Blogging from Brazil

I’m British and I have lived in London for most of my life, but I just relocated to São Paulo in Brazil.

Why Brazil, you might ask? Obviously it helps that my wife is from Brazil, but that’s only a part of the story. She lived in London for the best part of a decade and when she said that it might be time to be closer to her mother, I didn’t resist.

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And it was not just because of the beaches, carnival, and warm weather that I thought Brazil might be a good place for me. I have been writing about the technology industry in Brazil for a few years and observing from Europe, with the occasional flying visit. I wrote a book about the growth of the BRICs market for offshore outsourcing back in 2007 and now it felt like time to get closer to the B in the BRICs.

I haven’t been alone in writing about Brazil as an up and coming destination for the offshore outsourcing market. There are around two million people working in the IT industry alone here, and international firms such as IBM and Capgemini are investing huge amounts in making this one of their key global research locations.

Of course, the key downside for international business remains the use of Portuguese as Brazil’s national language - something countries such as India, where every university graduate is fluent in English, don’t need to worry about. However, anyone who gets on the ground and talks to those in the IT industry here will soon realise that technology people all use English for business, but switch back to their native language once work is over and they are relaxing with a cold beer - which means I am personally working hard to improve my Portuguese skills!

I believe that those who write Brazil off because of the language are jumping to conclusions. That very topic, in fact, is being openly discussed in the media this week, because of the crisis in Egypt – when offshoring to a remote location, how safe is your business anyway?

Egypt

The Egyptian government has spent a lot of money in the last few years promoting their fledging IT and BPO markets. International advisors such as McKinsey & Co. were hired to write reports on the market. International marketing and PR agency Hill & Knowlton was hired to position the market to journalists and industry analysts. I was even flown over there in 2009, along with a group of about 20 other analysts from firms you all know… Datamonitor, Gartner, Forrester… no expense was spared to ensure we were all made aware of just how much effort the Egyptian government was putting into the growth of their offshoring industry.

That effort has certainly not been wasted. Hard data doesn’t change overnight just because of the present political crisis. This week, the new AT Kearney offshoring index positions Egypt as the fourth most attractive offshoring destination in the world. A month ago, Gartner listed Egypt in their top 30 international offshoring destinations.

The national agency promoting offshoring to Egypt, ITIDA, issued a statement today saying: "ITIDA is committed to supporting the many companies that have invested in Egypt and to protecting the substantial investments we have made in growing our outsourcing industry in recent years.  Egypt is moving forwards, not backwards, and we will protect and maintain the progress we have made. We are grateful to our international partners for their continued backing."

Eng. Yasser El Kady, CEO of ITIDA said: "I have been working closely with all of our international BPO partners over the last few days, supporting them both in terms of keeping their staff safe and their operations working.  The good news is that I have been in conversations today with partners including Teleperformance, Stream, and Sutherland, and they all remain fully committed to Egypt."

But though the efforts of the government are now bearing fruit with the analyst community, and the underlying data cannot be disputed, how will the CIO or business leader faced with an offshoring decision post-crisis react to the unrest in Egypt? And it’s not just a question of the present unrest – if President Mubarak finally goes, then it remains unclear what kind of government will replace him.

So perhaps the weighting used by the various analysts in their country reports is going to have to be readjusted with less focus on national language as an issue and more focus on political stability. After all, in a 24/7 international service culture, it is unforgivable for private sector companies to find their telephone lines and Internet cut off with no notice.

Egypt is going to have to work hard to get over this crisis and to rebuild confidence in their offshore outsourcing industry for any new market entrants. Large players, such as Brazil, that have been hovering quietly on the edge of IT buying decisions may find that this is their time to step into the limelight. And IT buyers from Europe and the USA might just get over their fear of ordering dinner in a foreign language if they feel their business operations are going to be reliable and untouched by the government.

Mark Hillary
www.markhillary.com
www.twitter.com/markhillary.

About the author
Mark Kobayashi-Hillary is the CEO of IT Decisions, the leading source of English-language insight into the Brazilian tech sector. He is British and based in São Paulo, Brazil.

Mark is also an author, blogger, and advisor on technology, globalisation and corporate change. He has written several successful management books, including ‘Global Services: Moving to a Level Playing Field’, ‘Who Moved My Job?’, and ‘Building a Future with BRICs’. The theme running through most of his books is how company structures are changing, globalising, and offering new opportunities for intelligent executives.

Mark's outsourcing blog for Computing magazine eventually became a book in 2009, titled 'Talking Outsourcing' and this blog was shortlisted for a blog of the year award in 2009 by Computer Weekly magazine. He blogs for a number of other media organisations including Reuters, silicon.com, and Computer Weekly.

Mark has advised the United Nations on the development of the IT industry in Africa and Bangladesh, the Indian government on service exports, and the British government on developing a hi-tech economy. Mark spent most of September 2010 working with the Maltese government on a benchmarking exercise guiding their ICT industry development. Mark is a visiting lecturer on the MBA programme at London South Bank University and has lectured as a guest at many other universities including the LSE, Loughborough, and Henley Management College.

www.markhillary.com
www.itdecs.com