Brazilian Outsourcer Politec Looks to Outsource to The U.S.

Politec to set up three development centers as part of bid to grow business outside of Brazil.

Some offshore outsourcers that want more IT work from companies in the U.S. are expanding their operations here, with the latest example being Brazilian vendor Politec SA.

Brasilia-based Politec, which has about 7,000 employees and $300 million in annual revenue, currently provides outsourcing services primarily to companies in Latin America. The vendor has just 50 employees in the U.S. now. But by 2010, it intends to have as many as 800 people working in development centers in Atlanta, New York and the Miami area, said Dalton Luz, Politec's vice president of corporate affairs.

In April, Politec received an $80 million investment commitment from Mitsubishi Corp., and Luz said the financial infusion is increasing its ability to expand internationally. He added that most of the people who staff the planned U.S. offices will be hired locally.

Brazil's total outsourcing market is about $8 billion annually, according to the Everest Group, a Dallas-based outsourcing consulting firm. But the offshore component—meaning services delivered to companies based outside of Brazil—amounts to only about $700 million, Everest said. By comparison, it added, India's offshore market reached about $40 billion last year. Everest is forecasting that the offshore business in Brazil will increase to $1.25 billion within two years.

Although Portuguese is Brazil's dominant language, English is also widely spoken there, Luz said. Other factors that may make the country an attractive offshoring location for U.S. companies include the relatively similar time zones and the low cost of IT labor in Brazil. One area that Politec focuses on is SAP development work, and Luz said the average annual wages for developers with SAP skills range from $6,000 to $24,000.

Outsourcing vendors based in India are also moving to expand their presence in the U.S. In March, for instance, Tata Consultancy Services Ltd. said it was opening a development center in Milford, Ohio, that eventually would employ about 1,000 people. And last July, rival Wipro Ltd. announced plans to set up four development facilities in the U.S., starting with one in Atlanta that likewise could have 1,000 employees over time.

This story, "Brazilian Outsourcer Politec Looks to Outsource to The U.S." was originally published by Computerworld.

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