Topic: Perspectives on the Maturity of Brazil's Offshore Services Market

Brazil has witnessed a steady interest from buyers and service providers for global services. Factors such as a large domestic market, similar time zone to North America, cultural affinity with Europe and North America, and availability of talent pool with distinctive strengths in niche skills have attracted investments for offshore service delivery.

Although the global financial crisis resulted in significant dip in market activity during 2009, activity once again picked up since last year with service providers scaling up their operations in Brazil with more seriousness. This research brief provides a perspective on Brazil’s position as a destination for global services.

Key takeaways:

For buyers, the business case for leveraging Brazil is attractive for situations that require supporting North America or as an entry into domestic markets. Besides IT services, buyers may also consider leveraging Brazil for providing higher order R&D/ engineering services. However, Brazil is unlikely to be effective as a global services hub supporting large scale BPO operations in the near term but has a clear and important role as a delivery center with moderate scale of operations.

For service providers, Brazil presents a credible option to provide IT services due to its vast labor pool, availability of domain skills, and large domestic market for IT services. Although there are some challenges around Brazil’s ability to support very large scaled BPO operations in English at present, there is opportunity in other European languages such as Portuguese and Spanish. Service providers may also consider selective investments in Tier-2 locations for delivery of offshore services from Brazil.

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