This document discusses establishing a presence in the US market for nearshore outsourcing. It covers the basics of global services outsourcing and identifies key nearshoring opportunities, such as agile software development and targeting the large Spanish-speaking consumer market in the US. Establishing a physical presence in the US through a registered agent service and virtual office is recommended to gain credibility with US clients, despite not requiring US residency. Key considerations for breaking into the US market include defining target clients and services, and effectively communicating your value proposition.

1. NEARSHORE OUTSOURCING &
ESTABLISHING PRESENCE IN THE U.S.
MARKET
Presenter: Luke Bujarski, Senior Research Analyst
Nearshore Americas

2. AGENDA
INTRODUCTIONS
GLOBAL SERVICES BASICS
NEARSHORING SWEETSPOTS
ESTABLISHING A PRESENCE IN THE U.S.

3. Gabriel Rozman Blanca Trevino Marco Stefanini
TCS Softtek Stefanini

4. WHY DO COMPANIES OUTSOURCE & OFFSHORE?
Cost Savings
Access to Focus on Core
Talent Business
Expansion into
new markets

5. WHAT SERVICES ARE WE LOOKING FOR?
Cost Savings
Contact
IT services Centers
(voice)
Access to Focus on Core
Talent Business
Knowledge
Back office
Process
BPO
Outsourcing
Expansion into
new markets

6. WHAT IS GLOBAL SERVICES OUTSOURCING?
Software development
Infrastructure
Cost Savings
Helpdesk support
Web & Apps development
Applications Support
Gaming Contact
Mobility IT services Centers
(voice)
Access to Focus on Core
Talent Business
Knowledge
Back office
Process
BPO
Outsourcing
Expansion into
new markets

7. WHAT IS GLOBAL SERVICES OUTSOURCING?
Software development Cost Savings
Infrastructure Customer Support
Helpdesk support Inbound/Outbound Sales
Web & Apps development Social Media
Applications Support Contact Chat
Gaming IT services Centers
(voice)
Access to Focus on Core
Talent Business
Knowledge
Back office
Process
BPO
Outsourcing
Expansion into
new markets

8. WHAT IS GLOBAL SERVICES OUTSOURCING?
Software development Cost Savings
Infrastructure Customer Support
Helpdesk support Inbound/Outbound Sales
Web & Apps development Social Media
Applications Support Contact Chat
Gaming IT services Centers
(voice)
Access to Focus on Core
Talent Business
Knowledge
Back office
Process
BPO
Finance & Accounting
Outsourcing
Human Resources
Travel Expenses
Expansion into
new markets

9. WHAT IS GLOBAL SERVICES OUTSOURCING?
Software development Cost Savings
Infrastructure Customer Support
Helpdesk support Inbound/Outbound Sales
Web & Apps development Social Media
Applications Support Contact Chat
Gaming IT services Centers
(voice)
Access to Focus on Core
Talent Business
Knowledge
Back office
Process
BPO
Finance & Accounting
Outsourcing Data Analytics
Human Resources Market Research Services
Travel Expenses Legal Process outsourcing
R&D
Expansion into
new markets

10. GLOBAL SERVICES INDUSTRY
- Total Global BPO/ITO Spend – USD 389 Billion 2012
- U.S. market accounts for 45 percent of market
- Global market growth: 5.3% CAGR ; U.S. 4.2% source: IDC

11. USD 70 Billion USD 837 Billion USD 920 Billion USD389 Billion
Source: Global Source: IMS Health Source: Data Monitor Source: Gartner 2012
Industry Analysts 2009 2009
Inc.
2015 forecast

12. GEOGRAPHY OF OUTSOURCING
ONSHORE/DOMESTIC OFFSHORE NEARSHORE
GLOBAL DELIVERY
OUTSOURCING OUTSOURCING OUTSOURCING
Better ICT Cost Arbitrage Proximity 24 hr delivery
Economies of Scale Access to skills Time Zone Alignment  Multinationals
Tax incentives  Access to experience  Cultural Affinity  Results not Geography
Property costs

13. OUTSOURCERS IN LATIN AMERICA
WESTERN MULTINATIONALS
INDIAN MULTINATIONALS
LATIN AMERICAN MULTINATIONALS
LATIN AMERICA SMEs

14. NEARSHORING SWEET SPOTS
Latin America Outsourcing – Drivers:
AGILE SOFTWARE DEVELOPMENT
SPANISH CONSUMER MARKET IN THE U.S.
DOMESTIC MARKET DEMAND
GROWTH IN BUY-SIDE SME MARKET

15. AGILE DEVELOPMENT FOR SOFTWARE
 Testing Lower costs
 Mobile  Better quality
 UX design  Faster speed to market
 Custom work
“We tried Agile with India, but
“38 percent of businesses employee turnover got to the
small and large now use Agile
point of ridiculousness.” - Chris
methods in software and
application development”- Snyder CIO Hulcher
Forrester Research Engineering

16. U.S. SPANISH SPEAKING MARKET
Population Distribution by Ethnicity
Total Population: 311 million
Total Latino: 52 million
Foreign Born: 21 million
Percentage Spanish Only: 77 %
Data Sources: U.S. Census Bureau; Pew Research Center

17. DOMESTIC / PAN AMERICAN DEMAND

18. SMALL TO MEDIUM MARKET

19. SMALL TO MEDIUM MARKET
WHY IS NEARSHORE IDEALLY SUITED FOR THE SME MARKET?
 More pressure to reduce costs – lack of market diversity
 Less competition from multinationals (global delivery)
 Decision to outsource is easier
 Work with multiple vendors for specific functions – i.e. web
development, contact center, IT infrastructure
 Need for customized more flexible services
 Hesitant to work with offshore (India)
 Requires localized sales and support, but not delivery

20. WHERE DO I FIND SMEs?

21. WHO IS COLOMBIA’s COMPETITION?

22. EVALUATING OUTSOURCING MARKETS
I AM A BUYER/VENDOR INTERESTED IN LATIN AMERICA, WHERE DO I GO?

24. SHARE OF EXPORTS VS. DOMESTIC MARKET SERVICES
COLOMBIA MEXICO
TOTAL REVENUE 2011: IT/BPO – 2.2 BILLION TOTAL REVENUE 2011: IT/BPO – 12.25 BILLION
Annual Growth 15-20 % Annual Growth 12-15 %

25. QUESTION: Can I open a sales office in the
united states without actually being there?
ANSWER: YES!
US citizenship and residency is NOT required.

26. Where should I set up an office?

27. Five Steps To Starting a Business in the U.S.
1. Choose a city that fits your needs
2. Find a Registered Agent service
3. Incorporate as LLC or Corporation
4. Find a start-up incubator, establish a
reputable street address
TOTAL MONTHLY COST TO MAINTAIN AN OFFICE IN THE US - $200 - $500

28. BREAKING INTO THE US MARKET
THINGS TO THINK ABOUT:
 TARGET CLIENTELE?
 TARGET SERVICE OFFERING?
 ESTABLISH A DIRECT PRESENCE IN THE US?
 HOW DO I PORTRAY AN EFFECTIVE MESSAGE?

29. QUESTIONS