Brazil, Argentina, And Mexico: Attractive Offshore Locations?

While not the top priority, more than a quarter of respondents to Forrester’s Forrsights Services Survey, Q2 2012, stated they were looking to implement or expand their use of offshore resources. Motivation for new offshore geographies is driven by a range of factors, from seeking new sources of talent to risk mitigation, cost savings, innovation, and local market knowledge and access.

 

My recently published report analyzes the attractiveness of the three largest economies in Latin America as outsourcing locations: Brazil, Argentina, and Mexico. Latin America presents an attractive location, particularly for US and Canadian companies. However there is wide variation in the suitability between different countries. Some of the high-level findings of the research include:

 

  • Brazil has clear strengths with its size, scale, wealth of IT skills, and array of local service providers such as BRQ, Ci&T, and Stefanini. Most service providers are focused on the domestic market, however, and don’t have the same export focus as providers in other countries. In addition, overly complex legislative and bureaucratic hurdles, as well as, to some extent, language issues, continue to prevent it from reaching its potential. Ci&T however is one exception, providing a model for Agile development and entrepreneurship.

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HCL Technologies Is Coming Of Age In Asia

HCL is the fifth-largest India-centric IT service provider in terms of revenue (after TCS, Infosys, Cognizant, and Wipro). While it only derived about 15% of its global fiscal 2012 revenues from markets outside of Europe and the US — slightly lower than the four larger Indian firms — HCL has built a strong base in Asia and now boasts more than 300 customers served by more than 8,000 employees. I recently attended HCL’s Asian analyst event in Sydney; below are some key reasons why I believe that you should consider HCL on your shortlist of systems integrators (SIs) and outsourcing providers:

  • Flexibility. When I asked some of HCL’s Australian, ASEAN, and Indian clients what characterizes HCL’s approach to managing client relationships and delivering projects, most mentioned “flexibility” and “HCL is easy to work with,” particularly  during the transition phase in outsourcing contracts.
  • Co-innovation focus. HCL’s Asia growth strategy is both focused (on a limited number of vertical and horizontals) and pragmatic. Starting small with staff augmentation deals, the company invests in relationships to develop its presence and its expertise with its clients’ challenges — 2% of the revenue generated from clients is reinvested in the engagement as an innovation budget.
  • Local commitments. HCL has increased its regional presence via local management and delivery capabilities and local partners, including universities like Singapore Management University; IT companies like Lippo Group in Indonesia; and government, such as its work on the Mobility Lab initiative for EDB in Singapore.
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