Offshore Outsourcing: The Near-Shore Advantage Begins with Business Hours
Time can be the difference between a successful outsourcing project and a very costly failure.
Wed, January 07, 2009
CIO — In the current economic climate, one of the most important responsibilities for CIOs is to develop creative solutions to help their companies make it through tough business conditions. Most often those solutions involve cost reductions in the way business is done, and a common choice is to outsource IT functions or special projects.
In the world of IT outsourcing, costs are not just related to the price charged for the service—what is often just as important are the costs clients will bear associated with managing relationships with IT services providers. Coordinating work with your IT outsourcing partner can be a challenge, especially if the provider is located a significant distance from your company. And the synchronization of business hours and geographic locations can be key factors in getting the most from your IT outsourcing partnership—real-time communication and feasible business travel are crucial to effective and efficient collaboration of project teams.
The outsourcing of IT projects by North American companies to India, China and Hong Kong has been the norm for years, but today many of these businesses are realizing the benefits of near-shore IT outsourcing. Companies also want to mitigate risks and diversify their portfolio of vendors. Cost of labor in India is not as cheap as it used to be and the current geopolitical climate there may be a concern to executives in North America.
Near-shore IT outsourcing allows companies in North America to outsource work to countries in Latin America. Geographic proximity means that travel and communications are easier and less expensive, there are likely to be at least some commonalities between the cultures, and the partners are more likely to speak the same language.
Brazil in particular has fast become a major hub for cost-effective IT support for businesses in the U.S. and Canada, and a top-five location worldwide for IT outsourcing. Brazil has a low employee turnover rate and its IT professionals have a high degree of technical skills and business savvy. Sao Paulo has the second-largest community of Java programmers outside of the United States. And, because of a thriving financial and banking industry, Brazil's IT workforce includes many mainframe programmers as well.
North American companies are finding that the Brazilian business culture is also very similar to their own. Brazilian employees are quick to share their ideas to improve projects. If they believe projects can be done in a different, more efficient manner, they share their thoughts and work in collaboration with their project leaders. Executives that have outsourced offshore often mention that this can be a challenge in countries such as India, China and Hong Kong, where culturally employees are taught to follow the rules and guidelines presented to them by their employers.
