Is Spain plus Brazil more effective than India?

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

This is supported by Forrester’s recent research (Spotlight on Spain) which suggests that companies should take another look at Spanish providers. It’s not just about nearshoring capabilities, but also the strong cultural and linguistic ties with Latin America which enable offshoring via Spain.

For European companies new to outsourcing, Spain’s proximity is ideal – offering better collaboration opportunities and closer working relationships – smoothing out the soft issues, which can often prove a barrier to successful outsourcing. With São Paulo as close as 3 hours from Europe (GMT-3) it’s relatively easy to maintain a close working relationship, whilst offshoring to Brazil or other parts of Latin America.

For established, global outsourcers, Spanish providers offer a nearshore complement to existing offshore programmes. The country has a highly-educated labour pool and strong sector expertise, which means it can deal with both complex IT projects, as well as offering staff augmentation solutions.

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 change when compared with European rates.

Forrester does not see the outsourcing issue going away; claiming “there is no doubt that interest in remote IT delivery is in the rise”. So, rather than playing second fiddle to Eastern Europe, Spain’s combination of proximity, skills and flexibility could perhaps see it overtake other outsourcing destinations?

Graham Underwood

Forrester Research Inc. Complementing India With Nearshore Strategies: Spotlight On Spain. 27 February  2009