Skilled labor, flexibility to work as part of a team and compatibility with the time zone in the United States, the world’s biggest market, are some of the characteristics that have attracted competency centers to Brazil. These are multinational companies’ regional units responsible for the development of software and other applications that are distributed to the entire corporation. “The big companies are sending huge numbers of projects to developing countries, which creates enormous opportunities for countries such as Brazil, that have skilled technological and engineering manpower,” says Cesar Gon, president of Ci&T Software. This company is located in the city of Campinas, in the state of São Paulo, and specializes in the consultancy and development of applications; it has a global service-providing structure that includes six units in Brazil, one subsidiary in the USA and an office in London, England.

In April, Ci&T was named by US business magazine Fortune as one of the ten rising stars, the companies that lead the global outsourcing market, an activity in the field of Information Technology (IT) that produces software solutions for other companies. The research study “The Global Outsourcing 100” was conducted in partnership with the International Association of Outsourcing Professionals (IAOP).

The outlook for Brazil in the international software market is to sell US$ 5 billion worth of products and services to the overseas market in 2010. This will generate 100 thousand new jobs in a global market estimated to be worth US$ 100 billion, according to the Brazilian Association of Export Services and Software Companies (Brasscom), based in the city of Rio de Janeiro. This is a significant increase in comparison to the US$ 800 million of Brazilian software exports. “India is expected to account for US$ 60 billion of the total amount in 2010 and the other US$ 40 billion will be divided among countries such as China, Russia, Malaysia, Mexico and Brazil,” says Ricardo Saur, a director of Brasscom. “In the worst case scenario, we will account for 5%,” he adds.

On-going training – In the opinion of Geraldo Gomes, senior manager of the Dell Software Development Center in the city of Porto Alegre, state of Rio Grande do Sul, to achieve this goal it will first be necessary to tackle some barriers, such as  English language proficiency for analysts and technicians, in addition to the on-going training to keep up with technological changes.

A research study conducted by Ci&T Software on the info tech competency centers in Brazil uncovered another more serious problem, which makes it difficult to “sell” national IT to the parent companies of the multinationals: namely, deadlines are rarely complied with. This factor was repeatedly mentioned by the parent companies as a negative factor. The survey was conducted with top executives of the information technology business, representing 46 North American and European companies with major business interests in Brazil. Of these, 20 have IT competency centers in the United States, nine in Brazil, and seven centers each in France, England, Germany and India.

“We have to search for our space, because today the Indians are no longer able to meet the needs of the global market,” says Gomes. India has led this market since the mid-nineties, when companies began to downsize their IT departments and to outsource the development, maintenance and support of applications to specialized enterprises. Initially, this outsourcing was limited to the country where the companies were based. As time went by, outsourcing moved beyond country borders, leveraged by the activities in India, and became known as offshoring. “The main reasons why this occurred were the technical skills and the labor costs, which are much lower than those in the developed countries,” says Gon, from Ci&T.

The consensus among the experts consulted on this matter was that India will continue leading the market. But there are actions, albeit still modest ones, that include the participation of the government, of the entities representing software producers and exporters and companies, pushing Brazil towards a higher info tech level. “There is a demand in the United States that has not been met yet and our culture and our time zone in comparison to that of India and the rest of Asia are to our advantage,” says Gomes. The Information Technology Law is mentioned by the executive as one of the factors that has attracted big companies to set up software development centers in Brazil. According to this law, the company is entitled to tax benefits if it produces a product locally, but it has to invest roughly 2.5% of its gross revenues in R&D in this country. He points out, however, that this kind of venture is not sustainable unless skilled labor is easily available. “When the companies find out that the country has highly skilled labor, and this is one of our strong points, they invest more than originally planned,” he adds.

Dell’s center started out with software development pilot projects in partnership with the Catholic University (PUC) in the city of Porto Alegre, state of Rio Grande do Sul. “We were the first company to set up facilities in the university’s science and technology complex in 2002,” says the executive. Nowadays, TecnoPUC has 31 companies and organizations. In addition to Dell, the main companies at the center include HP, Sonae and Microsoft. The center in Brazil produces software for Dell’s global uses. “It is a huge software exporter, and brings complex problems for the university to solve,” says Gomes. The applications developed at Dell’s center include support tools for the financial industry and tools for sales processes, such as the on-line store in Latin America, developed and maintained in Porto Alegre, and  call centers, as well as support for the tools required in product engineering. The center in Brazil was the first one Dell established outside the US. Other centers were later set up in India, in Bangalore and Hyderabad; in Saint Petersburg, Russia, and more recently in Malaysia. “Our focus is on global systems, such as software for human resources, that involves 80 thousand users,” says Gomes.