Nearshore Americas

The Big Divide: Nearshoring is a Dream to Some and a Complete Unknown to Others

By Kirk Laughlin

Speaking to several dozen buy-side procurement leaders and other people who control the purse-strings of their company’s sourcing investments during the last few days at the S.I.G. Global Summit here in Savannah, one revelation has become crystal clear: There is a huge gap between buyers who get and embrace the value of Nearshoring and  another crowd that really has almost no idea what goes on south of Texas.

My observation is absolutely not to condemn the second group, which for our purposes we will call the “Blank Slates.” Who can blame them? The Nearshore sourcing community – at first glance – may appear to be a fragmented federation of nations and service providers that just don’t fit neatly into a category. For the Blank Slates, the convenient off-the-cuff classification is that the provider marketplace in Latin America and the Caribbean  is not mature enough.

A subset of the Blank Slate crowd are those that just dismiss Latin America altogether because of the belief that it is just too “risky.”  In both of the instances, there is some shades of reality in their perceptions – but let’s be honest – the “Blank Slate” crowd has not done their homework on Latin America.Their judgments are often random and – in if you dig deeper – seldom have these people taken the time to rigorously analyze nearshore sourcing opportunities.

Bright Lights

What’s striking when you attend an event like S.I.G. (which is incredibly well organized and efficient in producing meaningful discussions and content depth) is the huge divide you see between the “Blank Slates” and the folks who actually are in Latin America or intend to be there in the near future. The “Switched On” group have that unmistakable excitement that reminds me of when a friend finds a great holiday package deal. These buyers know they have discovered value –  they know that they are part of something that will grow and that they are getting in at a good time.

What’s also interesting about the “Switched On” group is they will be able to articulate the often vast differences in capabilities from country to country. They see the whole map and they are able to draw the distinctions. On the flip side, the “Blank Slates” make broad characterizations about Latin America and sometimes make reckless judgments about the capabilities that can be found there.

A Business Culture Bias

The point to keep in mind is that members of the Switched On group and the Blank Slates very often hold the same rank and sit in very similar procurement, resource management, vendor selection or sourcing roles at many medium to large corporations across North America and Canada.  The difference is somehow the sourcing culture at their firms has developed a bias toward Latin America – good, bad or indifferent.

What does this mean for the Nearshore community?

Again, our contention is that the number one reason why U.S. companies don’t do nearshoring is they don’t know the services they require actually exist in the Nearshore. It is going to continue to be necessary for the Nearshore community to identify ways to educate the marketplace – and to do a better job encouraging provider customers to get out and talk about their experiences.

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The reality is doing business in Latin America is different that doing business anywhere else in the world. Sourcing providers with a global footprint increasingly admit that there are capabilities and soft-skill intangibles that exist in Latin America – and no where else!

But – strangely enough – the word hasn’t reached into the Blank Slates crowd. You sometimes wonder if they’ll be too late to the party?

Kirk Laughlin

Kirk Laughlin is an award-winning editor and subject expert in information technology and offshore BPO/ contact center strategies.

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