Nearshore Outsourcing To South America The New Direction Of Outsourcing Industry
Nearshoring is one of the forms of outsourcing
. The primary difference between nearshore and offshore outsourcing is that in the former, theoutsourcing partner is located geographically closer to the outsourcer. Today, for US companies, there is a growing trend in outsourcing to anearshore partnerlocated in Latin America, rather than an offshore partner in India, China or East Europe. Lets take a look at some of the benefits of IT nearshoring to South America.
Benefits of Nearshoring:
Similar time zone and close proximity:
The smaller distance between the outsourcing company and service provider leads tobetter communicationand better development of relationships. It also makes project management simpler. The nearshoring outsourcing partner is able to provide better services and quality control. Outsourcers also need to visit their outsourcing partners, and closer proximity leads to reduced traveling time and costs.
Good infrastructure and skilled labor: Several countries in Latin America have good IT infrastructure and skilled professionals who are capable of providing high quality IT services.
Cultural affinity: Having the same cultural background makes communication and co-ordination easier and more effective. It also reduces problems that may arise due to cultural diversity.
Latin American countries such as Uruguay and Chile are frontrunners in this new trend of nearshoring adoptedby US and Canadian companies. Lets take a look at the reasonswhy countries like Uruguay and Chile strong contenders in thenearshore outsourcing industry-
Advantages offered by Uruguay to thenearshore outsourcing industry:
Skilled Labor:Despite the high labor costs, Uruguay offers ahighly educated and experienced workforce to potential buyers. The courses available in Uruguay universities are aligned with the latest technology trends, and software engineers in Uruguay have a strong background in software development, DB design, .NET, and Java, to name a few.
Technology adoption: UruIT is the first country to fully deploy One Laptop Per Child initiative, giving every children in the country access to a laptop and internet access.
Time Zone:Uruguay falls in the GMT+3 zone, and its geographical location is ideal for doing business with Europe and U.S.
Government support: There are no taxes for software export. This initiativehas beentaken by the Government to support and encourage local development of this industry.
Low costs:Government support for the industry also results in lower costs for research and facilities. Businesses can get good facilities by paying less money.
Advantages offered by Chile to the nearshore outsourcing industry:
Politically stable: Chile has a politically stable environment, which ensures that sustainable economic policies remain consistent. The country also focuses on a high level of business transparency and has employer-friendly labor laws.
High literacy rate:The literacy rate in Chile is around 96%.
Same time zone:It falls in same time zone as Eastern U.S. and New York.
Developed infrastructure: Chile has a well-developed telecom infrastructure. It also has the highest penetrationrate for mobile telephony and broadband in the region, which stands at 80.4% and 11.9% respectively.
Open immigration policy: Chile has adopted an open immigration policy, and work permits are generally processed within a week. This factor is helpful for businesses that want to bring in talent from other countries to kick start their operations.
Government support:The government of Chile heavily invests in research and development (R&D) and offers a wide range of monetary incentives and government grants for high-tech businesses, such as CORFO and ProChile initiatives.
by: Brown Simpson
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Nearshore Outsourcing To South America The New Direction Of Outsourcing Industry