Do Cultural Barriers Hamper US-Latin America Outsourcing?

One of the things I have heard repeatedly in my conversations with near shore sourcing partners in Latin America and the Caribbean is there has been a noticeable shift in the last two years away from India, in favor of near 5555555555555555555555551shore providers. Take Delta Airlines, for example, which transitioned much of its contact center operations from India to Jamaica. Why did Delta make this move?

Part of the reason, I’m told, is Jamaica is culturally more aligned with the core of Delta’s customer base – US citizens. Other factors include the familiar issues that make near-shoring so popular: similar time zones, closer physical proximity and English-as-a-first language capabilities.

Cultural familiarity is a real issue with real impacts. When I lived in Japan during the 90s, I frequently observed the “mum effect”, where a colleague or partner who possessed negative or “bad news” was very hesistant to reveal this information partly out of embarassment and partly because this behavior is embedded in Japanese culture.  In the business world the “mum effect” is a death sentence.  Failure to communicate problems or challenges  only causes those issues to manifest – just look at the origins of the US credit crisis. There is real data  behind the mum effect and its implications for the global outsourcing market, much of it done by Richard Nisbett, a social psychologist and outlined in this recent ComputerWorld report.
Unlike the US and UK, Latin America is classified by Nisbett as a group oriented culture, which is more aligned with Asia than the West. Will this present challenges in the continued emergence of Latin America – US commercial cooperative ventures?

We thing not. Latin America is  well positioned to become an extremely important nearshore ally for American industry. Key factors include:

  • The higher level of commitment the Obama administration is showing in building stronger Latin America-US relations
  • Economic realities. US companies of all sizes are viewing Latin America and Caribbean locations in a much more positive light because of fundamentally attractive operational cost advantages.  This favorable sentiment is showing up in an assortment of cross-border trade deals, BPO alliances and the establishment of offshore sourcing centers.
  • The growing professional class of trained workers in the region.
  • Finally – and perhaps most importantly – Latin America by and large loves President Obama and this will likely contribute to a favorable attitude toward all things American.

Despite immigration, drug cartels and other issues that media outlets like CNN want to exploit for their own commercial advantage, we see meaningful trends that demonstrate a tightening bond in this hemisphere.

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