Latin America Redefines How U.S. Companies Think About Outsourcing

February 22, 2011

Although outsourcing carries a negative connotation for U.S. companies and for American workers, the thought of nearshoring to Latin America is getting to be more or less acceptable.To some people, outsourcing is the equivalent of taking away American jobs. However, President Obama tried to describe that as old adage when he visited India last year. One region that is gaining a significant amount of importance is Latin America. Because it is not so far away from U.S. soil. And it doesn’t sound as threatening as faraway destinations like India or China.

American companies are now hesitant to engage in business with Indian or Asian firms because people might think that they are outsourcing jobs to these places. This is particularly true of IT functions. But this is not to deny that Indian companies like Wipro and Infosys have been taking care of IT in an efficient manner for the last decade or so.

As a result of this new aversion to offshoring, the concept of nearshoring has taken center stages. U.S. companies are developing outsourcing markets in Latin America. It is redefining how U.S. companies think about outsourcing.

Many U.S. firms have now begun to take advantage of foreign suppliers from Latin America. Companies in this region are getting involved in business support and building new markets for American companies. The region is also filling the role of a major IT player with the likes of Chile, Argentina and Brazil. Brazil, especially is thought to have many young skilled workers that can contribute to the IT industry. Apart from that, these are three examples of thriving economies.

Some of the favored parameters offered by Latin American companies include similar culture, time-zone compatibility and tech –savvy demographics. When considering the impact of Latin America on U.S. businesses, it is about building partnerships that can maximize performance and cut costs for American businesses.


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