1. CERCAS OFT
… benefits of insourcing and offshoring combined!
Argentina: Software Development
and IT Consulting Outsourcing’s
New Hot Spot
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CERCAS OFT

2. Introduction
Why Argentina
• The attractiveness of Latin America
• IT Landscape in Argentina
• Leading Content Producer in Spanish
• Educational excellence
• Political Stability
• Closer time-zone
• Favorable Tax Structure
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3. The attractiveness of Latin America
• Latin America has become a hub for many offshoring and nearshoring companies’
projects. Specifically, Argentina has become a top destination, due to its skilled
workforce and cultural and geographical closeness to the US and Europe.
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4. IT Landscape in Argentina
• A number of major IT firms have setup bases, including
IBM, Microsoft and Oracle. Microsoft established a
A Human Development Report
relationship with the Government to reduce piracy rates
prepared by the United Nations
by leveraging the highly educated professional
Development Program, reported in
workforce to develop local technology the technology achievement index
that Argentina ranked among the
• Argentinean government has spent billions to build up global leaders of the information era.
the infrastructure system and now has the highest
growth rate of connectivity in Latin America
• Buenos Aires has become a technological hub with a
large concentration of IT companies located within this
one geographical area. CERCASOFT runs R&D
centers in Buenos Aires and Cordoba. Cordoba is the
second largest IT hub in Argentina. This dual location
in the top IT clusters, allows CERCASOFT to tap into
the best talent pool available in the region
UNDP Technology Achievement Index:
(http://hdr.undp.org/reports/global/2001
/en/pdf/techindex.pdf)
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5. Leading Content Producer in Spanish
• In the last decade, significant capital has been invested
in Buenos Aires-based dot-com businesses based on "Argentina, respected for its
the Hispanic markets. Some of these became a
hard science acumen and
regional providers of services to US and European
winner of Latin America's only
companies
Nobel Prize in science, has
become a cost-effective source
• Buenos Aires is a hub for retail web services. The of well-educated programmer
Buenos Aires-based development of Disney's web site and technology workers.
for Hispanic America is prime example
Other Latin America nations
• Argentina is also a leading content producer in have cheaper labor but not the
Spanish, developing offshore platform and services same skilled work force that
helped put Argentina at the
• Argentina’s leadership is the result of the education center of Latin-America
level achieved and the multi-cultural wealth of the internet start-ups in the 1990s
Argentine society dot-com boom."
Marta Hummel (29 may 2003)
Argentina Techs grows as devaluation
kicks in. (www.reuters.co.uk).
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6. Educational excellence
• Argentina’s government is committed to education by providing free university education to
all its citizens. The country has set itself apart from other Latin American nations by having
the highest literacy rate and English speaking population.
• Unlike other major outsourcing countries, such as India, Argentineans must finish their trade
school education before they can be given titles of Software Engineers.
• At CERCASOFT, we understand that the most important part of the IT business is human
capital. As a high-end software development company in the region, CERCASOFT has
established partnerships with some of the most prestigious universities and trade schools in
order to gain direct access to the best talent available.
• Highly qualified human resources
Historically, Argentina has the best educational level
of South- America. Argentineans are professional
experts abroad. Argentina boasts the great
availability of highly skilled professionals. The IT
sector is well developed.
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7. Political Stability
• In late 2000, Argentina went through a financial market
correction. Today, Argentina is thriving with an
economic growth rate averaging 8% since 2002. “Countries should look to
Argentina as an example of
• Argentina has a very stable government, civil society everything that they should
and among the lowest crime rates in the entire region not do in the face of a
domestic and international
• The International Monetary Fund consistently economic and political crisis”
supported Argentina’s stabilization and reform efforts
and often points to many of Argentina’s policies as Claudio Rios
examples for other emerging market economies to Argentine Chamber of Commerce
emulate
• Argentine government has established a number of
laws and policies promoting the software industry
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8. Closer time-zone
• One of the main weaknesses of the offshore outsourcing traditional model has
proven to be the difficulties of managing a remote team through time zone
differences. Many companies are looking for alternative locations to avoid this
inconvenience
• Almost 50% of Argentina is in the same time zone as the Eastern United States,
the other half is only 4 hours different then that of the West Coast. This close
proximity provides a number of advantages to our clients, including:
• Instant communication channels: on any project communication is essential,
especially when working with an offshore vendor. Our clients have always like the fact
that when they pick up the phone or send a question by email, a person does not have
to wait till the next day for a response
• Better team integration: with immediate communication between the local and near
shore teams, a sense of openness forms that improves morale and commitment which
fosters a collaboration
• Shorter communication cycles: saving time and money
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9. Favorable Tax Structure
• Argentina government is firmly behind its Software
Industry, through specific laws that set forth that
software production is considered similar to an CERCASOFT is able to
industrial activity and companies engaged in this tap into the highly
practice will receive tax credits and other benefits
established for the industrial sector by the National
qualified professional
Government network while maintaining
a cost structure that is the
• The tax structure allows the Executive Branch to same, if not better, then
include, either in the existing or future productive
our competition
development policies, the design, promotion and
manufacturing of software as a productive
transformation activity that may be promoted
• These favorable tax code policies provides highly
educated, competitive workforce at an extremely
favorable pricing structure
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10. Thank You.
Courtesy of CERCASOFT
www.cercasoft.com
… benefits of insourcing and offshoring combined!
For more information please contact:
Mirek Boruta at mirek@cercasoft.com
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