IT Outsourcing Alternatives: Emerging IT Markets Around the Globe — Part 1

IT Outsourcing Alternatives: Exploring the Emerging IT Markets Around the Globe

Part 1 of a Three-Part Series

For years the term IT outsourcing has been synonymous with sending work over to India. But as India’s IT outsourcing market has become overrun, other countries around the world have begun to step-up as viable alternatives. This three-part series will explore the emerging markets that have begun to take on work that may have been automatically routed to India just a few years ago, as IT outsourcing moves to different sectors across the globe.

IT Outsourcing Makes Its Way To South America and Latin America

The potentially greatest benefit of IT outsourcing is also one of its stumbling blocks — geographical location. When you outsource an IT project you no longer have to worry about location restrictions, paying relocation fees, or wondering if that senior IT director will really leave his hometown to come work for you. IT outsourcing provides the best of the best, without the hassle of wooing a certain skill set.

Additional benefits include:

• Enhanced skill set. — Outsourcing provides you with access to the brightest minds across the globe.
• Higher education for your team. — IT outsourcing opens several educational doors for your team. It allows you to recruit someone who can elevate the educational level and skill set of your internal team, while costing less than a typical IT director’s yearly salary.
• Improved collaboration — Outsourcing allows you to gain both a bird’s eye view and a detailed look at your IT problems, as well as their inherent solutions. In short, outsourcing creates a collaborative environment that typically delivers the optimal results.

With the aforementioned benefits of IT outsourcing in mind, many countries have tried to topple the reigning king of outsourcing — India. To date, Latin American and South American countries have quickly risen through the ranks to become sought-after IT providers. Mexico, Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Mexico, Nicaragua, Panama, Peru, and Uruguay all provide IT outsourcing solutions with a number of unique advantages.

• Latin American and South American countries are typically in the same time zone as the majority of U.S. states. This means that a full workday overlap can occur, which enhances the ability for educational and collaborative opportunities.
• There are many cultural similarities between the U.S. and South and Latin American countries. Many U.S. IT firms prefer to work with IT specialists from Argentina, due to the fact that the country shares a similar culture. The closer the cultural similarities, the easier it is to establish a certain level of comfort and trust on the given project, and the easier it is to create open lines of communication.
• Labor is still relatively inexpensive in Latin and South American countries, especially when the accelerated skill set is considered. Additionally, India is currently experiencing an increase in the cost of living, which has subsequently driven up the cost of IT outsourcing.
• As the population of native Spanish speakers continues to increase within the United States’ borders, the appeal of working with Spanish cultures grows. Generally speaking, U.S. workers have an easier time understanding English that is spoken with a Spanish accent versus English that is spoken with an Indian accent.
• Geography is one of the biggest benefits of IT outsourcing; however, it can also be a challenge. Fortunately for Latin American and South American countries, it is fairly easy to reach their borders with a short flight from the U.S. Conversely, traveling to India to review work with your chosen IT team is a lengthy and expensive process.

As the list of advantages continues to grow and the countries begin to invest more money into their IT infrastructure and development, Latin America and South America will steadily become the chosen source for IT outsourcing solutions.

If you’re at a point where re-evaluating your sourcing strategy, providers, or locations makes sense, Wavestone US can assist you with IT outsourcing advisory services, including strategy, provider evaluations, site risk evaluations, and much more. To learn more, visit https://www.wavestone.us/capabilities/.