Uruguay's early entrance to the Latin American nearshoring industry has allowed the country to develop a strong sourcing market. While the high cost of labor and taxes keeps Uruguay out of the top of our Nearshoring Destinations Index, Uruguay offers an experienced and educated workforce to potential buyers. The Global Delivery Report interviewed Mario Tucci, formerly the head of operations for Tata Consultancy Services in Latin America, about how Uruguay's role in the IT Outsourcing Sector.
Q: How did Uruguay gets its start in the IT industry?
A: We started very early (educating) IT engineers in Uruguay and Argentina. That ignited the IT software development (sector). Since we’re far away (from other major markets) we had to learn a lot. You couldn’t call an 800-number in the 1980s for help. You had to develop something locally. As a result, for example, Uruguay is now home to two vendors of core banking software, with customers in Mexico, Costa Rica, Peru, Ecuador, Chile and Argentina among others.
Q: Has this been supported by government investment in training?
A: (In the 1970s) there was a university across the river in Argentina, the La Plata University where some people from Uruguay, some from Argentina, created the first Latin American IT engineering institute. It was a very well known and prestigious institute. All this builds on a very high cultural appreciation for education, as in Uruguay all education is free and public, from K-12 through the university level.
Q: What are some of the key areas where Uruguayan software developers are active?
A: Beyond banking, there is logistics. A logistics software solution developed for PepsiCo in Uruguay was taken by PepsiCo and adopted throughout the entire Asia Pacific region. Another is Artech, developer of the GeneXus Technologies cross-platform development and maintenance framework.
Q: When did the shift to also offering BPO begin?
A: It began when TCS came and put a stake in the ground in 2002. When TCS came here, nobody ever thought this operation could reach 1,000 people. In 2008 TCS senior management came to us, based on our ITO experience, and said “We know you don’t have any BPO experience, but you do have the people and attitude we need.” This operation has now grown to 400 people, and is the largest BPO operation of a service provider in the country and employs half the TCS employee base here. It was a very nice demonstration that if you have the right team, which is willing to grow, and to (take on) an ambitious task you can do wonders.
Q: How about other BPO operations besides TCS?
A: After ten years, this country, via the free trade zone and other (efforts) we have seen growth in BPO and IT services, not only for Uruguayan companies, but also many international companies. For example, MercadoLibre, which is the eBay of Latin America, is doing all their back office work from Montevideo. You can also see, a lot of smaller Uruguayan firms providing agile development and technology services and consulting services to companies in the U.S. and around the world. There are several companies here working with Africa, and several working with as far as Japan.
Q: How would you compare Uruguay with other Latin American countries as a source of BPO and IT services?
A: We’re a country of foreigners. Everyone here is the grandson of either a Spaniard, an Italian, a German or a Frenchman. As a result, the country is very cosmopolitan. A lot of people here speak different languages, which is good for this industry. Also, since we’re far away (from other markets) we had to create our own environment.
Finally, historically it’s very rare that Uruguay has fought or had a problem with any other Latin American country. It’s seen as a friendly country by the rest of Latin America. That helps to compete also.
