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Whatever You Call It, Outsourcing to Puerto Rico Is a “Shore” Thing for U.S. Businesses

Published February 27, 2019

Written by: Carlos Meléndez
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Carlos Meléndez

Carlos M. Meléndez is the COO and Co-Founder of Wovenware an artificial intelligence and software development company based in San Juan, Puerto Rico. Mr. Meléndez has a bachelor’s degree in Electrical Engineering and a Juris Doctor both from the University of Puerto Rico. Mr. Meléndez is also the Vice Chairman of the Board of ConPRmetidos a non-profit organization that connects people to foster commitment with the personal, social and economic development of Puerto Rican communities wherever they are.

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Puerto Rico may suffer a severe identity crisis when it comes to naming its category of outsourcing. It’s not really offshoring from the U.S.…nearshoring may be a better term. But as a U.S. territory, is it technically onshoring? When one thinks of that term, an image of open spaces in Oklahoma or Michigan come to mind – and that’s definitely not Puerto Rico. Do you see the dilemma? 
The reality is that Puerto Rico falls somewhere in the middle of each of these terms, bringing the best of both worlds to U.S. businesses – the cost benefits of offshoring and the productivity benefits of nearshoring, on-shore.   
Semantics aside, U.S. companies are quickly realizing the benefits that partnering with Puerto Rico-based service providers can provide. From IT and software development, to pharma and medical device manufacturing, business process outsourcing (BPO) has become a major economic driver for the island. So, what’s driving this growth?  Consider the following: 
The Convenience of Similarity
As a U.S. territory, Puerto Rico shares the same currency, similar time zones, languages, intellectual Property (IP) protection as well as adherence to other U.S. regulations. While these are benefits that would be impossible to replicate with offshore providers, Puerto Rico’s billing rates are still 30-50 percent cheaper than mainland competitors. In addition, for highly regulated industries where data privacy laws require that sensitive information remains inside the country, Puerto Rico provides the perfect solution.   
Location, Location, Location
Puerto Rico is only three-to-four hours away from most cities in the U.S., and usually involves short flights. This is essential to timely product development and keeping projects on schedule. Nearshore providers in Puerto Rico can easily work with clients on-site to ensure that projects stay on budget with minimal disruption to the way clients have traditionally worked. 
Collaboration is Key to Innovation
At a time when technology has become extremely complex, yet intrinsically important to overall business strategies, being able to effectively collaborate in person is key to effective innovation and strategic solutions. Today’s outsourced provider must be a true business partner that understands your business – not some obscure firm with generic answers. Sharing a common language and culture, and being located close to the mainland, enables a collaborative environment. 
Complex Technology Requires Specialization
Not only is Puerto Rico home to world-class universities, but many of its students also attend leading American universities on the mainland, earning advanced degrees in software engineering, data science and other fields that they bring back to the island. Today’s advanced artificial intelligence (AI) and other complex technologies require the expertise that Puerto Rico can offer. In addition, software professionals follow state-of-the-art best practices and methodologies, such as Agile, Lean manufacturing and more.  
According to a recent report, the  global Business Process Outsourcing (BPO) market will reach approximately $220 billion by 2020. As the customer-supplier relationship  becomes more important than ever to innovation and competitive growth, more companies are recognizing that Puerto Rico contains a strong and vibrant source for software engineering and technology skills, along with lower prices, and similar, if not sometimes superior, capabilities to U.S. mainland and offshore counterparts.  
Now if we could only come up with a term to adequately describe Puerto Rico’s role in the outsourcing universe.

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