The reason I like what Alex says below, is he highlights a trend that is becoming more and more prevalent in today’s competitive sourcing market. Simply put, the decision of which provider or vendor to go with, may be more important to the success of your project than the choice of which location to set up in. When I say ‘location’, I don’t mean large geographic regions like Asia, Eastern Europe, Latin America or Southeast Asia. I mean specific countries within those regions, between which there’s often little difference.
Latin America has an issue with inflexible labor laws, it’s true. But as Alex says, the burden is on companies to find ways to still be competitive within that framework. And they’re doing it very well. Take a look at this article by DJ Edgerton, CEO of Zemoga, a media development firm based in the US and Colombia. He calls it “The Digital El Niño” – the huge wave of innovation and creative talent coming out of Latin America, building up to a high temperature situation, just like its namesake.
It’s important to realize that it’s that innovation and increased productivity which is making the region attractive to US clients, and not the same old arguments for time zone and proximity that LatAm investment promo agencies repeat over and over. Things like language, cultural affinity and technical skill in lean, agile and open source software development – these are the drivers for Latin America’s ever increasing outsourced market share. These are things that providers must focus on.
As Edgerton says, “US agencies must adopt a new paradigm and cast off the stoic we-can-do-it-all model by tapping into collaborative resources around the globe, not just around the block. By openly collaborating with experts and service providers that best suit their clients' needs – regardless of geography – progressive, agile US agencies can, and should, leverage worldwide digital innovation expertise to complement in-house capacity and deliver the results their clients expect”.
And it’s not just the outsourced talent that firms are looking for. There are large untapped markets in Latin America itself that companies are going after. Consider the burgeoning domestic market in Brazil for example. Google has made the Brazilian city Belo Horizonte its LatAm headquarters. Why? In order to localize and manage its social networking website Orkut, which is more popular than Facebook in Brazil.
“The agencies that collaborate with talent in other regions will wield a diverse set of resources and management prowess that will enable them to oversee a multimedia, integrated approach, and provide more efficient delivery models”, says Edgerton. “Those that refuse might drown in the LatAm tide”.
What great imagery.