Report: LatAm Shared Services Generating Huge Savings for US Firms

Nearshoring is growing and shared services providers are graduating from purely transactional models to a broad range of higher value-added services.

shared services

Latin America has become a premier destination for shared services, with U.S. firms saving up to 60% in operating costs, according to a study by outsourcing consulting firm Auxis.

The consulting firm, which claims to have collected responses from over 30 service centers, says nearshoring is growing and service providers are graduating from purely transactional models to a broad range of higher value-added services.

“U.S. companies that have chosen a Latin America location for back office support have typically realized cost savings ranging from 30% to 60%,” the report noted. According to Auxis, the savings opportunity can be even higher depending on the city in the United States and the selected location in Latin America.

The report reveals that, on average, a five-year-old shared services center (SSC) in Latin America will have employed about 150 people and is operating in seven different countries. A large majority of operators serve the Spanish-speaking market, although more than 50% of them provide services in English as well.

More than 65% of surveyed SSCs serve countries in Latin America. In Brazil, 78% of SSCs are only serving domestic customers. In terms of processes, more than 65% of respondents said they would like to outsource information technology services, and 100% of the multi-function respondents are providing finance and accounting services.

According to the report, SSCs will expand in the coming months, and the outsourcing trend will grow as centers become more mature and shift their focus to more value-added and analytical processes.

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