Lastminute.com outsources to Argentina

In a move consistent with its reputation as a purveyor of exotic retreats, Lastminute.com has eschewed the clichéd decision of outsourcing some of its IT operation to India and opted instead for a more esoteric destination -- Argentina.

The UK dot-com darling has moved all of its core Unix and database administration operation to a remote office in Buenos Aires run by around 20 e-commerce specialists, according to the company's chief technology officer, Chip Steinmetz.

Argentina was chosen almost by chance when the company discovered a core group of e-commerce experts that had been working on a large-scale open-source project for the Argentine government, said Steinmetz. The company brought 20 of the team over to the UK where they worked as part of Lastminute's in-house tech team for six months and then relocated back to Argentina.

"I don't know anyone else who is a big e-commerce site who has off-shored their core infrastructure. I don't know that Amazon or Google has done it and I think they would be scared to death. It was very high-risk," said Steinmetz.

He added that the Argentina was made a more favourable option because of the weak local currency, the fact that a lot of people in Argentina have dual-European passports and the time difference, which allows for 24-hour support of the UK operation.

"What is especially cool is that because there is a time-zone change we will have much better 24x7 support of the site. Without having to abuse people we have improved our service -- do you want go hire guys in the UK and tell them to work through the night?" he said.

The team in Argentina are remotely managing servers using a multi-megabit secure VPN with full Unix console access. Activities include monitoring first-level alerts in case the site goes down and Unix system administration. " We have excellent security around it, which we have to as we are a target for hackers," he added.

Around 12 IT jobs were lost from the UK operation as a direct result of decision to outsource to Argentina but Steinmetz claimed that he is planning to boost the overall headcount in IT by around 15 percent this year to roughly 130.

Steinmetz, who joined Lastminute around a year ago after heading up technology at the Walt Disney Internet Group, said the travel site was approaching outsourcing in a different way to most companies. "This is different to outsourcing the way other people have done it, which is that I have got a bunch of shitty processes I don't care about so I'll just dump those and try and do it for half the price. We took a high-tech approach and changed the processes and outsourced an area that most probably don't yet -- but it will be a trend," he said.

He added that other companies will probably be looking to outsource to Argentina this year. "I have heard good reports from our vendors like IBM and Sun who have expanded their operations there. So I think there will be other to follow but we are leading the edge for sure. I am pretty proud it works," he said.

Lastminute is also looking to launch location-based mobile services this spring and will begin development over the next month. Although the company is planning to extend its existing 3G projects with 3 to include T-Mobile and Vodafone, Steimetz said the location-based services, such as interactive maps, wouldn't be dependent on third-generation technology. "Location-based services would be very interesting. Being able to tie where you are with where you want to go automatically would be great. We are going to be in a position to do that in the next month or so," he said.

Lastminute as a hot-spot provider could also be on the cards in a move that builds on the Internet kiosks it has installed in some UK airports. "I think it could be very appealing and a great customer experience. I would use it when I travelled; I think a lot of people would," said Steinmetz.

Click here to read the full interview with Chip Steinmetz.