Outsourcing to South America

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Top Contributors Maximiliano De Muro Related Articles Outsourcing to China Software as a Service

This article describes a concept which could impact a variety of companies and industries. The article lists companies that could benefit or be harmed by the trend. To see what companies and articles reference this concept page, click here.

After the boom of places like China and India as a top "SaaS provider" to USA and Europe, South America is rising as a new player is on the horizon.

A typical outsourced project may be comprised of a team with 10 to 20 percent of its members located at the customer site and 80 to 90 percent of the team at offshore development centers, thus saving the clients labor costs.

Uruguay as a top offshore location in South America

Uruguay is nowadays the most important software exporter in South America. With a population of 3.2 million, Uruguay appears to be before Brazil and Argentina in terms of software exportation and off shoring.

Companies such as the Indian TATA Consultancy Services (TCS) have chosen Uruguay to open important development centers. Currently, TCS employs more than 1000 people in Uruguay and has transferred from India to Uruguay clients like AMEX and Bank of America.

But, why Uruguay? Uruguay has the highest rate of literacy in Latin America and was the first country in Latin America in adding to the university programs, the career of Computer Science in 1967.

The workforce in Uruguay is highly qualified and mostly multilingual. The political and economic situation in Uruguay is, after Chile, the most stable in the continent and the geographical location allows giving support to costumers in North America and Europe during they operational hour.

The Uruguayan government has declared the software industry of “national interest” and has taken important measures promoting the IT education and helping the software companies with their Tax obligations.

Uruguay has appeared in the scene as the perfect balance between quality and low cost having as it main competitive advantage the quality and know how of its Human Resources.

Some numbers (According to IDC)

• Uruguay is the most important software developer in South America, exporting 6 times Brazil’s software exportations and 3 times Argentina’s and Chile’s.

• By 1998 Uruguay exported software for more than U$S 60 millions ; by 1999 the industry grew a 28, 1% reaching U$S 76,8 millions and by 2000 the exports finally reached the U$S 80 millions.

• By 2005 the exports reached more than U$S 100 millions, 20 times what have been exported 10 years ago.

• The projection up to 2010 is to export U$S 500 millions.

• Nowadays, the software industry employs over 10,000 people (without taking into account freelancers). The projection for 2010 is to employ 15,000 people.