Indian IT Firms Tap Latin American Outsourcers For Nearshore Service Providers

Big-name outsourcers in India are now tapping takeover opportunities in Latin America primarily due to nearshore delivery capacity and easier management of outsourcing.

On the condition of anonymity, authorities have told the Economic Times, that service providers in countries like Argentina, Brazil, and Mexico, e.g. Globant are being approached by Indian IT giants. Globant takes in $100 million in revenues and its clients include well-known brands like Adidas, LindkedIn and Citi.

One executive at a major Indian outsourcing firm said, we are looking at strategic tie-ups with nearshore providers like Globant. Although big firms like Citi and GE rely on offshore players from India, smaller clients are seeing a benefit in outsourcing to nearshore providers. These vendors say that nearshore service providers provide similar cost benefits when it comes to back-office work. Proximity to clients is an additional benefit of nearshore locations in Latin America.

One such example may be seen in HNI Corp., a large furniture maker in the U.S. HNI recently picked a small outsourcer in Brazil over a more established outsourcing firm in India due to the variation in time zones. One consultant commented on the deal by saying that although India offers a superior product and has the capability to serve clients in all time zones, some clients are leaning toward vendors who are located nearer.

Amid the current economic climate, Indian firms that are serving local customers or clients at nearby locations, outsourcing firms in countries like Argentina, Brazil and Mexico offer new opportunities for mergers and acquisitions.