I just wrote a story on the outsourcing market in Latin America expanding beyond Mexico to other countries such as Guatemala, Costa Rica and Colombia. Shortly thereafter, I saw a blog post by InfoWorld's Ephraim Schwartz in which he focuses on Brazil, a country mentioned only in passing in my story.
Genpact, which earlier this year added a delivery center in Guatemala to complement operations in Mexico, is considering a move into Brazil to serve that country's large and insular market and also to provide cost-effective services in Portuguese for global clients. "It's difficult to do that elsewhere in Central America or out of our Eastern European hub," said Steve Rudderham, business leader for Genpact Latin America, during our interview.
In his discussion with Antonio Moreira, CEO of the North American operations of Brazilian service provider Stefanini IT Solutions, Schwartz highlights some of the general reasons for considering Latin America as an outsourcing destination, as well as some exclusive to Brazil. In the first category: ability for North American companies to conduct business in the same or similar time zones, ease of visiting Latin American facilities and attrition rates lower than India's.
Risk mitigation is another key benefit of sending work to the region, according to Chris Disher, a retired management consultant and co-founder of the International Association of Outsourcing Professionals, whom I interviewed for my story. He told me:
You don't have to put all of your eggs in one basket. Labor crosses boundaries easily, so you can set up shop and attract workers from multiple countries. It gives you added flexibility.
As for Brazil-specific advantages, Moreira tells Schwartz that So Paulo has the second-largest community of Java programmers outside of the U.S. It also has a large and well-established banking sector, which means there are plenty of mainframe programmers in its IT workforce. Because of their dwindling numbers, those skills are becoming a hot commodity for some organizations, as I wrote back in August when California state Controller John Chiang rebuffed Gov. Arnold Schwarzenegger's request to cut the salaries of the state's 200,000 employees by telling Schwarzenegger it would take six months to reconfigure the state's COBOL-based payroll system.
Brazil's business culture is also more akin to the U.S. than the cultures of some Asian countries, says Moreira. Brazilians generally do not hesitate to inform North American teams of problems that could impact delivery deadlines, for instance. Says Moreira:
Brazilians are more proactive. If they see they are not able to meet the deadline, they do something. They won't wait until the last minute and then say they can't meet the deadline.
Two U.S. companies mentioned in Schwartz's post say Brazil's time zone is a big bonus, as it makes it far easier for their onshore and offshore teams to collaborate. They also both like the close cultural affinity they enjoy with Brazil and a work ethos that values working long hours and getting the job done. The country offers labor savings of roughly two to one over U.S. employees, says the CEO of one of the two companies.