Tag

nearshore

Talent Tops Lithuania’s Impressive List of Assets | In the News

By | In The News

When UK-based financial markets consultancy Catalyst Development were choosing a location for their first nearshore consulting hub earlier this year, they looked at Belfast, Limerick, Dublin, Galway, Tallinn, Warsaw, and Wrocław.

Sean Coote, managing consultant at Catalyst Development spent three months in Lithuania, which ended up being the company’s pick, looking at talent accessibility, infrastructure, office space, IT development, meeting with financial tax and legal firms.

Anurag Srivastava, vice president at Everest Group says that Lithuania is not a location where you would set up a 2,000-5,000 employee centre to support contact centre or IT-Infrastructure or transactional business process work.

Read more in Emerging Europe

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 8: Governmental Agencies and Support | In the News

By | In The News

With so many destinations now trying to attract nearshore business, it is clear that promotion matters. These days, say the analysts, any country that wants to be a serious player needs to be investing in this side of the game.

Costa Rica has been at the vanguard for the better part of a decade. Its CINDE agency has piggybacked on the positive ecotourism and safety reputation of the country to bring in foreign executives and get them to quickly sign on the dotted line with business-friendly incentives.

Colombia is showing progress in this area as well. Though its mission goes far beyond the services sector, the government changed the name of its promotion agency from ProExport to ProColombia a few years ago, and its efforts have helped to start to change the perception of the country from scary to business friendly.

In 2008, Trinidad and Tobago proved to be forward thinking by forming a specialized agency — the Trinidad and Tobago International Financial Centre (T&T IFC) — to attract more financial sector companies.

Salil Dani, a vice president in the global sourcing service line for the Dallas-based consulting and research company Everest Group, notes that companies are hearing this message and appreciate both the pitches that governments make and the initiatives they establish to train workers. “Companies are realizing the potential that nearshore locations offer beyond just traditional functions,” says Dani. “Accordingly, the governments and promotion agencies are taking some steps. A lot still has to be done. But they are taking some steps to make the talent ready for these next-generation skills.”

Read more in Finance TnT

Is Mexico Losing its Luster as a Nearshore Delivery Location? | Sherpas in Blue Shirts

By | Blog, Onshoring

Over the years, Mexico has become an attractive nearshore delivery location for U.S. enterprises and service providers. But two significant potential challenges may impact its popularity.

NAFTA

To boost economic ties, Mexico, Canada, and the United States entered the North American Free Trade Agreement (NAFTA) in 1993. However, NAFTA critics argue that it has resulted in job losses and suppressed wages in the U.S., and encouraged illegal migration of workers from Mexico into the U.S. The Trump administration is considering withdrawing the U.S. from NAFTA due to ‘protectionist’ measures, i.e., those that are in the interest of U.S. domestic market.

The proposed outsourcing tax/Border Adjustment Tax (BAT)

To further promote and create jobs in the U.S., President Trump has proposed incentivizing companies to make goods domestically by adding a tax – an outsourcing, or border adjustment tax (BAT) – on companies that import goods and services from other countries. He has floated the idea of 20-30 percent BAT on imports.

While the actual impact of impending renegotiations on NAFTA and potential implementation of the BAT on Mexico as a nearshore service delivery location is yet to be seen, Everest Group conducted research to determine the likely short-term effect of these developments on the IT-BP industry in Mexico. Following are snapshot findings from our study.

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Further, while there are multiple alternative locations in Latin America available to U.S. enterprises, very few offer a significantly better cost-talent proposition than Mexico. Thus, even in the likely scenario of NAFTA revocation, Mexico is not likely to lose its sheen as an attractive nearshore location for IT-BP service delivery for U.S.-based organizations.
Although there are no favorable indicators in the short-term, there have been no knee-jerk reactions from firms leveraging Mexico for service delivery. We believe the country’s medium- to long-term outlook continues to remain positive for IT-BP services delivery.

For more detailed findings, please read our report: “Mexico IT-BP Services Viewpoint.”