U.S. outsourcing customers seeking nearshore alternatives to offshore outsourcing hot spots need not look far for the leading options. Mexico is their best bet, according to a new ranking of Latin American outsourcing locations by outsourcing consultancy ThinkSolutions.

“It was no surprise to see Mexico at the top of the list,” says ThinkSolutions partner Tony Mataya. “NAFTA makes trade with Mexico very financially viable, and the cultural influence that comes from sharing a border with a country simplifies business relations.”

Indeed, America’s neighbor to the south boasts 2,000 IT companies, 550,000 trained IT professionals, and a growing labor pool, according to ThinkSolutions.

More unexpected was Chile, Costa Rica, and Argentina, given the size of its labor pool and the attention it has received as a source of IT and business process services. “We were somewhat surprised to see Brazil so low,” says Kate Shearer, a consultant for ThinkSolutions who conducted the research. “[But] at present, Brazil doesn’t offer what Chile or Costa Rica does in terms of cost, language skills or work force availability. Chile and Costa Rica offer stability–both political and economic–although Brazil has pure size of labor pool.”

Brazil’s success in IT and business process outsourcing has its drawbacks for customers–namely demand for labor beginning to outstrip supply. “Particularly in the larger cities, the scarce talent that is available will be expensive,” says Shearer, adding that language and cultural compatibility are also an issue for Brazil. The Portuguese-speaking nation has fewer proficient English speakers and Spanish speakers than its neighbors and “markedly less U.S. influence on its culture compared with the other countries in our top five,” Shearer says.

Meanwhile, Chile’s outsourcing industry is attractive for many reasons. It’s among the most politically stable countries in the region, ranks just behind the U.S. on the annual Corruptions Perceptions Index produced by Transparency International (a non-governmental organization that monitors corruption in international development), and its outsourcing industry has strong government and private sector support, according to the study.

Chile’s main issue is distance–the country is at least a ten-hour flight from North America.

The main appeal of location number three, Costa Rica, is its embrace of Western business practices along with English language proficiency, talented software developers, and an established call center industry, according to the research. But Costa Rica lost points for its relatively tiny labor pool.

ThinkSolutions ranked nearshore service locations based on their financial incentives, people and skills availability, and business environment. It put the least weight on cost-related factors.

“When companies seek nearshore alternatives for sourcing, the main benefits they expect are increased cultural compatibility, skilled labor, and proximity benefits of shorter travel time and time zone alignment,” explains Mataya. “By placing more emphasis on factors that are more relevant to nearshoring specifically, we delineated the best nearshore options. We do not, however, discount financial benefits altogether, and looking at the individual criteria, wages received the greatest weight.”

Other more heavily weighed factors, such as ease of doing business and unemployment rates, can also have affect the total cost of ownership for customers outsourcing to a particular country, Mataya adds.

ThinkSolutions plans to revisit its nearshore rankings quarterly, rather than annually. And Mataya would not be surprised to see some movement among the top ten throughout the year. “We have seen major changes in the outsourcing industry just in the past year,” he says. “Egypt, ranked fourth in A.T. Kearney’s 2010 Global Services Locations Index, is still in the midst of a political uprising which resulted in major setbacks for shared services in the country. Our general thinking is that if impactful factors such as inflation, wages and a country’s political environment do not change annually, why should our model?”

Rankings for countries further down on ThinkSolutions list should remain more stable. It’s unlikely that Nicaragua (#17), Bolivia (#18) or Ecuador (#19) will suddenly shoot to number one. “In an attempt to keep high-risk countries out of the top, we built factors into the final scores that indicate risk, such as corruption and political stability,” Shearer says.

But, Mataya points out, the rankings are not an indication that Mexico or Chile is the best fit for every customer. One outsourcing customer may be willing to take on more risk for lower costs, for example, while another is more comfortable paying more for stability or proximity.

Says Mataya, “Before making a decision about a particular country, it is crucial that companies have a clearly defined set of business objectives and an understanding of the capabilities and availability of a country’s labor force as far as language skills, technical and job-specific skills.”

Source:http://thecostaricanews.com/it-outsourcing-ranking-nearshore-locations-for-us-customers/7891

Outsourcing IT needs could be the key decision in helping your business maximise its potential ; Mark Dryden at Orchid IT explains how smart firms are using outsourced IT services in order to reduce costs, and also what you need to look for in an IT partner.My View THESE days, IT isn’t quite the same black art it used to be.

Business owners were often under the impression that IT was so complex that they would need to employ a fulltime member of staff to look after it.

This is no longer necessarily the case today.

A typical small-to-mediumsized business would historically have employed a dedicated IT person.

He or she would be responsible for looking after complex server set-ups, software updates and general day-to-day issues. Businesses would rely heavily on one person, which in itself would be a dangerous thing to do.

However, now that technology has become more mainstream and readily available, and providing that your IT systems are set up right in the first place, you can quite conceivably outsource your ongoing IT support needs without always needing costly in-house IT staff. As well as the obvious cost savings, outsourcing to an external IT partner will enable you to benefit from a wealth of skills and specialist experience. And crucially, in these difficult economic times, you won’t have to worry about what will happen if your inhouse IT employee is off sick. Outsourcing does away with any other employee-related issues such as pay rises and redundancies. There area number of things to look for in an IT provider.

Your IT provider should provide you with service level agreements and guaranteed response times.

That means you will have the peace of mind that somebody is always available to look after you in the event that something goes wrong at any time.

In addition, a good IT support partner should also provide you with excellent customer service.

This should hold both when things are going well as well as when they do go wrong! Furthermore, a key skill that many IT professionals neglected in the past is communication. That is, the ability to speak in layman’s terms, simply and plainly offering explanations to clients without baffling them with “tech speak”. Likewise, the use of simple and flexible billing methods should always be employed to allow you to budget IT costs over a given period of time.

A wide variety of companies can outsource their IT, ranging from small single sites to larger businesses that are spread over multiple sites, or have complex systems that require 24/7 support. There are still those that have little in-house IT resource or are struggling to support their existing IT infrastructure.

Sadly, in the current climate, those that need to reduce operating costs and do not want the overhead of IT experts.

Despite outsourcing being the preferred option for many businesses, it may not always be the best option.

In some cases, companies need an instant onsite response and dedicated skills. In areas such as bespoke software maintenance, for example, what often works best is a hybrid model combining both employed staff and outsourcing.

Another option that is developing at a dramatic pace is cloud computing.

This is an area of technology that is set to revolutionise the way that we run our IT. In its simplest form, cloud computing means accessing your IT services and systems through the internet.

In the future, you will simply open up a web browser and be faced with your desktop which can be accessed from almost any location through many devices, providing you have internet availability. All the business’s IT systems and data is hosted at a data centre somewhere and the need for in-house IT support will diminish still further. Be warned, however, you will need to have an excellent internet connection with a service level agreement in place and you will also need to ensure your data is held at a secure location.

If you run complex resource hungry software such as AutoCad, then the “cloud” may not work for you.

Finally, you need to consider backup and disaster recovery – how do you know your data is safe? Are your backups happening as they should be? Does your data get stored offsite as well as onsite and how quickly can your business be backup and running in the event of a server failure or disaster? Can your IT partner deliver a business continuity solution that will give you a maximum downtime of 20 to 30 minutes? If you are still using tape then you should seriously review your back-up procedures. Reviewing your IT infrastructure and the way that it is supported should form an integral part of your business strategy. Technology is about business benefits and should be away of leveraging more business for your company – make sure that your business maximises its potential.

If you would like to discuss any of these subjects in more detail, please call Mark Dryden at Orchid IT on 01332 360 099, who will be happy to help.

Source:http://satellite.tmcnet.com/news/2011/10/19/5869478.htm