Capgemini, one of the world’s foremost providers of consulting, technology and outsourcing services, today announced the results of the second annual Capgemini Executive Outsourcing Survey, which found that Latin America is the third most popular outsourcing destination, with 25 percent of responding companies currently outsourcing to this region. While still perceived by many respondents to be an “emerging” outsourcing destination, this survey revealed that Latin America is not far behind legacy outsourcing destination China, which is ranked second at 27 percent, while India leads with 60 percent of companies outsourcing to this country.
The survey, commissioned by Capgemini and conducted online by Harris Interactive, among 300 senior executives at Fortune 1000 companies also identified the top reasons for executives to select Latin America as part of their outsourcing strategy. More than two-thirds (69 percent) of surveyed executives cited cost of labour as the top reason why their company might outsource to Latin America, while other attributes reported included technology and infrastructure capabilities (49 percent), skilled labor (48 percent), and economic stability (44 percent). These attributes are aligned with the key reasons why companies choose to outsource in general suggesting that outsourcing to Latin America will continue to expand.
Other reasons cited as important for selecting Latin America for outsourcing include its proximity to the U.S., time zone alignment and accent neutrality. These attributes are all unique to this region when compared to other outsourcing locations such as China and India.
The Executive Outsourcing Survey findings also revealed that almost half (45 percent) of executives who do not currently outsource to Latin America say their company would be interested in considering the region as a resource for outsourcing in the future.
In addition to uncovering Latin America as a leading outsourcing destination, the survey highlighted the region’s increasing value to the global economy. An overwhelming majority of executives (89 percent) believe that Latin America is an emerging market that will become increasingly important to U.S. businesses, and that there are advantages to doing business in Latin America (83 percent). Further, more than half (56 percent) of executives believe doing business in Latin America is becoming easier than doing business in other parts of the world.
“As the economy rebounds, companies are looking to use outsourcing more strategically as a tool to increase efficiency, yield significant cost savings and drive growth; this includes considering locations beyond India,” said David Poole, Vice President and Head of Americas Business Process Outsourcing, Capgemini. “The expansion of Capgemini’s outsourcing services in Latin America, and our work with Unilever, Coca-Cola Enterprises and other clients in the region underscores our understanding of our clients’ needs and ability to provide the right global delivery model for multinational businesses.”
Other survey highlights include:
The top five factors listed by executives in choosing an outsourcing destination are labor costs (79 percent), technology & infrastructure capabilities (62 percent), skilled labor (61 percent), language proficiency (49 percent) and economic stability (44 percent);
Less important factors listed by executives in choosing an outsourcing location are tax benefits (26 percent) and proximity to the U.S. (3 percent);
Forty-one percent of executives outsourcing to Latin America cited language proficiency as a key reason;
Forty percent of executives cited the average education of the Latin American workforce as a key factor in their decision to outsource in Latin America.
Capgemini’s Business Process Outsourcing organisation applies unique business insight, business intelligence tools and deep domain knowledge to help clients transform business operations. As part of its global delivery model, Capgemini has eight outsourcing centers throughout Latin America, including Argentina, Brazil, Chile and Guatemala.
For more information regarding the Capgemini Executive Outsourcing Survey and to download a summary of the results, please visit http://apps.us.capgemini.com/harrissurve y
Survey Methodology
This Executive Outsourcing Survey was conducted online within the United States by Harris Interactive on behalf of Capgemini between April 6 and April 16, 2010, among 300 senior executives at Fortune 1000 companies. Company revenue and number of employees were weighted where necessary to bring them into line with their actual proportions in the larger universe of Fortune 1000 companies.
All sample surveys and polls, whether or not they use probability sampling, are subject to multiple sources of error which are most often not possible to quantify or estimate, including sampling error, coverage error, error associated with no response, error associated with question wording and response options, and post-survey weighting and adjustments. Therefore, Harris Interactive avoids the words “margin of error” as they are misleading. All that can be calculated are different possible sampling errors with different probabilities for pure, unweighted, random samples with 100% response rates. These are only theoretical because no published polls come close to this ideal.
