, may prove to be quite different.

Instead of companies that outsource being seen as socially responsible, they are instead forced to work hard to hide what they are doing for fear of political and consumer backlash.  Political leaders in the world’s top economies are not leading globally at all, they are actually helping to vilify the very companies taking those first, risky steps.

What’s happening in Haiti right now may actually make the situation worse, not better.  It’s going to cause some executives to think even longer and harder about outsourcing to poor countries with fragile infrastructures.  Imagine if you were running an international corporation that was dependent upon work being done by Haitians in Haiti.  The recent tragedy would give further pause to even the most forward-looking businessperson.

Although it would be nice to think that outsourcing in Latin America might expand as a result of recent events, the reality, I fear, may prove to be quite different.  Without the political will at home and given the risks that the recent events in Haiti highlight, we may well see a decrease not an increase in companies outsourcing to the world’s poorest of countries. Corbett is Founder and Chairman of the International Association of Outsourcing Professionals.
More LATAM Governments will See Outsourcing Upside

Peter Ryan is a Lead Analyst at Datamonitor

There is no question that ongoing US investment will be crucial in the development of Latin America as a location for the delivery of added-value services. With an economy moving into recovery, albeit slowly, American enterprises are certain to have learned recessionary lessons in regard to cost management and removing as many non-core overheads as possible from their balance sheets.  Housing the delivery of these services in Central and South America is certain to continue.

However, the potential investment role played by firms based in other developed and developing nations also cannot be overstated in importance.  Latin America will equally benefit from possible delivery engagements with companies based in Spain, Portugal and other parts of Western Europe that are interested in taking advantage of price point arbitrage, a large labor pool and ever-increasing language skills among university graduates.  As well, the increase in interest among Indian-based services organizations for possible roll-outs in Latin America has been strong over the past few years.  And, with Indian labor becoming more saturated forcing higher wage rates, being able to diversify into a region in which services work may be done at lower price points is an excellent diversification move.

It must be recognized that openness to foreign investment in LATAM is very strong currently

In sum, investment from any location in Latin America is certain to be a positive thing for that region.  Not only will the associated increase in jobs help develop a growing middle-class, it will also bring about economic and political stability, and reduce the ideological swings that have pervaded this region historically.  In addition, it will also put pressure on universities to increase emphasis on language skills, business education and technology, all of which will have significant knock-on impacts on raising living standards and the value of services performed for internal consumption and export in these economies.

While not every country is certain to adopt investment strategies favoring foreign investment, it must be recognized that openness to foreign investment in LATAM is very strong currently, and should demand remain strong from the US and abroad, there is considerable chance that more governments will look to this path for economic growth. Ryan heads call center analysis at Datamonitor. He previously wrote a special report on Cuba Outsourcing for Nearshore Americas.

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By Kirk Laughlin, NSAM Editorial Director

We are excited to report that the International Association of Outsourcing Professionals (IAOP) is joining together with Nearshore Americas to create a new media-based alliance that will bring more high quality reporting and more professional development opportunities to the Nearshore community. We will be stepping up our involvement in IAOP events in the Nearshore region and will be working with the great leadership at IAOP to deliver more authoritative information to clients and customers of global services.

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Cloud computing, or delivering hosted and scalable services over the Internet, is revolutionizing the way that outsourced services are sold, purchased and delivered, resulting in greater flexibility in the delivery of services.

The International Association of Outsourcing Professionals® (IAOP) is exploring the technological issues of migrating to cloud computing  through several initiatives.

The IAOP has added an educational track, “Outsourcing’s Next Frontier: Cloud Computing,” at its annual conference, The 2010 Outsourcing World Summit, Feb. 15-17, in Lake Buena Vista, Fl.

IAOP has also formed a topical chapter on cloud computing, co-chaired by technology companies Microsoft and BeyondCore, which will launch in November.

“Recent industry studies have identified cloud computing as today’s top disruptive technology with the very real potential to dramatically reshape the way companies acquire and manage their technology, and the way they run their businesses,” said IAOP …

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I kept hearing it throughout the IAOP Central America chapter meeting this week in Guatemala City:

India is reaching a BPO and KPO saturation point. Companies want more options but they want the same kind of process discipline that originally put India on the map. Is Central America ready to fill those big shoes?

Lori Blackman, president of DNL Global and a key behind the scenes organizer of the event, made a great point when she insisted the greater Latin America region has to take a close look at itself and decide what it can do better than anyone else. As a result, I kept asking my new provider friends: What makes you different? Beyond building call center operations, what’s the long term value play for your operation? Lori says it’s the natural ability to sell and smoothly engage with …

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Cuba: A report is floating around that over 60,000 well-trained IT professionals are standing by ready to take on BPO work in a country that is quickly shedding its pariah status. Anybody up for planning a BPO conference in Havana?

Honduras: Some savvy folks from this emerging nation are making a strong case for cooking up some deals based on available capacity and its strong English-language training. Country leaders  must continue to define their asset base and bring out the more differentiated characteristics of this promising nation. Searching for answers on this market? Gabriela Calix of Green Valley Industrial Park is a great resource.

Colombia: Wow, what an interesting upside. Over 45 million people and a very compelling combination of favorable factors including a far safer society than in years past,  …

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We are reporting live today from Guatemala City where a group of nearly 100 outsourcing providers from across Latin America, private equity investors, national economic developing agencies and North American client organizations are joining the second chapter meeting of the International Association of Outsourcing Professionals.

Chris Disher, of Chris Disher and Associates and former Booz Allen global vice president, is conference chair. Sponsors include ACC, Genpact, Modulares PB, Stratasoft and Transactel.

Conference Vibe: Great networking and very positive outlook for regional growth. The big issues on the table include: raising performance standards, cultivating English-language skills, coping with growth and scaling issues and the special sauce which differentiates Latin America from the rest of the world.

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