Nearshore Americas has learned at least three large US-based companies with global operations are nearing announcements that they will be establishing new shared services operations in Latin America. In one case, the firm is consolidating processes from the US, Canada and Latin American into the new Latin American location. The companies are all attending Shared Services and Outsourcing Week and are establishing captive operations centers.
Details of the three companies’ plans have not been announced, but the general disclosures reinforce the findings of Delotte’s 2011 Global Shared Services research which was also reviewed at Shared Services and Outsourcing Week. The Deloitte presentation called Latin America the new frontier, said that Latin America was the second most popular destination for new centers, and found that companies establishing new facilities in Latin America were likely to be following the growth of Latin markets for their companies’ products.
The three companies have, in passing, either publicly or privately, mentioned that they are in the process of moving or consolidating shared services activities in Latin America.
Other companies, including Sears Holdings, have discussed their plans to shift operations to other locations. Sears is moving certain shared services operations to India and will be outsourcing there with WIPRO.
Confirming Deloitte’s finding that Latin America was “the new frontier” and that activity was following growing business in Latin America, the three companies indicated that their Latin American choices were influenced by where the companies are already actively doing business. They said that they have familiarity with the countries and local business practices, and their location decision was driven, in some way, by the proximity of the new location to existing and growing business activity within the region.
Nearshore Americas expects to be providing detailed reporting on at least two companies’ decision processes and their imminent moves, and has agreed not to make pubic the companies’ names until they are closer to announcing the changes both publicly and internally.
The three companies operate in very different industries. One is a very well known consumer packaged goods company that is establishing a global operations center in Asia with a new regional hub in Latin America. Another is a business-to-business industrial wholesaler consolidating certain hemispheric finance and accounting activities in Latin America. The third is an auto parts manufacturer.
Eric Hochstein is Managing Director of Highstone Associates, Inc., a Barrington, IL-based business and economic development consulting firm, focused on strategy and business development, site selection, and marketing for public and private sector organizations involved in technology and knowledge-based commerce. Between 2003-2010, Highstone Associates represented the province of Ontario for investment attraction in the US in the business services and financial services sectors, including outsourcing.