How does Latin America stack up vs. India in some of the most popular areas of outsourced business services? A new white paper report written by Nearshore Americas’ senior research analyst Luke Bujarski investigates how Mexico and the region overall are drawing more business services due to specific practice area advances.
Creative Services Outsourcing
Latin America and particularly Mexico are emphasized for their strengths in Creative Services Outsourcing (CSO) characterized by gaming, multimedia, and web 2.0 development. High level projects in the range of CSO are increasingly tackled using agile methodology (some 38 percent as cited in the report), which require constant interfacing with outsourced development teams. The report states that “…adoption of Agile software and application development methods have opened a unique opportunity to leverage nearshore IT delivery platforms,” and in addition “Easier project management due to time zone alignment and cultural affinity gives Latin American locales an inherent advantage when it comes to Agile.”
The report explains that market demand and Mexican government initiatives are contributing to support creative services. A physical manifestation of the dynamic is La Ciudad Creativa Digital (CCD), “…a hub for the digital media industry within Mexico. We expect CCD to become the preferred location for Mexican and overseas creative minds to develop content for the Spanish speaking market and deliver high value production services for partners worldwide,” as stated by Carloratti.
Testing and Global Rollouts
Mexico and overall LAC are stressed as big potential players in the live testing market. Of course LAC does not compete with India and the Philippines on strict cost, but those markets are not capable of the live testing ideal for running agile methodologies and reducing time to market.
The report also touches on leveraging nearshore testing for deployment of such projects as a “new mobile phone operating system and the global implementation of a new SAP module” to satisfy demand in Spanish-speaking markets.
Indian offshoring remains dominant; the report however cites that “More than fifty percent of new facilities that opened in 2011 were in nearshore locations either in Latin America (for North America) or Eastern Europe (for European customers).”
The study also notes that outsourcing engagements will become even more virtually managed. The Economic Times figure of a five percent drop in worked performed onsite was drawn upon by the author to conclude that time zone congruency will be even more important.
Misconceptions are also dispelled in the report such as LAC is one market, LAC is the new India, LAC is expensive, LAC is new to outsourcing, and LAC is short on talent.
A region made up of so many diverse countries and regional labor markets within those countries creates strategic opportunities that require thorough investigation. The author details that although the more homogenous animal of India maybe easier to comprehend, Latam and Mexico in particular are given to “new and more complex business functions”, we see continued growth in mobile application development, applications integration and web development tasks out of Latin America. In a recent survey of Mexican service providers, 75 percent noted these three functions as having the greatest growth potential over the next three years.”
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