Outsourcing Brazil

1. Group #2
Bhavini Raithatha
Archit Patel
Shuang Han
Eric Zaccaro
Leo Bozzuto

2. Introduction to Brazil
Stable Economic Growth - Third fastest-growing economy of the decade
Strong Social structure - Massive multicultural population.
• Staging 2014 World Cup & 2016 Summer Olympics.
Strong Domestic Markets - 5th largest in population.
• Decreasing poverty rate - from 17.2% to 3.1% in last 30 years.
Vast and diverse natural wealth:
• 11th largest crude oil reserves – recently made the world's biggest oil discovery
• Over 300 million hectares of agricultural land in privileged geographic conditions.
Country of renewable, clean and abundant energy
• 98% population has access to electricity.
• Most advanced renewable energy utilization – 46% of energy production from
renewable sources Brazil is
Booming
Political Stability - Current ruling party rules since 3 terms.

3. Countries with
population >100 M
Countries with
Area >4 Million
km2
Countries with GDP >US$ 1.5 Trillion

4. Human & Economic Factors:
• Highly ranked IT professionals - 1.7
• Predicted to be Third fastest-growing economy in
MN IT workers; over 0.1 MN ICT
this decade.
graduates per every year.
• Ranks 7th in GDP Growth rate – 7.5 % - Fastest
growing country in past 20 years. • Second-highest number of English
speakers (10.2 million).
• Trade surplus of $20B, with US accounting for
9.6% of total exports.
• People with well-developed soft
• Brazil produces more oil than it consumes. skills - furthering
productivity, relationship-based
• Unemployment rate at historic lows – 7.1 %. culture is major advantage over
China/India. (i.e. less process-driven)
• Emerging as a major outsourcing destination-
13.3% of world (Avalon Research)
• Cultural match with the US.
• Latest ratings: “AAA” from S&P.
• Over the past four years, exports of Brazilian
products and services have doubled.

5. Vendor capabilities
4,000+ domestic IT companies. Major outsourcing
services offered:
 BPO
 IT Consulting
 Applications
Development
50+ Multinational IT companies:  Remote Infrastructure
Management
 Risk Analysis &
Management.
USP of Brazil: Pay For Use Model

6. Benefits of IT sourcing
• Low Cost:
 A typical wage of a Brazilian software professional = 43 % of U.S. resources.
• Strong Laws:
 Stern Intellectual Property Regulations as compared to China and India.
 Strict regulatory requirements in financial services.
• Strong IT Infrastructure:
 30 major technology parks throughout over different sectors of the economy. 17 are under
implementation and 32 are being projected.
 100% usage of Digital fiber optic networks across the country.
• Strong R&D facilities:
 Google, Motorola, GM, Fiat, Microsoft have large investments in R&D.
Brazil is the world's 8th largest producer of
information technology services.

7. • High Costs • Government Support.
• Weak Infrastructure • Improving language skills.
• Weak language skills. • Second-tier cities.
• Progressive shortage of IT Professionals. • Open Source solution.
• High Inflation and De-valuation of the
Brazilian currency, the Real.
• The exchange rate of Real to USD is increasing.
• Significant needs of money on investment.

8. CURRENT OUTSOURCING CHANGING OUTSOURCING
SCENARIO SCENARIOS
Eastern Europe
Eastern Europe
Rest of Asia
Rest of Asia
India India
China China
Mexico Mexico
Caribbeans Caribbeans
Costa Rica Costa Rica
Chile Chile
Canada Canada
Brazil Brazil
0.0% 50.0% 100.0% 0.0% 50.0% 100.0%

9. Conclusions
Critical Factors
Political/Economical
Alignment
Cultural Similarity
Linguistic Similarity
Graphical Proximity
Time Zone Proximity
Supervision Control
0.00% 20.00% 40.00% 60.00%
Brazil's IT-BPO infrastructure is the best among BRIC countries.
- Economist Intelligence Unit

10. • BRASSCOM
• Organization for Economic Co-operation and Developments (OECD)
• New York Times
• Computer Weekly
• Stratfor Global Intelligence
• Economic Intelligence Unit - The Economist
• UConn library Resource
• Sourcing Brazil
• Vision TRE
• Next Energy News
• World Bank
• US - Energy Information Administration (EIA)

11. Obrigado…

12. India /
North Eastern Latin & South
• Market Research Southern Total
America Asia America
Asia
• Our strategy for posting the No. of offers 9 5 2 2 18
advertisement Average Price
52.8 64.8 38.5 63.0 55.7
(US$)
• Timeline.
Quality of offer
Good Excellent Poor Very Good Good
description
• Result – Multitude of bidders:
Current level of
• Communication with the membership of 3 years 2.5 years 5 months 11 months 1.75 years
contractors
contractor
Availability of
75% 50% 50% 50% 56%
• Delivery of the Job samples
Competency
(Based on no
Very good Excellent Moderate Excellent Very Good
of samples
• Price: $ 54 received)
• Incentive: $ 60 Median time
1.5
taken for 14 hours 15 hours Less than 1 hour 5.5 hours
hours
• Total: $ 114 replying