Hot-on-the heals of acquiring a 55% stake in Brazil’s largest IT service provider CPM Braxis for €233m Capgemini is talking up Latin America as an outsourcing destination.
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In its second annual Executive Outsourcing Survey Latin America was the third favourite region to offshore services.
India was way ahead with 60% of respondents outsourcing there. China was number two with 27% using it as a source of services, but Latin America was not far behind with 25% of those surveyed revealing they received services from the region.
According to the survey, which interviewed 300 senior executives at Fortune 1000 companies, 69% of respondents said the cost of labour was the top reason for offshoring to Latin America. The technology and infrastructure capabilities in Latin America were seen as important attributes by 49%, the skilled labour by 48% and economic stability by 44%.
The survey was carried out online by Harris Interactive.
But like China, Latin america probably needs a Y2K type moment to catch India. The recent recession might help but is unlikely to have as big an impact.
Capgemini said as the economy rebounds, companies are looking to use outsourcing more strategically which includes considering locations beyond India.
Here are recent blog posts about Latin America’s biggest economy Brazil and its potential as a destination for IT services .