Latin America

Critical Factors to Consider Before Selecting a Nearshore Location, Part 9: Putting It All Together | In the News

By | In The News

There is good news for the Latin American and Caribbean countries fighting for nearshore business: there is now more to go around than ever before.

This sentiment is shared by Salil Dani, vice president in the global sourcing service line for the Dallas-based consulting and research company Everest Group. Embracing the nearshore is no longer just a novel idea. He says the service providers in Latin America and the Caribbean are increasingly being viewed as an essential part of the strategies maintained by the Fortune 500 companies that have been in the outsourcing game for decades, such as General Electric, Citigroup, Proctor & Gamble, and Bank of America.

“They are growing a lot in Latin America in particular,” says Dani. “Within Latin America, there could be questions as to whether you want to go to somewhere like Mexico or Costa Rica depending upon what you want to do or other factors. But nearshoring as a proportion is growing in terms of headcount and in terms of revenue. The time-zone alignment creates a huge plus.”

Read more in Finance TnT

Critical Factors to Consider Before Selecting a Nearshore Location, Part 3: Talent Pool | In the News

By | In The News

Ultimately, it is becoming a prerequisite to be business-friendly and politically stable. Countries in Latin America and the Caribbean have advanced monumentally in both regards in recent years, so there are many options to choose from and it’s easy to discard the outliers from consideration. This has been reflected in the reticence companies have shown to enter Argentina and Venezuela during the last decade (not to mention the Philippines currently).

Talent, then, becomes the next differentiator. In some sense, size matters. Simply put, Brazil (with a population of almost 210 million) and Mexico (nearly 130 million) offer more people than everywhere else in the region. While Uruguay or Chile may have an advantage in terms of certain tech skills or overall education levels, when it comes to the ability to scale, there is no competing with the big two.


Salil Dani, a vice president in the global sourcing service line for the Dallas-based consulting and research company Everest Group, breaks it down into two elements: Potential for fast growth versus competition. Going to Mexico City or Buenos Aires means you can fill up seats fast. But you will also likely deal with high employee turnover rates since skilled workers are in high demand and have many options — not just from the services industry but in various other fields.

Read more in Finance TnT

New center setups in Latin America Reaches All-Time High in Q3—Everest Group | Press Release

By | Press Releases

As expected, healthcare and IT outsourcing deals fall, service provider operating margins decline

Latin America was one of the bright spots in the global services industry in Q3 2017, with location activity at an all-time high, driven by a large number of new center setups in Mexico, Colombia and Costa Rica, according to Everest Group. Overall, location activity in offshore and nearshore locations marginally decreased in Q3 (350 transactions) compared to Q2 2017 (374 transactions).

Everest Group discusses these and other third-quarter developments in the sourcing industry in its recently released Market Vista™: Q3 2017 report.

*** Webinar Playback ***

Everest Group held a webinar on November 14 in which the findings of the “Market Vista: Q3 2017” report were reviewed. The webinar also featured a discussion about the attractiveness and risks of Latin American service delivery. To listen to a playback of “Practical Insights: Tips for Managing and Optimizing Service Delivery in Latin America PLUS a 3rd Quarter Market Vista Update,” click here.

Additional Q3 Trends:

  • There was an increase in research and development (R&D) center setups by technology and communications enterprises, reflecting their preference to insource next-generation services.
  • Healthcare outsourcing transaction volume declined due to uncertainty around regulatory changes in the United States.
  • Revenue increased quarter-to-quarter for offshore heritage providers (3.1 percent) but decreased 0.4 percent for global providers overall.
  • Operating margins for offshore heritage providers declined due to appreciation of the Indian rupee; operation margins for most global majors declined, reflective of declining revenue.
  • After reaching an all-time high in Q2 2017 at 49 setups and expansions, Global In-house Center (GIC) activity fell in Q3 to 36 setups and expansions.
  • The share of tier-2 locations increased compared to tier-1 locations.
  • ITO deals and application outsourcing services saw a decline.
  • Among new IT outsourcing deals and GIC center setups, the share of digital services provided increased compared to traditional services provided.
  • There are significant differences in the leading digital services supported by GICs versus those supported by IT service providers. GICs more commonly provide analytics (41 percent), cloud (24 percent) and cybersecurity (20 percent) services, whereas IT service providers offer primary cloud services (58 percent), followed by analytics (13 percent).

“The third quarter global services demand continued to remain sluggish. While on the outsourcing market, we continued to see increase in share of digital deals, number of new GIC setups marginally reduced after an all-time high in Q2 2017. What is interesting in this quarter is the resurgence of Latin America to support global services delivery to North America, with center setups at an all-time high,” said Salil Dani, vice president at Everest Group.

The Market Vista report highlights the trends in the fast-evolving global offshoring and outsourcing market, exploring the key developments across outsourcing transactions and Global In-house Centers (GICs), as well as location risks and opportunities and service provider developments.

***Download a complimentary 12-page abstract of the report findings here.*** (Registration required.)