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Brazil: a competitive software outsourcing destination

Jul 08, 2014 by Oana

The Statue of Christ the Redeemer - Rio de JaneiroFIFA World Cup is approaching the grand finale, and the entire world can't take their eyes off the beautiful country of Brazil. For those of you who are football fans, this is definitely an exciting time for you :) However, you should know that apart from football, coffee and samba, Brazil is also a well-known destination for software outsourcing and information technology services.

Regarded as an alternative to India (in terms of software outsourcing), Brazil has managed in less than a decade to promote itself as a powerful player on the South American outsourcing market, thanks to its notable advantages, such as:

* dynamic and fast growing economy: Brazil is the largest country in South America and also one of the countries with the fastest growing and most dynamic economies at global level, which has boosted the outsourcing sector
* affordable real estate: when it comes to renting business offices, Brazil provides a variety of options at affordable rates, both for prime downtown areas, as well as for suburbs
* affordable software development rates: compared to the USA, software outsourcing to Brazil is more cost efficient. However, in comparison to Asia/Pacific countries (such as: China, India, Philippines) Brazil has higher rates
* "state of the art" telecommunications infrastructure: this sector has received plenty of investments in the last 10 years
* minimal time difference between Brazil and the USA: this results in better communication between the outsourcing company and the customer

These advantages have boosted the Brazilian outsourcing market (which has reached $1.4 billion in 2008), and at the same time have attracted the big players in the industry. So companies such as: Accenture, HP, IBM, Wipro, Siemens, HSBC Global Technologies etc. have found in Brazil “good soil” for outsourcing their businesses.

Apart from these big pluses, Brazil has also a series of disadvantages, such as:

* Low education level, due to a poor educational system:
  - poor language skills, especially English: this can be a difficult problem to surmount, especially because that most of the communication between business outsourcing partners is performed in English
  - low results in STEM (science, technology, engineering, and mathematics) disciplines, which are the foundation of  IT skills: this triggers a low number of IT specialists
  - low literacy rates

* High corporate taxes: this discourages foreign investments
* Low internet coverage: 34% of Brazilians have Internet access, and only 5% have broadband access
* High criminality rate (murders, robberies etc.): same as above, this can be a downsize for possible investors
* Investors need to also take into account that the "work culture" in Brazil can be slightly different than the work rigors and ethics that they are accustomed to

The recent economic recession hasn't left Brazil undamaged, and due to large fluctuations, many foreign investors have pulled their resources from the country. However, Brazil was one of the first countries to emerge from the crisis and see some economic improvement, and according to economic analysts the future looks sunny for this South American country.

All in all, Brazil is not only an exotic country, but also it can be a profitable outsourcing destination for neighboring countries.




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