Executive Briefings

Latin America Becoming Attractive for IT, Business Process Outsourcing, But There Are Potential Pitfalls

The IT and business process outsourcing market is heating up in countries throughout Latin America. Outsourcing analyst firm HfS Research estimates that the region's outsourcing industry will grow 15 to 17 percent this year. Indigenous providers are offering more sophisticated services. U.S. multinationals have a large local presence. And Indian providers are building or buying their way into the market.

Some U.S. corporate IT leaders are looking beyond India to countries like Brazil, Chile or Mexico as nearer shore alternatives. Proximity can improve collaboration and reduce management overhead. Cultural affinity can make for more compatible outsourcing relationships. And some companies are eager to use outsourcing as a stepping stone to entry into the local markets.

Although the Latin American outsourcing market has matured over the past five years, there can be significant trade-offs that may not be immediately obvious-even after your exploratory vendor visits in the region.  Buyer beware: There are hidden costs and issues that could affect your nearer-shore outsourcing deal.

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The IT and business process outsourcing market is heating up in countries throughout Latin America. Outsourcing analyst firm HfS Research estimates that the region's outsourcing industry will grow 15 to 17 percent this year. Indigenous providers are offering more sophisticated services. U.S. multinationals have a large local presence. And Indian providers are building or buying their way into the market.

Some U.S. corporate IT leaders are looking beyond India to countries like Brazil, Chile or Mexico as nearer shore alternatives. Proximity can improve collaboration and reduce management overhead. Cultural affinity can make for more compatible outsourcing relationships. And some companies are eager to use outsourcing as a stepping stone to entry into the local markets.

Although the Latin American outsourcing market has matured over the past five years, there can be significant trade-offs that may not be immediately obvious-even after your exploratory vendor visits in the region.  Buyer beware: There are hidden costs and issues that could affect your nearer-shore outsourcing deal.

Read Full Article