It seems that Spain’s star is finally on the rise in the outsourcing world.

It seems that Spain’s star is finally on the rise in the outsourcing world. Too long in the shadow of India and Eastern Europe as near and offshore solution, Spain is now becoming the thinking company’s destination of choice.

Forrester’s recent research (Spotlight on Spain ) supports this claim by suggesting that companies should take another look at Spanish providers. The country has a large, highly-educated labour pool, sector expertise and relatively low labour costs. So Forrester argues that, for established and new outsourcers, Spanish providers offer a nearshore complement to existing offshore programmes in countries such as India. In the financial services sector we are increasingly seeing experienced Spanish resources being used to support complex IT projects such as business process redevelopment and IT transformation.

Compare this with India where the outsourcing sector is suffering from attrition, wage inflation and skills shortages, meaning that its cost advantages are beginning to narrow against European rates. Add Spain’s strong cultural and linguistic ties with Latin America, which allow the potential to scale and Spain, plus somewhere like Brazil, start to seem a good alternative to India or Eastern Europe.

So, for European companies, Spain’s proximity is ideal – offering better collaboration opportunities and closer working relationships – smoothing out the soft issues, such as management overheads and repeated internal change requirements, which can affect any programme.

In the financial services sector, with São Paulo (Latin America’s financial centre), as close as 3 hours from Europe (GMT-3) it’s relatively easy to maintain a close tie with an outsourcing partner and benefit from the likelihood of an improved cultural fit between the two enterprises.

Forrester sees the issue of how and where to outsource continuing in these straightened economic times; claiming “there is no doubt that interest in remote IT delivery is in the rise”. With compliance issues driving outsourcing in the financial services sector, enterprises need to be sure they have the most efficient, and therefore cost-effective, outsourcing strategy. Perhaps now is the time to consider a Spain plus Brazil alternative to traditional outsourcing destinations?