It might not yet have the same profile as South Asia or Eastern Europe, but Latin America is becoming an increasingly popular destination for organizations looking to establish shared service centers, either serving domestic markets or as part of regional or even global shared services strategies. Furthermore, along with this growth in the captive sector Latin America has become the focus of growing interest on the part of major outsourcing providers whose entry into the market has had knock-on consequences across the board. Throw into this already-volatile mix the current economic instability and it’s easy to see why the region’s activity is making waves across and beyond the shared services and outsourcing space in 2009.

We convened a panel representing practitioners,virtual roundtables providers and advisors to take a look at the current level of maturity of the Latin American market and to examine how – and if – the economic malaise affecting much of the rest of the global economy is impacting upon operations in the region.

Ricardo Neves: This is a region different from other regions in the world. If you talk about intra-region services, you’re talking about two major languages which are, in some ways, close to each other; you have also a closeness of overall culture; and usually what you see with multinational or regional operations here is that the larger countries like Brazil, Argentina, Mexico, Chile correspond to a significant size of the operations. Usually if you look at most of the global or multinational companies in the region, they have 50% or even 75% of their operations carried out in two or three countries at most – and then 10, 12 other countries where they do have operations but which make up only 25% or less of their business.

This gives a challenge when setting up a regional center, because there is a scale for the larger countries which is not present in the smaller ones – and what I’ve seen here is a mix between totally centrally run shared services and a lesser local presence in smaller countries to make sure the right scale is achieved and the right support is done at the regional level. There are companies based in Brazil that I’ve seen who have regional shared services – like the brewer AmBev, now connected with InBev and AnhauserBusch, which has a very large regional shared services based in Sao Paulo serving not just operations in the region, but also the firm’s operations in Canada for the Labatt operations. Unilever has also set up an HR shared services – and has just sold its finance shared services to Capgemini in the region.

In sum, from those large operations that I’ve seen, as I said I’ve seen a mix of some centralised services and some small countries with local services combined.