While companies should always be focused on cost reduction, recessionary economics can force the hand of many businesses. JP Morgan Chase has announced that they’ll be outsourcing $400 million worth of IT work to India, as part of a project to streamline their IT infrastructure. An unidentified source explained that “[i]n this economic environment, Mr. Chiarello, the current CIO, wants to ensure that he helps JP Morgan meet cost-reduction goals.” JP Morgan is the first bank to announce an off-shoring strategy as part of their efforts to decrease costs in the wake of recent bank mergers.

For smaller companies, technology off-shoring can also be a way to immediately decrease costs in this economic climate. For companies who aren’t throwing around $400 million contracts, near-shoring is a way to further decrease costs as well as mitigate the risks of off-shoring.

In the internet world, a unique opportunity exists to combine the cost savings of near-shoring with the cost savings of using open source software (another tactic being used now to combat the realities of the economic downturn).

The open source phenomenon happening in Latin America for the past 10 years has created an enormous pool of talented, open source developers. They are near-by, they have enterprise-level experience in developing with open source technology and they can be well-paid employees for a fraction of the cost of a US-based engineer. Sure, this is a shameless plug for North by South but by going the route of adopting open source software via Latin American developers, companies can also make a material contribution to a revolutionary movement which is proving out the potential of free software to completely replace proprietary software and all the downsides that come with it.

It’s the right time, it’s the right place and it’s the right thing to do!