Latam vs. India

A few weeks ago I attended the webinar “Near-shoring in Latina America” organized by ThinkSolutions and the

A few weeks ago I attended the webinar “Near-shoring in Latina America” organized by ThinkSolutions and the Outsourcing Institute. Although this webinar was targeted to US companies seeking to offshore, it was very interesting to participate as a services provider.

I was surprised, and so were the organizers, about the large number of people attending the event –a proof of how Latam is stepping forward to a major role in the global outsourcing industry. The webinar´s themes were about the outsourcing differences between Latam and India and what are the strengths of the region.

Here is a summary of the main points discussed that are worth mentioning:

First, as India is experiencing the new IT “gold-rush”, its average service price is rising. Second, English is taught as a second language in Latin-America. Third, the region is closer than India to the US market. Finally, Latam has lower turnover than India and it has a closer cultural affinity with the US.

These last two stand out as they represent the greater pain-points for an IT manager looking to offshore. The lower turnover means a more stable team for a smoother and timelier project; in fact Latam has 5% less turnover than India. Latam´s cultural affinity with the US plays a key role in the communication process between the two parties, lowering the risk of unwanted surprises. Moreover, Latam culture replaces the Indian “Yes to everything” to the “straight answers one.

Some of the other advantages of outsourcing to Latam discussed in the webinar are: good telecommunications infrastructure, high quality education system, similar time-zone with the US, presence of the leading technology providers like IBM and Microsoft, well trained developers and managers, who already have experience in important projects and finally the rising support of the local governments.

To sum up, many people in the US and other markets seem to be recognizing that Latam has unique competitive advantages, quality resources and the technical capability to seduce US business to work with local companies. The industry is growing fast, and there is no doubt about the arrival of the region as a major player in the global outsourcing scene.

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