Thanks to TCS, Latin America turning out to be an IT services hub
A survey conducted by the global business research and consulting firm Frost & Sullivan reveals that despite the global economic slump, the information technology and BPO services continue to provide big business opportunity in Latin America. Contrary to the prevailing situation in Europe and the USA, where the business has been hit worst, IT infrastructure outsourcing services experienced a healthy growth of 11.3 per cent in Latin America during 2009 and the research predicts that the trend is likely to remain the same in 2010.
Quoting the survey report, an industry related publication says that it has been further suggested that the positive market conditions in Latin America has led to a steep competition among global IT firms, including IBM, Accenture, HP, SAP, Oracle and Microsoft. At the same time, the Frost and Sullivan survey report says hints that even local IT firms like Brasil Telecom, Ci&T, Stefanini, Tivit, Chile IT and Sonada also have considerable market share in the region.
The recently released study mentions the boom in the IT and BPO business in Latin America, which serve as nearshore facilities to serve clients in the US, has even led India’s largest IT services firm Tata Consultancy Services (TCS) to enter the market in a significant manner. The Indian IT major has already made its presence felt in Latin American nations like Mexico, Brazil, Uruguay, Colombia, Peru and Argentina in a big way. As of now, it employs more than 7,500 local employees. According to the Latin American CEO of TCS, Henry Manzano, their employee strength in the region is expected to escalate to 10, 000 by the end of the current financial year. In fact, TCS has further strengthened its foothold in the region by acquiring Camircom, a Chilean IT firm, in 2005.
In a recent interview, Manzano pointed out that the close relationship shared by TCS with Latin American universities and technical institutions has helped them to employ highly trained local professionals who are at ease handling issues in the local language.
At the same time, the senior TCS executive for Latin America said that they have categorized the customers in the region into two distinct groups. While the first group comprises local firms that are keen to augment their competence through IT implementation, the second group comprises multinationals from the US who outsource their work to Indian IT services vendors. He said that having a strong presence in Latin America has helped TCS to win more contracts because they are now able to serve their US clients in real time owing to their facilities being located in the same time zone as well as their proximity to the US.
According to Fernando Belfort, market analyst at Frost & Sullivan, the tax incentives offered by the governments as well as low operational costs in the region have been luring several foreign IT firms to set up their facilities in Latin America. While Argentina has been attracting foreign companies with its vast pool of talented and affordable workforce, Brazil is in the center of attraction keeping in view the 2014 FIFA World Cup and the 2016 Olympics scheduled to be held in Rio de Janeiro.