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Chile aims for the high-end of offshore outsourcing

John Ribeiro | Sept. 29, 2010
A small population limits the country to playing only in niche markets

Analysts think Chile can play an important role in the outsourcing business. "Chile is one of top five popular destinations in Latin America for near-shore and offshore work," said Avinash Vashistha, chairman and CEO of Tholons, an advisory firm for global outsourcing and investments. Despite the small population of the country, Chile has good quality talent for niche work in specialized domains, he added.

Chile has a sophisticated talent pool with pockets of strength in IT applications, IT infrastructure and industry-specific IT implementations, said Anand Ramesh, research director at Everest Research Institute. The country also has top quality infrastructure like roads, telecommunications, and electricity, but it is among the more expensive locations in Latin America, so it is not the place a customer would choose to dramatically cut costs, Ramesh added.

For a large buyer looking to build a global portfolio, Chile's role would most likely be that of a small-scale location with a specialization on higher-value knowledge services or IT activities, Ramesh said. It is unlikely to be the place where the biggest offshoring adopters, like the large U.S. banks, have a thousand or few thousand people doing their work, he added.

Chile has also invested significantly in training staff to speak in English, said Peter Leatherbee, marketing manager at Excelsys, a product company in Santiago that is focused on online banking for small and medium size banks.

Chile's highly educated staff are typically also well trained in English, said Manuel Ravago, research director at Tholons. As the country's services industry is more likely to hire highly educated people, getting people who know English is not a problem in this segment of employees, he added.

India or the Philippines may be cheaper than Chile and similar countries in delivering services, but they may not necessarily be the most capable in delivering specific services, Ravago said. Countries around the world are developing specializations, and Eastern Europe for example is fast emerging as hotbed for clinical research outsourcing, Ravago said. One of the unique advantages of Chile has been its ability to provide niche services or focus on specific industries, he added.

Besides investing in building talent in Chile, the country's outsourcers also plan to tap staff from other countries, Munoz of Chile-IT said. The policies in the country have been liberalized to allow companies to hire workers from abroad. NovaRed's facility in Chile has a mix of locals and people from Argentina and other countries, Bustos said.

As business picks up, Chile, which is politically stable and has a growing economy, also plans to position itself as a conduit or hub for the delivery of services from Latin America to the U.S and other key markets, Munoz said.


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