"Random Hacks of Kindness" in Latin America

Random Hacks of Kindness,  a global community of computer experts that develop practial open technology for social good, is now partnering with Fundación Ciudadano Inteligente  (The Smart Citizen Foundation) to support their efforts in Latin America.  

Based in Santiago, Chile, Fundación Ciudadano Inteligente was founded with the goal to promote transparency.  FCI encourages citizens to utilize information and communication technologies to join the organization's cause and networks with organizations that work in themes of transparency, technology, and social good throughout Latin America.

Random Hacks of Kindness has been responsible for sharing open-source technologies mostly related to water management: flood warning systems,  supply-demand water planning, maximized utilization of non-potable water for crop irrigation systems, ect.  In one particular project, these technological tools are meeting the tangible needs of the citizens of Peru.

In Peru, water resources management is a major issue.  Over 98% of the country's annual renewable water resources is available east of the Andes Mountains, in the Amazon region.  This leaves the coastal area of Peru, home to most of the major Peruvian economic activity and half of the country's population, with less than 1.8% of the national freshwater renewable resources.  RHoK is working to create a crowdsourced bank of hydrology maps online that will enable more efficient water usage and planning, thus stopping the increasing toll that economic and population growth take on the inaccessible water resources.  

The Developing Latin America event will bring together developers, designers, and members of civil society from 6 Latin American countries to find innovative technological solutions for the social good of their country and region. All 6 event locations will participate in the upcoming RHoK Global December 2011 event where they will have an opportunity to collaborate with peers around the world.

Solutions in Latin America: 

Buenos Aires, Argentina

Lima, Perú

Mexico City, México

Montevideo, Uruguay

Rio de Janiero, Brasil

Santiago, Chile

The sharing of open source technologies like the ones being utilized by RHoK and FCI offer the promise of rapid development in these areas for the true benefit of society, allowing people's needs for water to be met more efficiently.

Another Reason to Nearshore? Indian IT Attrition Reaches 55%

When Frank Casale, CEO of the Outsourcing Institute, asked an executive for an Indian service provider to name the biggest challenge his company faces, his answer was attrition, at an almost reflexive speed.  High turnover on a team reduces productivity and cost effectiveness at an alarming rate.  Companies don’t want to begin a project with a team knowing that 55% of that original team could be gone, and replacements will need to be trained, every year.  This is the reality for some providers in India, where the attrition rate is at 55% in the IT and BPO sectors, according to a study by the Associated Chambers of Commerce and Industry of India (ASSOCHAM).  The numbers below are the 2010 attrition rates for the U.S. IT industry, and outsourcing industries in Brazil, Chile, China, and India.

Sources: AT Kearney (Chile, Brazil), Indian Associated Chambers of Commerce and Industry (India), Pragmatic Outsourcing (China), and Compensation Force (U.S.)

Below are self-reported numbers from top Indian firms.  As expected, the reported numbers are significantly lower than those reported by a third party source (ASSOCHAM).  It’s likely that a combination of the smaller Indian firms play a role in bring the rate up, and misreporting on the part of Indian firms are contribute to the large discrepancy.  However, even taking these numbers at face value, they are in many cases higher than those found in Latin America.

Source: The Times of India

What factors contribute to lower attrition in Latin America?  In general, the family-oriented culture in Central and South America means less people are likely to relocate or leave their company for another.  Time zones are also a factor.  Business Process Outsourcing and customer service outsourcing professionals in India may have to adjust their working hours to accommodate the U.S. time zones.  With a well-developed market sourcing market where companies compete fiercely for skilled labor, employees in India will relocate for cents more per hour.  Even in Chile and Brazil, the comparatively low attrition rates can cause major problems.  Companies should ask their providers to name the measures being taken to reduce turnover among employees.  

2011 Nearshore Destinations Ranking

Nearshoring has become a popular and intelligent option for US companies that are not only looking to lower costs, but also want that cultural affinity and technological innovation that lend themselves to increased productivity and expertise.  Latin America as a whole is gaining credibility, but it is important to delve deeper than the regional level to find the place where a company can attain the most value.  With this in mind, ThinkSolutions took 19 countries in Central and South America to determine their overall appeal as nearshoring service locations and ranked them according to their financial incentives, business environment, and labor force.  We placed emphasis on factors that would bring out the unique characteristics of the region, such as cultural affinity, time zone alignment, technological readiness, and language capabilities.  These rankings will be updated quarterly or as major events occur that alter the outsourcing landscape. Click here to request a white paper. 

Students Protest for Education Reform in Chile

On Friday, August 12, Chilean officials ordered an end to protests, stating that "Chile is not going to be governed from the streets".  Fed up with civil disorder in Santiago, authorities are urging student protest leaders to seek out official avenues for education reform.  Protests against Chile's privatized education system have been carrying on for months, with Chilean college and high school students demanding reform to an education system that leaves many in crippling debt upon graduation.  Students have, for the most part, refrained from violence in favor of more creative demonstrations, some of which involved superhero outfits and Lady Gaga costumes.  On June 6, with “pasión por la educación”, thousands participated in a kissing protest, and on June 24, three thousand students organized a flash mob to "Thriller", declaring that "the present [education] system is rotten and dead."  Last week, violence escalated as students demanded airtime on national television and the government ceased authorization of the organized marches.  Riot police have resorted to tear gas and water cannons in an attempt to maintain "business as usual", and 873 arrests were made after the first day of rioting.  

     

The video below gives a solid overview of the events that have transpired:

Back in January 2010, Nearshore Americas named Santiago the safest and least corrupt capital city in Latin America, and Chile is the most politically sound country in the region.  This serves as a reminder of the risk of doing business in Latin America, where unpredictable social and political environments can distract, or worse, endanger employees and operations.

Bogotá Losing Competitiveness in IT Industry

Due to the recent lack of investment in the IT sector, Bogotá is no longer as competitive as other cities in Latin America.  Colombia's ICT minister, Diego Molano, said that the city has dropped from 5th place to 9th in competitiveness among Colombian cities alone, and this lack of competitiveness has caused the Bogotá's internet penetration rate to drop to 12.78%.  Colombia as a whole demonstrates a weakness in internet penetration.  To compare, internet penetration is 63.5% in Buenos Aires, Argentina, 48% in Santiago, Chile, and 29% in Lima, Peru.  Molano calls for increased IT investment, which will in turn increase competitiveness, create jobs, and reduce poverty.

Read it at Business News Americas.

Ankur Prakash Discusses TCS Latin America

As part of the Thought Leaders in Cloud Computing Series, Ankur Prakash, VP and COO of Tata Consulting Services Latin America, gives insight into the Latin American outsourcing market. To give a background on TCS Latin America, they began operations in Mexico City in 2003, and have since expanded into Ecuador, Colombia, Peru, Chile, Argentina. Brazil, and Uruguay.


Prakash gives his take on the talent in Latin America, the strategy behind seeking first tier cities, and recruiting from the Latin American labor pool.  When asked about the cost advantage of the region, he replied, "As for the Latin American cost advantage, cost arbitrage, I don’t think that any company that works just on cost arbitrage in Latin America can provide any kind of value additional and advantage to local customers."  He also explains that because of the vastly different economies that exist in the region, it is difficult to generalize on cost savings.  Indeed, companies will find most regional generalizations unhelpful when examining Latin America.


Read the full interview here.

Jet Blue Prepares to Offer More Flights to Latin America

Jet Blue may become the airline of choice for companies with nearshoring strategies...

JetBlue Airways Corp., with 65 daily trips to the Caribbean and Latin America, may fly to more distant international destinations as it adds fuel-saving winglets to planes and receives new Airbus SAS A320neo jets.

The changes, along with replacing smaller Embraer E190 jets with bigger planes on some routes, will allow the New York-based carrier to fly farther and carry more passengers. JetBlue announced a $2.5 billion order Tuesday for 40 A320neos. 

The plan will allow JetBlue to expand its strategy of focusing flying in New York, Boston and the Caribbean. The carrier said it also is likely to use Airbus A321 aircraft it will receive to boost service on high-demand cross-country routes between New York and San Francisco and Los Angeles.

Read it at Ashbury Park Press

Chile Invests in IT Future

IT spending was at $2 billion last year and is projected to increase to $3.4 billion by 2014.  Their IT growth of 5.7% makes them the LATAM leader, ahead of Argentina at 4.7% and Brazil at 4.5%.  Students are choosing tech careers over business careers, with majors in electric engineering, software studies, and computer science.

Read it at Nearshore Americas.

Chile Wants to Borrow US Entrepreneurs for $40,000

In an attempt to build a stronger infrastructure, Chile will offer grants to any entrepreneurs willing to work on a project within their borders.  While this project intends to make Chile “more than just an outsourcing hub”, their movement toward innovation will make Chile a recognizable competitor in the IT outsourcing market.

Read it at Forbes.

A.T. Kearney Global Services Location Index

Popular nearshoring destinations are gaining some ground according to AT Kearney’s Global Services Location Index.  After an 18% wage decrease in Mexico, the country made its way to the top of the Latin American countries and ranked 6^th overall.  Chile, dropping from number 8 in the 2009 index, ranked 10^th this year.  Why did Chile drop?  According to AT Kearney’s website, the rankings are assigned based on many factors including skilled labor, inflation, language capabilities, and infrastructure modernization.  In the case of Chile, their resilience in the wake of a global economic downturn allowed the price of wages to remain stable.  Relative to other outsourcing hubs, this made Chile’s cost of labor less competitive, but in the midst of global political instability, should the Global Services Index penalize a country for keeping their wages stable? 

The internet shut-down in Egypt had disastrous effects for BPO/ ITO centers reliant on a robust internet to succeed, and this turmoil occurred immediately after AT Kearney’s rankings placed Egypt 4^th in the Location Index.  Granted this type of problem is truly unpredictable, but how can companies account for political risk when choosing an outsourcing destination? In addition to consulting sources such as AT Kearney, invest in a political risk analysis of countries where critical business and IT processes are being supported. Compare the risks of occurrences, such as the Egypt situation, with the cost-savings and business benefits of using these locations.  Saving 30% from your bottom line won’t provide the same utility if you risk not running your business properly for long periods of time.

Read an analysis at PR Newswire.