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Outsourcing Brazil

Outsourcing Brazil

Published in: Business, Travel

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  • 1. Group #2 Bhavini Raithatha Archit Patel Shuang Han Eric Zaccaro Leo Bozzuto
  • 2. Introduction to BrazilStable Economic Growth - Third fastest-growing economy of the decadeStrong Social structure - Massive multicultural population. • Staging 2014 World Cup & 2016 Summer Olympics.Strong Domestic Markets - 5th largest in population. • Decreasing poverty rate - from 17.2% to 3.1% in last 30 years.Vast and diverse natural wealth: • 11th largest crude oil reserves – recently made the worlds biggest oil discovery • Over 300 million hectares of agricultural land in privileged geographic conditions.Country of renewable, clean and abundant energy • 98% population has access to electricity. • Most advanced renewable energy utilization – 46% of energy production from renewable sources Brazil is BoomingPolitical Stability - Current ruling party rules since 3 terms.
  • 3. Countries with population >100 M Countries with Area >4 Million km2Countries with GDP >US$ 1.5 Trillion
  • 4. Human & Economic Factors: • Highly ranked IT professionals - 1.7• Predicted to be Third fastest-growing economy in MN IT workers; over 0.1 MN ICT this decade. graduates per every year.• Ranks 7th in GDP Growth rate – 7.5 % - Fastest growing country in past 20 years. • Second-highest number of English speakers (10.2 million).• Trade surplus of $20B, with US accounting for 9.6% of total exports. • People with well-developed soft• Brazil produces more oil than it consumes. skills - furthering productivity, relationship-based• Unemployment rate at historic lows – 7.1 %. culture is major advantage over China/India. (i.e. less process-driven)• Emerging as a major outsourcing destination- 13.3% of world (Avalon Research) • Cultural match with the US.• Latest ratings: “AAA” from S&P.• Over the past four years, exports of Brazilian products and services have doubled.
  • 5. Vendor capabilities4,000+ domestic IT companies. Major outsourcing services offered:  BPO  IT Consulting  Applications Development50+ Multinational IT companies:  Remote Infrastructure Management  Risk Analysis & Management. USP of Brazil: Pay For Use Model
  • 6. Benefits of IT sourcing• Low Cost:  A typical wage of a Brazilian software professional = 43 % of U.S. resources.• Strong Laws:  Stern Intellectual Property Regulations as compared to China and India.  Strict regulatory requirements in financial services.• Strong IT Infrastructure:  30 major technology parks throughout over different sectors of the economy. 17 are under implementation and 32 are being projected.  100% usage of Digital fiber optic networks across the country.• Strong R&D facilities:  Google, Motorola, GM, Fiat, Microsoft have large investments in R&D. Brazil is the worlds 8th largest producer of information technology services.
  • 7. • High Costs • Government Support.• Weak Infrastructure • Improving language skills.• Weak language skills. • Second-tier cities.• Progressive shortage of IT Professionals. • Open Source solution.• High Inflation and De-valuation of the Brazilian currency, the Real.• The exchange rate of Real to USD is increasing.• Significant needs of money on investment.
  • 8. CURRENT OUTSOURCING CHANGING OUTSOURCING SCENARIO SCENARIOS Eastern EuropeEastern Europe Rest of Asia Rest of Asia India India China China Mexico Mexico Caribbeans Caribbeans Costa Rica Costa Rica Chile Chile Canada Canada Brazil Brazil 0.0% 50.0% 100.0% 0.0% 50.0% 100.0%
  • 9. Conclusions Critical FactorsPolitical/Economical Alignment Cultural Similarity Linguistic SimilarityGraphical ProximityTime Zone ProximitySupervision Control 0.00% 20.00% 40.00% 60.00% Brazils IT-BPO infrastructure is the best among BRIC countries. - Economist Intelligence Unit
  • 10. • BRASSCOM• Organization for Economic Co-operation and Developments (OECD)• New York Times• Computer Weekly• Stratfor Global Intelligence• Economic Intelligence Unit - The Economist• UConn library Resource• Sourcing Brazil• Vision TRE• Next Energy News• World Bank• US - Energy Information Administration (EIA)
  • 11. Obrigado…
  • 12. India / North Eastern Latin & South• Market Research Southern Total America Asia America Asia• Our strategy for posting the No. of offers 9 5 2 2 18 advertisement Average Price 52.8 64.8 38.5 63.0 55.7 (US$)• Timeline. Quality of offer Good Excellent Poor Very Good Good description• Result – Multitude of bidders: Current level of• Communication with the membership of 3 years 2.5 years 5 months 11 months 1.75 years contractors contractor Availability of 75% 50% 50% 50% 56%• Delivery of the Job samples Competency (Based on no Very good Excellent Moderate Excellent Very Good of samples• Price: $ 54 received)• Incentive: $ 60 Median time 1.5 taken for 14 hours 15 hours Less than 1 hour 5.5 hours hours• Total: $ 114 replying