Firms Seek Alternatives to India for Outsourcing Higher-Level Jobs

In 2011, Latin America and Eastern Europe surpassed India in the growth of outsourcing facilities.  According to Everest Group, India opened 49 new outsourcing facilities in 2011 while Latin America and eastern Europe opened 54 new facilities.  The trend of shifting functions away from India and toward nearshore destinations is continues to grow as American companies outsource skilled white-collar jobs in research, accounting, procurement, and financial analysis.  As many companies have capitalized fully on their savings potential in India, it is natural progression to seek savings in other functions and geographic locations.   With higher-level functions that don't require mass processing or large numbers of workers, countries like Argentina and Poland are viable options.  While you won't find critical mass in any one Argentinian outsourcing firm, the laborers are skilled and offer a valuable service at a lower hourly rate than companies can find in the U.S.

Source: Bloomberg Businessweek

Outsourcing firms in India are catching on the the trend as well; Tata Consultancy has 8,500 employees operating in Peru and Paraguay.  Genpact, India's largest BPO firm, opened and F&A (Finance and Accounting) outsourcing firm in  Brazil.  Outsourcing is becoming increasingly popular in Eastern Europe.  Particularly in Wroclaw, Poland, 30 universities graduate a steady stream of skilled laborers each year.  Firms including IBM, Ernst and Young, and Microsoft have opened up outsourcing centers in Wroclaw.  Poland and other Eastern European countries offer a better environment for high-level outsourcing.  About 50% of Poland's 20-24 year olds are college-educated, compared with a mere 10% of 20-24 year-olds in India.  It's important to keep in mind that India's massive population means an incomparably larger number of college graduates; India has 109.4 million people between 20-24, compared with Poland's 2.9 million people in that age range.  Though the sheer numbers may always be in favor of India, nearshoring offers valuable benefits that India can't match, such as cultural alignment, language capabilities, and the ability to interact with clients.

Read more here at Businessweek.

Brazil Admits to 'Race Against Time' for FIFA Infrastructure Improvements

President Dilam Rousseff admitted that several host cities are in a "race against time" to complete the infrastructure improvements needed to sustain the millions of World Cup tourists expected in 2014.  Consultancy Ernst & Young along with the Getulio Vargas Foundation reported that Brazil will need to pour $11 billion into road repairs, boosted hotel capacity, reinforcement security, and telecommunications network improvements.  Brazil has received several warnings from FIFA over delays in construction projects that must be ready by 2014. An estimated $3 billion will be spent increasing airport capacity at both Sao Paulo and Rio de Janiero International Airports.  Rousseff has signed off on the most costly infrastructure improvements, which entail the improvement of underground transit systems in all of Brazil's host cities (shown below).

Expect major upgrades in transit, accommodations, and mobile networks for these cities by 2014.


Read it here at Times of India.

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.