Auxis, a consulting and nearshore outsourcing firm focused on helping organizations achieve peak performance in the back office has released the results of its 2019 Labor Savings Report: Creating Value with IT Nearshore Outsourcing. The report provides CIOs with a detailed cost comparison of the United States costs versus Costa Rica for the IT positions that would typically be outsourced, including Help Desk, Network Management, Software Development, Security, and more.
As IT leaders are increasingly being asked to expand their role into business strategy and growth initiatives, 80% of CIOs still believe that it’s challenging to find the right balance between business innovation and operational excellence, according to IDG’s 2019 State of the CIO Survey. In addition to this juggling act, finding the right skills to support digital transformation and other elements of the IT agenda such as cloud and security are also a continuing challenge for many IT shops, considering that the US market is facing the lowest unemployment rate in nearly 50 years.
For all of these reasons, Auxis’ report states that CIOs are increasingly relying on outsourcing to get better access to specialized talent while achieving cost savings and reinvesting those savings into innovation areas of their IT budget versus “keeping the lights on”.
“Most IT organizations, especially in the mid-market, are already dealing with very limited IT budgets. Outsourcing done right can help CIOs maximize the value of their IT spend by getting best-in-class skills and tools while increasing their operational maturity for a fraction of the cost’, said Alvaro Prieto, Auxis’ CIO & Head of IT Services.
The report highlights that US organizations should expect to save on average 38% to 48% in labor costs from outsourcing IT roles to Costa Rica. For example, positions such as a Network Engineer can yield average annual savings of $56,000 to $84,000 per year, whereas a Junior Developer can provide savings of over $90,000. In the case of Help Desk, the report highlights that the average cost per ticket in a Help Desk Department located in the US can range between $17-$19 per ticket versus $11-$13 in Costa Rica.
The real savings opportunity for each organization can significantly vary depending on where their IT department is currently located. For example, high labor cost markets such as New York and San Francisco will provide average savings of over 50%, whereas lower labor cost markets such as Atlanta or Miami will provide lower savings in the range of 40% to 50%.
San Jose, Costa Rica, has been consistently recognized as the top nearshore destination over the last decade given its strong English skills, talent pool, political stability, government incentives, and geographic and time proximity to the US. The Costa Rican government estimates the number of multinationals in the country that are currently providing IT and business services to be over 170, equivalent to more than 66,000 employees. Some of the leading organizations that have established operations in the country include HP, IBM, Cognizant, World Fuel Services, DHL, Walmart, Procter & Gamble, Equifax, among many others.
Auxis opened its Global Delivery Center in Costa Rica in 2009 and is currently supporting over 50 different midmarket and enterprise organizations who have outsourced their IT, Finance and Customer Service operations with the Top 100 Outsourcer. Auxis’ IT services include 24x7x365 Service Desk, Network Operations, Data Center & Cloud Management, DevOps, Security, and Application Development.
To download a copy of the full report with the detailed cost comparison analysis and more insights click here.
With a 22+ year track record, Auxis is a management consulting and outsourcing firm focused on helping organizations modernize and scale their back office operations through a combination of customized solutions including Nearshore Outsourcing, Shared Services, Robotics Process Automation, Cloud, and Analytics. Recognized as one of the Top 100 Global Outsourcing providers, Auxis’ unique perspective as both advisor and outsourcing operator allows its clients to obtain real benefits and ROI from every engagement.