Basel Outsourcing

Bhavini Raithatha

Archit Patel

Shuang Han

Eric Zaccaro

Leo Bozzuto

Group #2

Introduction to Brazil

Stable Economic Growth - Third fastest-growing economy of the decade

Strong 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 world's 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

Political Stability - Current ruling party rules since 3 terms.

Brazil is Booming

Geography

• 5th largest country in s i ze and populati on.

• Borders a lmost every country in South Amer ica

• Close prox imity to US re lati ve to other outsourc ing desti nati ons . a . Less t rave l ti me & cheaper t rave l l ing expenses . b . S imi lar ti me zone: Greater fl ex ib i l i ty in contact . c . Enhanced Super v is ion capac i ty.

•Tour i sm Ranks 2nd among Lati n Amer ica countr ies .    

Countries with Area >4 Million km2

Countries with population >100 M

Countries with GDP >US$ 1.5 Trillion

Human & Economic Factors:

Economic Factors :

• Predicted to be Third fastest-growing economy in this decade.

• Ranks 7th in GDP Growth rate – 7.5 % - Fastest growing country in past 20 years.

• Trade surplus of $20B, with US accounting for 9.6% of total exports.

• Brazil produces more oil than it consumes.

• Unemployment rate at historic lows – 7.1 %.

• Emerging as a major outsourcing destination- 13.3% of world (Avalon Research)

• Latest ratings: “AAA” from S&P.

• Over the past four years, exports of Brazilian products and services have doubled.

Human Factors: 

• Highly ranked IT professionals - 1.7 MN IT workers; over 0.1 MN ICT graduates per every year.

• Second-highest number of English speakers (10.2 million).

• People with well-developed soft skills - furthering productivity, relationship-based culture is major advantage over China/India. (i.e. less process-driven)

• Cultural match with the US.

Vendor capabilities

4,000+ domestic IT companies.Major outsourcing services offered:

BPO

IT Consulting

Applications Development

Remote Infrastructure Management

Risk Analysis & Management.

50+ Multinational IT companies:

USP of Brazil: Pay For Use Model

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 world's 8th largest producer of information technology services.

Risks & Solutions

Risks

• High Costs

• Weak Infrastructure

• Weak language skills.

• Progressive shortage of IT Professionals.

• 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.

Solutions

• Government Support.

• Improving language skills.

• Second-tier cities.

• Open Source solution.

Brazil

Canada

Chile

Costa Rica

Caribbeans

Mexico

China

India

Rest of Asia

Eastern Europe

0.0% 50.0% 100.0%

CHANGING OUTSOURCING SCENARIOS

Brazil

Canada

Chile

Costa Rica

Caribbeans

Mexico

China

India

Rest of Asia

Eastern Europe

0.0% 50.0% 100.0%

CURRENT OUTSOURCING SCENARIO

Conclusions

Go Green…Go Growth…Go Brazil…

Conclusions

Brazil's IT-BPO infrastructure is the best among BRIC countries.

- Economist Intelligence Unit

Supervision Control

Time Zone Proximity

Graphical Proximity

Linguistic Similarity

Cultural Similarity

Political/Economical Alignment

0.00% 10.00% 20.00% 30.00% 40.00% 50.00%

Critical Factors

References

• 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)

Obrigado…

Our outsourcing experience

The Process

• Market Research

• Our strategy for posting the

advertisement

• Timeline.

• Result – Multitude of bidders:

• Communication with the

contractor

• Delivery of the Job

The outcome

India /

Southern Asia

North America

Eastern Asia

Latin & South America Total

No. of offers 9 5 2 2 18

Average Price (US$) 52.8 64.8 38.5 63.0 55.7

Quality of offer description Good Excellent Poor Very Good Good

Current level of membership of contractors

3 years 2.5 years 5 months 11 months 1.75 years

Availability of samples 75% 50% 50% 50% 56%

Competency(Based on no of samples received)

Very good Excellent Moderate Excellent Very Good

Median time taken for replying

14 hours 1.5 hours 15 hours Less than 1 hour 5.5 hours

• Price: $ 54

• Incentive: $ 60

• Total: $ 114