The outsourcing industry has not been spared by the current conditions of global economic volatility. Indeed, it has been affected both directly and indirectly by this economic crisis. Outsourcing target markets are also suffering from severe difficulties as they struggle to recover from the crisis. This has brought about a change in the behavior of some outsourcing niche areas, and has also modified the criteria and methods that organizations apply in order to plan and make strategic decisions regarding outsourcing resources.
China and India are healthy global outsourcing destinations today, but other players have been changing their position during this difficult economic period. According to the 2009 A.T. Kearney Global Services Location Index (The Shifting Geography of Offshoring), some eastern European countries have fallen from leadership positions; in contrast, some countries in the Middle East have been climbing up.
Latin American countries experienced some positional changes from 2007 to 2009, but they still preserve competitiveness in the outsourcing industry. Independently of irregular economic trends, India, China, and Malaysia are still very powerful competitors in the outsourcing market.
Undoubtedly, India and China are—and will continue to be—major players in the outsourcing arena for the next few years to come. They have achieved a powerful combination of expertise/cost/technical skills that makes them key players. This, combined with their vast pool of labor resources, represents a winning bet. The US and Canada are the main outsourcing clients for these kind of services. But European companies in countries such as Spain, England, and Germany, are also searching for other places to address their offshore outsourcing needs. Countries like Philippines and Malaysia are taking advantage of this, and have acquired importance in the outsourcing field.
Despite the global economic turbulence, Latin American countries seem to be thriving to some extent. Some major players such as Brazil, Chile, and Mexico are already common destinations for companies looking for nearshore services. But there are also new players pushing hard to gain market share, including Argentina, Costa Rica, Panama, and Uruguay.
The Latin American Players
According to the 2009 A.T. Kearney Global Services Location Index, Latin America countries ranked very respectably when the following factors are taken into consideration:
* financial attractiveness
* people skills and availability
* business environment
Chile is ranked by A.T. Kearney as the outsourcing leader in Latin America, followed not far behind by Mexico and Brazil, but there are some other countries that appear to be in better positions to deliver outsourcing services:
Chile—It is no surprise that Chile appears as one of the leaders for outsourcing in Latin America. A solid infrastructure for telecommunications, investment attractiveness due to clear financial regulations, political stability, and attractive costs all make it a regular choice for outsourcing. Offering service for US and Spanish companies, it’s a very attractive choice for business process outsourcing (BPO), knowledge process outsourcing (KPO), and call center operations for very diverse industries.
Mexico—Still a common nearshore destiny for companies from the US and Canada, Mexico has maintained a stable position in the global outsourcing market. Proximity to the US and a Spanish-language consumer market with stable growth have helped Mexico maintain its position as a common destination for nearshore call center and BPO operations as well as IT outsourcing.
Brazil—This country is already a big world player in IT outsourcing. The Brazilian government has been making efforts to encourage offshoring and maintain its IT quality services and infrastructure. Brazil is also taking advantage of its large population and its efficient and skilled IT workforce to stay the course within volatile global economic conditions. Already a proven contender in the IT area, it has a growing labor force and is a stable contender in the IT offshore market.
Costa Rica—This small Central American player is growing because of its strong efforts to enroll new investors and create opportunities. Based also on its proximity to the US, it has developed a strong and skilled workforce, along with an efficient telecommunications infrastructure to improve its outsourcing services at a global level.
Argentina and Uruguay—With high education rates, these two countries have continued to develop and encourage their outsourcing services. They count on their strong, skilled, and low-cost workforces to be considered as an ideal option for services such as IT and financial services. They expect to be also important players for the large Hispanic customer service sector within the US.
Panama—Like other countries in this region, Panama is trying to take advantage of its proximity to the US, as well as of the fact that they share an important time zone. With a large bilingual community (thanks to a long relationship with the US based on the Panama Canal), it is encouraging local and global outsourcing companies to invest in outsourcing services, and is trying to consolidate a larger technically skilled workforce.
China and India are healthy global outsourcing destinations today, but other players have been changing their position during this difficult economic period. According to the 2009 A.T. Kearney Global Services Location Index (The Shifting Geography of Offshoring), some eastern European countries have fallen from leadership positions; in contrast, some countries in the Middle East have been climbing up.
Latin American countries experienced some positional changes from 2007 to 2009, but they still preserve competitiveness in the outsourcing industry. Independently of irregular economic trends, India, China, and Malaysia are still very powerful competitors in the outsourcing market.
Undoubtedly, India and China are—and will continue to be—major players in the outsourcing arena for the next few years to come. They have achieved a powerful combination of expertise/cost/technical skills that makes them key players. This, combined with their vast pool of labor resources, represents a winning bet. The US and Canada are the main outsourcing clients for these kind of services. But European companies in countries such as Spain, England, and Germany, are also searching for other places to address their offshore outsourcing needs. Countries like Philippines and Malaysia are taking advantage of this, and have acquired importance in the outsourcing field.
Despite the global economic turbulence, Latin American countries seem to be thriving to some extent. Some major players such as Brazil, Chile, and Mexico are already common destinations for companies looking for nearshore services. But there are also new players pushing hard to gain market share, including Argentina, Costa Rica, Panama, and Uruguay.
The Latin American Players
According to the 2009 A.T. Kearney Global Services Location Index, Latin America countries ranked very respectably when the following factors are taken into consideration:
* financial attractiveness
* people skills and availability
* business environment
Chile is ranked by A.T. Kearney as the outsourcing leader in Latin America, followed not far behind by Mexico and Brazil, but there are some other countries that appear to be in better positions to deliver outsourcing services:
Chile—It is no surprise that Chile appears as one of the leaders for outsourcing in Latin America. A solid infrastructure for telecommunications, investment attractiveness due to clear financial regulations, political stability, and attractive costs all make it a regular choice for outsourcing. Offering service for US and Spanish companies, it’s a very attractive choice for business process outsourcing (BPO), knowledge process outsourcing (KPO), and call center operations for very diverse industries.
Mexico—Still a common nearshore destiny for companies from the US and Canada, Mexico has maintained a stable position in the global outsourcing market. Proximity to the US and a Spanish-language consumer market with stable growth have helped Mexico maintain its position as a common destination for nearshore call center and BPO operations as well as IT outsourcing.
Brazil—This country is already a big world player in IT outsourcing. The Brazilian government has been making efforts to encourage offshoring and maintain its IT quality services and infrastructure. Brazil is also taking advantage of its large population and its efficient and skilled IT workforce to stay the course within volatile global economic conditions. Already a proven contender in the IT area, it has a growing labor force and is a stable contender in the IT offshore market.
Costa Rica—This small Central American player is growing because of its strong efforts to enroll new investors and create opportunities. Based also on its proximity to the US, it has developed a strong and skilled workforce, along with an efficient telecommunications infrastructure to improve its outsourcing services at a global level.
Argentina and Uruguay—With high education rates, these two countries have continued to develop and encourage their outsourcing services. They count on their strong, skilled, and low-cost workforces to be considered as an ideal option for services such as IT and financial services. They expect to be also important players for the large Hispanic customer service sector within the US.
Panama—Like other countries in this region, Panama is trying to take advantage of its proximity to the US, as well as of the fact that they share an important time zone. With a large bilingual community (thanks to a long relationship with the US based on the Panama Canal), it is encouraging local and global outsourcing companies to invest in outsourcing services, and is trying to consolidate a larger technically skilled workforce.
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