Fifty-one percent of Latin American businesses are engaged in outsourcing, more than in any other region of the world, aside from Southern Europe (63%), according to a new study by Grant Thornton.
The assurance, tax and business consulting firm’s 2014 international business report, entitled “Outsourcing: driving efficiency and growth,” reveals the latest global outsourcing trends, as well as the key drivers and obstacles in different regions. Latin American outsourcing is most prominent in Argentina and Brazil, while tax services are the most commonly outsourced services in the region, the report showed.
“The results suggest that the use of outsourcing providers in the mid-market is well-entrenched across the globe,” said Samantha George, head of outsourcing at Grant Thornton UK. “Outsourced solutions now exist for a considerable number of service lines, and providers have become expert at tailoring solutions to the individual needs of their clients. This is positive news: outsourcing can free up resources tied into back-office processes and put them into higher value-add functions, helping to drive business growth.”
The report showed that 40% of worldwide companies outsource business processes. However, there is still plenty of room for growth, both globally and in Latin America. Eighty-two percent of Latin American firms said they would not consider offshoring, 38% cited the high cost of implementation as a major obstacle and 28% of Latin American business leaders said they had been negatively influenced by a bad past experience of outsourcing.
“Of course, the results also show there is room for further penetration in the market by engaging with the three-fifths of businesses which are not currently considering outsourcing,” George added. “The results highlighted the popular misconception that outsourcing a process means losing control, whereas, in fact, it can help senior leaders at dynamic companies take a step back and gain a clearer picture of how the business is performing against its strategy. This suggests the industry has a challenging, but eminently achievable, marketing task on its hands.”