Nearshore Americas | The New Axis of Outsourcing » News & Analysis http://www.nearshoreamericas.com Experts in BPO, IT and Software in Latin America and the Caribbean Thu, 20 Nov 2014 17:35:44 +0000 en hourly 1 In the Saturated Las Vegas Call Center Market, Only the Savvy Survive http://www.nearshoreamericas.com/intelligent-operators-prosper-las-vegas-saturated-call-center-market/ http://www.nearshoreamericas.com/intelligent-operators-prosper-las-vegas-saturated-call-center-market/#comments Thu, 20 Nov 2014 17:24:42 +0000 http://www.nearshoreamericas.com/?p=42450 By Duncan Tucker The ability to attract, retain and develop talent through strong recruitment, training and employee satisfaction programs is crucial in order to prosper in competitive environments like the Las Vegas call center industry. That’s the message from local service providers who insist that the challenges of market saturation can be overcome if you take the right strategic approach. ...

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By Duncan Tucker

The ability to attract, retain and develop talent through strong recruitment, training and employee satisfaction programs is crucial in order to prosper in competitive environments like the Las Vegas call center industry. That’s the message from local service providers who insist that the challenges of market saturation can be overcome if you take the right strategic approach.

One of the most prominent onshore hubs in the United States, Las Vegas is home to a dozen or so contact centers run by the likes of Sitel, TELUS International, Barclaycard, MGM Resorts International, UPS and Zappos. While labor costs are reasonable, there are signs for concern for those considering investing in the market. A recent report by Re/code noted that the Las Vegas startup community has been hit by a raft of layoffs and several high-profile suicides in the last two years. Moreover, earlier this month, the nonprofit Brookings Institution published a report stating that Nevada is suffering a severe shortage of talent in the science, technology, engineering and math (STEM) fields, which is hampering the state’s efforts to diversify its economy. However, this is unlikely to impact the call center outsourcing operations in the Las Vegas area that have fewer high tech demands and generally require less skilled service workers.

Curiously, despite the city’s prominence within the onshore call center industry, Katrina Menzigian, VP of Research Relations at Everest, told Nearshore Americas that “of the 25 or so established contact center outsourcing service providers we regularly follow, none seem to have significant delivery presence in the Las Vegas area. In fact, none were reported to us. Even assuming there are some things we didn’t capture, it’s fair to say that there’s not enough to really hit the radar screen.”

Why are so many major outsourcing providers avoiding the city? The fierce competition when it comes to recruiting to talent is one of the biggest challenges in Las Vegas, according to those who operate there, but they say this is can be overcome if you are an attractive employer with strong training programs and real career opportunities.

Make it Easy to Work for You

To get the inside perspective, Nearshore Americas spoke to Gabriel Bristol, President and CEO of Intelicare Direct, a call center service provider with facilities in Las Vegas and San Diego. “Currently in Las Vegas we have about 150 agents working various shifts to provide 24-hour, seven-day-a-week coverage for our various clients,” Bristol said. “In addition to Intelicare Direct, there are more than a half-dozen other centers (in Las Vegas) employing an estimated 4,500 to 5,000 agents, and that doesn’t count management or support staff.”

Asked about the biggest challenges of operating in the Las Vegas area, Bristol joked, “Other than the summer heat and monsoon season?” He then pointed to the need to attract the right talent. “The talent pool in Las Vegas isn’t that much different than it is in other cities, which is to say it’s mixed,” he explained. “The truth is every city has its challenges. In San Diego, where our other center is located, the cost of living is among the highest in the country. In Las Vegas, it’s a different challenge. Everyone knows the city attracts a certain level of transient residents, people who move here and move away almost as quickly when the experience of living here didn’t match their expectations. Hiring these people and then losing them quickly can really hurt the bottom line, so we take extra care during our employee screening to try and minimize that exposure.”

The key to overcoming this challenge is making your company a desirable place to work, Bristol said. “Intelicare Direct is a unique environment. We are an inbound customer service company only. We don’t do outbound calls. We don’t set appointments or sell magazine subscriptions. We handle inbound customer support only. That makes us special in the marketplace and as a result, we attract a lot of top tier talent from other call centers who want to work in our kind of environment.” Bristol continued: “To attract the top tier talent, we pay above the industry standard, only offer full-time employment with benefits and we’re a dog friendly and child friendly work place. In short, we make it very easy to work for us.”

The Market Continues to Grow

Employing a total of 1,395 agents at two different facilities in Las Vegas, one of the city’s largest call center operators is Nashville, Tennessee-based outsourcing provider Sitel. Cassidy Klundt, Sitel’s Las Vegas Site Director, told Nearshore Americas that he does not believe the local market is oversaturated.

There are “ten-plus call centers in the area, but it really depends on how you define that because you could have some call center operations of 10 to 15 folks and one person might call that a call center and another might call it a small operation,” he said. “There’s certainly a large number of call centers – and I think whenever you start to exceed ten-plus in a marketplace you’ve got to start to question the size of your operations and how you’re going to tap that market – but this market continues to grow and change.”

The most important thing from Sitel’s point of view is that “there’s a very large workforce,” Klundt said. “From a workforce perspective anywhere that you locate where the majority of the workforce is service-driven, that’s naturally going to translate to the call center environment,” he explained. “There’s a large casino base, there’s a lot of government employees and we have the largest air force base here too. So you have a large portion of the workforce coming from a servicing perspective and you also have a lot of families that are brought in because of the air force base and that translates to a very large labor force that is very conducive to the call center environment.”

Klundt added that labor costs in Las Vegas “are actually fairly reasonable. To put that into perspective, I had been running the Oak Ridge, Tennessee facility for the last three years before I came out here, and just from a labor market perspective there’s very similar costs in both markets and I think what really helps us is that Las Vegas is a much large market in comparison.”

Offer Career Opportunities

Klundt accepted that the Vegas labor market throws up certain challenges but insisted that these can be overcome through intelligent recruitment campaigns. “We always have to make sure we’re targeting the right folks. We have a pretty big mix of support types, like technical support, sales retention, customer service, so we have to consider how you target the right folks by way of advertisement,” he said. “This is a visually rich environment so you can’t necessarily count on a billboard because you cased used to that in Las Vegas. It’s all about involvement in the community and getting out to job fairs, and then we have a large portion of our sourcing that is referral-based, so we have ASET initiatives to make sure that our employees are really spreading the name of Sitel around the community by word of mouth, that’s a big part of our sourcing.”

Offering enticing long-term career opportunities is also “highly critical” to Sitel’s efforts to attract ambitious young workers who are less likely to leave after a few short months, Klundt said. In Las Vegas “there are more and more young and eager workers available and this is an ideal job and career opportunity for them,” he explained. “That’s a big value proposition for Sitel and I can attest to that. Being a Sitel for 11 years myself, I’ve actually gone through every position from agent to coach to operations manager to site director. Most call centers in this area cannot boast the track training programs that we have available to people to teach them the skills they need to excel in their career and move forward.”

Klundt added that he “would certainly welcome” the entrance of more colleges and higher educational institutions to help create a better educated workforce in the Las Vegas area. But one of the keys to prospering in this environment is for operators to ensure they have their own robust training programs, he said. “There that will require experienced workers but we don’t necessarily always require that previous call center experience – if you have service experience we’ll certainly teach you the call center side, that’s where we certainly benefit you greatly and that’s why I don’t think the market is over-saturated, at least from Sitel’s perspective,”  Klundt concluded.

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When Analysts Don’t Agree: Making Sense of Conflicting Outsourcing Activity Reports http://www.nearshoreamericas.com/ito-forecasts-conflicts-nelson-hall-isg/ http://www.nearshoreamericas.com/ito-forecasts-conflicts-nelson-hall-isg/#comments Wed, 19 Nov 2014 17:19:59 +0000 http://www.nearshoreamericas.com/?p=42394 By Bianca Wright When one headline states: “Number of New IT Outsourcing Deals Hits All-Time High” and another cries, “NelsonHall: ITO Spending Returns to Flat Growth in Q3, but Continued Decline in ITO Bookings Activity is a Concern,” it is easy for those in the sector to wonder just whom to believe. Getting an overview of the IT outsourcing sector ...

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By Bianca Wright

When one headline states: “Number of New IT Outsourcing Deals Hits All-Time High” and another cries, “NelsonHall: ITO Spending Returns to Flat Growth in Q3, but Continued Decline in ITO Bookings Activity is a Concern,” it is easy for those in the sector to wonder just whom to believe.

Getting an overview of the IT outsourcing sector can be tricky. Data abounds, but research reports can seem to contradict each other and it is difficult to tell exactly what is being measured and if different reports are measuring the same things.

These two seemingly contradictory reports are a case in point. If new outsourcing deals are at an all-time high, how can a continued decline in bookings be a concern? The trick is in interpreting each report within context, identifying the relevant sections and building a bigger picture overview of the sector as a whole.

Dominique Raviart, ITO Research Director at NelsonHall, advised that those scrutinizing the sector need to bear in mind that IT outsourcing refers to multi-year (mostly run services) contracts, and does not include short-term (build) services such as consulting, systems integration and application development.

“The ITO market is a maturing market in terms of contract opportunities with a fragmented vendor landscape. This has been true for 20 years. What is relatively new – in the last five to ten years – is the effect on prices of offshoring and of, increasingly, cloud computing in its infrastructure form – private and public clouds,” she said.

As a result, Raviart said, spending on IT outsourcing overall is declining annually by zero to three percent. “This depends on economic conditions and varies by geography and by service line. For instance, application outsourcing spending is still growing by two to three percent while IT infrastructure management tends to decline currently by one to two percent. Overall growth in ITO spending in 2014 and 2015 should be flat,” she said.

Raviart explained that clients now award their ITO work through multi-year contracts, and those bookings capture spending over a number of years, typically five. NelsonHall also tracks the combined TCV (total contract value) of those contracts on a quarterly basis. “Since 2002, TCV/bookings have gone down very significantly, in a non-linear manner, and the level of TCV is now half of that of the best year (2003: ~US$60bn),” she said.

Raviart added: “The value of contracts varies from $10m to $2 billion. The large contracts have long decision cycles, from 12 to 24 months. As a result of large contracts, booking quarterly variations are difficult to analyze. What matters is the trend over several quarters.”

For contracts with TCV over $100m, NelsonHall has noticed that the level of new scope contracts has decreased from 90 percent in 2003 to 30 to 40 percent currently. “This means that most contracts are now renewals. The market is therefore saturated, at this point. The market is currently saturated because only a certain number of clients have decided to outsource. However, new clients in non-traditional ITO geographies may decide to adopt outsourcing at some point in the future, typically public sector outside of the U.K,” she said.

Differing Interpretations

There are points of overlap. ISG and NelsonHall agree that the third quarter came in weaker for ITO awards. Esteban Herrera, partner with ISG, stated that there was a slower third quarter in ITO and that can be attributed to fewer new scope, as opposed to deal restructuring, awards.

ISG’s view of the sector, however, is somewhat more optimistic. “The year-to-date picture still remains solid,” Herrera said. “The broader market had a strong first half which boosted ITO’s year-to-date achievements in both annual contract value and counts.”

Herrera added: “Where we disagree is that we feel that the YTD (year-to-date) picture for ITO awards is more robust, whereas they (NelsonHall) see it lagging. It probably comes down to the fact that we have more data in our pool of contract awards to analyze.”

Herrera illustrated the point by noting that the ITO market needs to see only $1.3 billion in ACV (annual contract value) awarded in this fourth quarter to equal its overall 2013 numbers. In 2014, both ACV and number of contracts are at record highs for ITO.

Regional perspectives do vary, though. Herrera said: “In the Americas ACV is up nearly 20 percent this year, a remarkable performance in a mature market, with particular strength in infrastructure. Clearly, the most mature segment of the outsourcing industry in the most mature region is enjoying a bit of a resurgence as companies look to third parties for help with modernization of their IT.”

He explained that even though the number of awards increased only seven percent, ITO contract counts in the Americas sit at an all-time high through three quarters. “The trends in the Americas have been consistent: lower unit costs, shorter terms, more multi-sourcing, all wrapped up in an environment of greater spend as the economy recovers and companies look to fuel growth,” Herrera said.

EMEA (Europe, Middle East and Africa) ITO ACV rose nearly 15 percent over this time last year, and ITO counts increased by an even greater percentage, according to ISG. “Both measures reached an all-time high, despite indications of a slowdown in the third quarter. Infrastructure so far this year has outpaced its performance in any prior year, due in part to very strong activity. ADM presents a picture of consistency in EMEA, with year-to-date ACV exactly as it was a year ago. In fact, ADM has stayed within a very tight range since 2009,” Herrera added.

He went on to say that most of the sourcing activity in Asia-Pacific this year has been in ITO, and both ACV and number of awards set a record high.

Why the Discrepancies?

While NelsonHall points to the need for concern, ISG highlights a more positive outlook – and service providers are left wondering who to believe.

So why is there a seeming contradiction in terms of the research available? In many instances it has to do with the fact that different firms are not comparing the same things. Raviart noted that, from a broad perspective, NelsonHall and its competitors all make a number of decisions on contract timing – when do they include a contract in their numbers, at the time of the negotiations, at the signing, at the time you are aware of it and believe it is almost certain the deal will be closed and so on – in terms of TCV, on the geography, or on the service line.

“Deal coverage is also an issue: some countries have adopted the advisor model, especially the U.S., some rely on the Big 4, some use individuals, some use their internal capabilities and finally, some use a mix of all possibilities. Therefore coverage can be non-exhaustive or be biased by the nationality of the advisor firm, its investment in expanding its coverage and so forth,” she said.

Raviart reiterated: “We believe our booking analysis seems to us consistent with our annual spending analysis i.e. bookings are down and showing little-new scope contracts. Spending is also declining.”

Herrera explained that ISG’s Outsourcing Index defines the broader market as commercial contracts with an annual value of $5 million or greater. “This is the primary criteria we use when describing market trends. We do cover the public sector but we do so separately from the commercial market and our findings are presented every six months in the first and third quarter Index calls,” he said.

ISG also has a data exchange with more than 90 service providers in which they provide ISG with data on contract awards that are not announced publicly, as well as firming up its total contract value estimates on awards where no deal value was made public. “It all adds up to provide a very holistic picture of the market,” Herrera emphasized.

Tesla Martinez, Director of International New Business Development at Focus Brands International, who has worked with research companies around the world, said that firms need to ensure that their data is relevant, accurate and internationally cross-comparable.

“For example, in India A+B=C whereas in Brazil XY=C. Same outcome, different way of getting there. Understand how the researcher got there,” she explained, adding that, using the analogy above, it is important to understand that not all variables are available across markets, when looking at different research reports.

She advised that those in the ITO sector need to ask questions about different reports: Did the research use different variables? Which markets? Are they measuring the same data point?

Martinez explained that the ISG report measures different periods of time across the Americas. The second report, by NelsonHall, measures North America, leaving out the rest of the Americas, then measures Europe and “lumps in Brazil, India and China in a statement. This is not cross-regional comparable,” she said.

So while reports from different companies point to contradicting trends or statistics, it is often the case that they are not measuring the same things. The important lesson to learn is that research reports are specific to the context in which they are produced and the focus and methodology of the particular firm involved. An analysis of differing reports will likely highlight differences in approaches, focus areas and methodologies and help those in the sector extrapolate the data relevant to their context and needs.

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Real’s Depreciation Gives Sudden Burst to Brazil’s IT Exports http://www.nearshoreamericas.com/real-depreciation-incentivizes-brazilian-high-costs-remain-impediment/ http://www.nearshoreamericas.com/real-depreciation-incentivizes-brazilian-high-costs-remain-impediment/#comments Tue, 18 Nov 2014 20:16:15 +0000 http://www.nearshoreamericas.com/?p=42400 By Silvia Rosa The devaluation of the Brazilian real may contribute toward making Brazilian companies more competitive in the global market, but the high costs in Brazil still limit an increase of IT sector exports. Last year, Brazilian software and IT services’ exports totaled US$807 million, according to the survey published by the IDC and Brazilian Association of Software Companies ...

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By Silvia Rosa

The devaluation of the Brazilian real may contribute toward making Brazilian companies more competitive in the global market, but the high costs in Brazil still limit an increase of IT sector exports.

Last year, Brazilian software and IT services’ exports totaled US$807 million, according to the survey published by the IDC and Brazilian Association of Software Companies (Abes). Added to hardware and other services, such as Business Process Operation (BPO), the total exports from the Information and Communication Technologies (ICT) sector reached US$3.447 billion.

In 2014, Abes estimates that Brazilian exports should follow the growth of the Brazilian IT domestic market, which is expected to increase by 12% this year. According to a Brazilian Federation of Information Technology Companies (Assespro) survey, which has about 500 associates, about one quarter of exporting companies forecast a growth above 50% in international operation revenues for this year, while others expect stability on foreign sales income.

For 2015, Abes forecasts a somewhat better scenario, but Abes CEO Jorge Sukarie noted that uncertainties concerning the Brazilian political scenario and Brazilian foreign exchange stability could interfere in any decision to hire services from Brazilian companies.

The recovery of the U.S. economy, one of the main markets for Brazilian software and services sales, nevertheless, could benefit the Brazilian IT sector exports. “The USA is the largest IT market in the world and the recovery of the American economy could boost Brazilian exports. However, high costs in Brazil harm the competitiveness of Brazilian companies,” Sukarie said.

Others important markets for Brazilian exports are Latin America, especially Argentina, Colombia, Mexico and Peru; followed by Europe, mainly Portugal and Spain; and Asia. Brazilian exports are concentrated in the service segment, which accounted for 83.5% of total ICT exports in 2013.

Brazil’s IT Offerings

In the software segment, the operations are concentrated in software on demand, software applications, help desk, software as a service (Saas) and business consulting in the IT area, explains Roberto Mayer, vice president of public relation from Brazilian Federation of Information Technology Companies (Assespro).

“There are great opportunities in the foreign market for companies that use platforms of multinationals, such as SAP and Oracle, to offer solutions focused on sectors in which Brazil has expertise, such as the financial, agribusiness, oil and gas and education”, said Gláucia Critter Chiliatto, international executive manager at Softext.

Sukarie believes that Brazilian companies have a competitive advantage in offering customized solutions and applications for mobile devices, for example, games for tablets and smartphones. “Brazilian companies should be competitive not only on price, but through their experience and innovation,” Sukarie said.

One Brazilian company that has stood out in the international market for its innovative solutions for large multinationals such as Coca-Cola, Johnson & Johnson, McDonald’s, Pfizer, Walmart and others, is CI&T. The company, which was founded in 1995 and has its headquarter in Campinas in the state of São Paulo, offers scalable enterprise applications using several technologies such as mobile, cloud computing, analytics and social media.

CI&T has offices in the USA, Japan, Australia, China and the United Kingdom. “The depreciation of the Brazilian real can help to boost exports, but our internationalization strategy does not depend on currency fluctuation”, said Leonardo Mattiazzi, vice president of Innovation at CI&T.

By using multinational platforms, CI&T invests in providing innovative solution as a competitive differential. The company, for example, helped to develop the Coca-Cola 2014 FIFA World Cup campaign in Brazil. The project was built in Atlanta using the Google Cloud Platform. Coca-Cola invited fans around the world to share their photos to create the Happiness Flag – the world’s largest mosaic flag crafted from thousands of crowd-sourced images, submitted by people in more than 200 countries. The flag was unveiled during the opening ceremony of the 2014 FIFA World Cup.

Last year, international operations accounted for 30% of CI&T’s annual turnover, an increase of 30% compared to 2012. This year, the company expects to reach the same growth rate in exports and it forecasts higher growth for the coming year.

Innovation as a Competitive Differential

Innovation is an important factor for Brazilian companies to achieve success in the foreign market. Aiming to support the internationalization of Brazilian companies, Softex created an innovation strategy program that counted the participation of 45 companies this year. Nine of them were selected to participate in events and fairs abroad, where they could present their innovation strategies.

For 2016, Softex, in partnership with the Brazilian Agency for the Promotion of Exports and Investments (Apex), intends to launch an international module of the internationalization program, Inter-Com, which will be held in Silicon Valley, California. Since 2005, Apex and Softex have had a partnership in a project to spur software and services exports. More than 220 companies have already participated in this program.

One of these firms is Interact Solutions, based in the state of Rio Grande do Sul, in the southern region of Brazil. The company, the developer of the corporate management suite called Strategic Adviser (SA), has operations in nine countries, mostly in Latin America, and it plans to start a business in the United States and Europe. “We are already negotiating with local partners in Spain and Portugal. In Latin America, we have ended our operation in Panama and we are prioritizing exports to Uruguay and Colombia,” said Fernando Estrada, international business manager at Interact.

In 2014, its exports will account for 10% of the company’s revenues, which should total 7 million Brazilian real (almost US$2.69 million). “Exports have increased on average from 20% to 25%. The goal is increase the export participation to 20% of the annual turnover by 2016,” Estrada said. The Interact Solution executive explains that the devaluation of the Brazilian real helps to boost export revenues but, on the other hand, it increases costs with licenses and travels.

The share of exports in the Brazilian IT market is still small compared to other Latin America countries. According to the Assespro survey published this year, only 17% of IT companies actually export. “Exports account for, on average, less than 10% of companies’ revenues,” Sukaire said.

Prohibitive Costs

The high costs in Brazil are making Brazilian IT exports less competitive when compared to others countries in Latin America. “The cost in Brazil can be 10% to 15% more expensive than in Colombia or Uruguay,” said Estrada, from Interact Solutions.

According to specialists, the large domestic market is one of the main reasons for the small share of exports in the IT market. Brazil is the seventh largest IT market, which handled US$61.6 billion in 2013.

Other factors that affect the competitiveness of Brazilian exports are the high taxes and expensive workforce, not to mention the high levels of bureaucracy when doing business in Brazil. Meanwhile, Glaucia from Softex points to other reasons that also hinder Brazilian exports, such as the lack of resources for investing in internationalization, difficulties with foreign languages and the lack of knowledge about others markets.

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Role Video: Former AMEX CIO Calls on IT Colleagues to Visit Mexico “See For Yourself” http://www.nearshoreamericas.com/cios-mexico-video/ http://www.nearshoreamericas.com/cios-mexico-video/#comments Mon, 17 Nov 2014 23:03:46 +0000 http://www.nearshoreamericas.com/?p=42382 By Duncan Tucker Corporate technology is only increasing in complexity and therefore CIOs from the United States better look closely at where their strategic IT partners are located, says Toby Redshaw, the former CIO at American Express who was one of the special guest speakers at the inaugural FutureSource Summit in Mexico City two weeks ago.  “The educational infrastructure here is ...

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By Duncan Tucker

Corporate technology is only increasing in complexity and therefore CIOs from the United States better look closely at where their strategic IT partners are located, says Toby Redshaw, the former CIO at American Express who was one of the special guest speakers at the inaugural FutureSource Summit in Mexico City two weeks ago. 

“The educational infrastructure here is fantastic and the work ethic is fantastic … We’re on the verge of Mexico moving towards being one of the top three places for IT talent partners,” said Redshaw, who was born in Mexico and previously served as CIO at American Express and Aviva, and also held a senior IT role  at Motorola.

Redshaw took part in the CIO panel on “Smarter Outsourcing Practices in an Era of Digital Disruption”, one of several highlights from the FutureSource Summit.

IT has become strategically important to every company in every vertical, he noted in an exclusive interview with Nearshore Americas’ Loren Moss. “Context is worth 80 IQ points,” Redshaw added, quoting computer science pioneer Alan Kay, and Mexico is well positioned to help corporations to bridge “the contextual gap between business and IT that has always been a problem.”

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In New York City Pitch, Argentina IT Elite Asks Observers to Look Past “Baffling Economy” http://www.nearshoreamericas.com/argentina-it-elite-argencon/ http://www.nearshoreamericas.com/argentina-it-elite-argencon/#comments Mon, 17 Nov 2014 14:37:51 +0000 http://www.nearshoreamericas.com/?p=42349 By Dennis Barker Can an animated film about foosball players that come to life also tell the story of Argentina’s tech services industry? At a promotional event recently in New York City to boost Argentina as a provider of high-end services to other parts of the world, they showed a clip from Metegol, a feature-length cartoon produced by Telefe Argentina using ...

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By Dennis Barker

Can an animated film about foosball players that come to life also tell the story of Argentina’s tech services industry?

At a promotional event recently in New York City to boost Argentina as a provider of high-end services to other parts of the world, they showed a clip from Metegol, a feature-length cartoon produced by Telefe Argentina using local animators in Buenos Aires. It was the largest animated film yet made in Latin America and did very well at the box office. Universal Pictures picked up its distribution rights in the region and in Spain, while other distributors bought it elsewhere.

Watch the trailer and you’ll see the quality. Visually speaking, only someone like Comic Book Guy could tell it apart from a Pixar or DreamWorks movie.

Like animated hits Toy Story or Frozen, Metegol tackles familiar themes of overcoming obstacles and learning to work together and never giving up. The movie has a lot going for it. It was directed by Juan José Campanella, who had earlier won an Academy Award for best foreign language film. It looks great; clearly the local animation talent is top-notch. The Metegol team operated as a lean machine, light on executives and layers. They hired less expensive local computer artists and paired them with more experienced mentors. If you’ve talked to software development companies in Argentina, this approach will sound familiar.

Value for Money

But one thing that sets Metegol apart from Hollywood computer-animation blockbusters is that it was produced for about US$22 million. A comparable project would cost three to four times more if done by a Hollywood studio, according to one estimate, and huge hits like Cars can run to $100 million.

So, here we have a world-class movie that has done well with a limited audience. Far from Animation Valley, a talented team completes a complex project on a budget that’s lower than a “top-tier” studio would spend. But, as The New Yorker asked in a great piece, can this nearshore underdog compete with Hollywood?

The parallels with some of Argentina’s tech services providers are probably clear. At last week’s event, sponsored by Argencon — a group of companies that wants Argentina to export more knowledge-based services to global clients — Metegol was held up as an example of local skills. Executives from HP and IBM and other firms also praised the local talent (“No mañana attitude!”) while talking up the services they deliver from Argentina, including airline reservations systems and engineering solutions for the mining industry. They want to sell more of these services to businesses outside Argentina and the region.

So do homegrown tech innovators like Globant. Globant started reaching out to global clients not long after starting up in 2003, and they now count Coca-Cola, Cisco, Google, and JWT among them. The software developer has 25 tech centers in Latin America and around the world, including in Boston, San Francisco, Austin and London. Earlier this year it became the first Latin American software company to launch an IPO on the NYSE.

Tough Times

If you follow the Latin America tech business, you will know that Argentina has a solid reputation for IT, BPO, and media services, a certain luster, even. Big players continue to set up tech hubs in Argentina.

But it’s been a rough year for Argentina. Its baffling economy has suffered setbacks like default and high inflation and temper tantrums. And if you really want something to cry about, there was that disaster in Rio.

So, you can’t blame Argentines if they want to think about the future instead. The NYC promotional event was called “The Future of Argentina.” At the beginning of the panel discussion, Argencon President Roberto Alvarez Roldan, a former Accenture exec, announced, “we will not talk about inflation.”

Can you blame him? But if the government doesn’t get it together, a big gloomy cloud of financial uncertainty could keep some global companies from investing in Argentina. No one at the promotional event was going to bash the government in Buenos Aires, but one economist there did refer to a need for “institutional and policy changes.” That’s one way of putting it.

If Argentina wants to increase knowledge-based exports and grow its tech service opportunities, then it will have to produce not just more tech workers, but high-level tech workers who can speak multiple languages. The country gets a new president next year. Boosting tech and knowledge-based exports probably won’t be near the top of the to-do list, but getting the economy something like stable can’t hurt. If little metal football players from a foosball table can come to life, maybe politicians and business can work together to clear the way for innovators. Argentina has certainly had grimmer things to deal with.

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FutureSource: For CIOs, Outsourcing Can Repair Range of Inefficiencies in the Enterprise http://www.nearshoreamericas.com/cio-inefficiencies-outsourcing-conference/ http://www.nearshoreamericas.com/cio-inefficiencies-outsourcing-conference/#comments Thu, 13 Nov 2014 16:40:37 +0000 http://www.nearshoreamericas.com/?p=42308 By Norberto Gaona Outsourcing is helping CIOs play a more strategic role within their organizations; it helps them to streamline operations, reduce costs, better meet business objectives and even to “manage managers”.  This was the consensus among the CIOs that participated in the “Smarter Outsourcing Practices for the new Digital Era” panel at the FutureSource Summit that took place in ...

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By Norberto Gaona

Outsourcing is helping CIOs play a more strategic role within their organizations; it helps them to streamline operations, reduce costs, better meet business objectives and even to “manage managers”.  This was the consensus among the CIOs that participated in the “Smarter Outsourcing Practices for the new Digital Era” panel at the FutureSource Summit that took place in Mexico City last week.

Moderated by Toby Redshaw, CEO at Kevington Advisors, the panel also benefited from the participation of Adriana Islas, CIO at Estafeta Mexicana; Juan Carlos Cedillo, CIO at Pacific Star Food Service; Oscar Mario Garcia, IT Manager at Financiera Planfia; and Marco Tulio Sandoval, President of the Mexican CIOs Association.

These CIOs agree that the image of an inefficient but expensive IT organization whose only function is repairing computer equipment is a thing of the past. “For years now we have been functioning much more strategically, even participating on the Board of Directors. It would be impossible to do this without the help of outsourcing services,” explained Adriana Islas.  “You have to outsource all activities that are considered to be a commodity; taking into account the specific needs of the business and areas in which IT can add value.”

Outsourcing plays a key role in meeting organizational objectives and strategies, says Oscar Mario Garcia. He also highlighted how outsourcing has helped raise internal service levels as well as greatly improving the clients’ perception of the company: “Before, my prevailing concern was to acquire infrastructure and expand our data centers; now our focus is the exact opposite.”

Managing Managers

According to Juan Carlos Cedillo, one of the best practices used by Pacific Food Service is that of managing managers. He explained how the experience he has gained in his eleven years working as CIO at Hasbro (where he helped start up operations in Brazil, Chile, Colombia, Mexico and Peru) taught him the importance of fully collaborating with outsourcing service providers.

“I work closely with some of the industry’s leaders and seek to establish win-win partnerships with service businesses. We like working with successful businesses that are used to making money as our own business is also used to making a lot of money,” he stated. “Incorporating a wide range of technology under the outsourcing scheme allows me to reduce operative costs, boost productivity and get rid of technology that has become obsolete.”

Cedillo explained how he has set up monthly meetings between the Directive Committee and outsourcing providers – now known as the IT Steering Meeting.  During this meeting, new IT initiatives are presented, and the providers explain which factors are key to the success of the operation as well as any problems that may be encountered along the way, and how best to solve them. “Outsourcing is definitely the key factor contributing to the success of my professional career,” states Cedillo.

Outsourcing and the Government

Marco Tulio Sandoval pointed out there is one main challenge facing government that outsourcing can help to overcome:  management changes to local, state and federal governments. When management changes are made, the new managers often have to reintegrate both the teams and the systems.

He says working closely with outsourcing technology providers gives you access to resources that know how to get things done well. The providers offer high levels of service and a stability that helps the government in question achieve better results.

Sandoval also spoke of his personal experience working as Director of the Miguel Hidalgo Delegation of Digital Government in Mexico City, where his department implemented (with the support of an outsourcing service provider) a system assigning appointments to obtain a driving license that allows citizens to make an appointment without the hassle of spending hours waiting in line. “This only came about thanks to the help of experienced outsourcing providers, who provided the high levels of service required by us, as defined in the contracts we signed with them,” he explained.

Sandoval also highlighted how during his work as Assistant Director of Sports Prognostics Computing for Public Assistance, a federal gaming agency, 80% of operations were outsourced. “We had to keep up with the best practices in the world and outsource the most critical tasks. This resulted in improved profitability, and helped me play a more strategic role – participating in the Board and making high level decisions,” he explained.

CIO Panel FutureSource:  For CIOs, Outsourcing Can Repair Range of Inefficiencies in the Enterprise

There’s no way of becoming more strategic as a business without utilizing third-party service providers, said Adriana Islas Molinar, System Director of Estafeta Mexicana.

Agility in the Cloud

At Estafeta Mexicana, the Cloud has also had a significant influence on business agility. According to CIO Adriana Islands, many of the company’s services are hosted in the Cloud.

“Now we do not worry about email, whether servers are available or not, or if a new application is required,” she said. “Now we don’t have two-year plans, which (used to be) unthinkable. Now we don’t have developments that take months before we can respond to the client; now we have to respond in weeks. And if we have a new client that needs to be integrated into the process, we can do it in a matter of days.”

“I think that in order to be able to advance at the necessary speed today there is no alternative to outsourcing services to third parties,” she added. “It’s like an octopus, you open all your tentacles and you extend your capacity for development, maintenance of infrastructure and all the rest. It’s something that now doesn’t have to consume so much of our time, instead it allows to look at what the business needs and how we’re going to support it and how we’re going to work at the speed that our clients ask for, both internally and externally.”

Creating Win-Win Scenarios

The CIOs also considered the importance of contracts when it comes to implementing IT outsourcing. For Oscar Mario Garcia, IT Manager at Financiera Planfia, this is one of the aspects that requires the most care and close collaboration with different departments, including the legal department, acquisitions and security, among others.

“For all the details that you can insert in a contract to integrate the technical aspects – the service agreements and matrixes of scale – there will always be differences, because businesses are changing as their needs and technologies evolve. Given the flexibility that may exist in contracts it’s very important to establish clauses for early termination, changes to infrastructure, and even clauses allowing the participation of other third parties as a backup should the provider not produce the expected results,” he said.

Adriana Islas emphasized the importance of the supplier being involved from the conception of the project, to assist in its development and work in a coordinated manner with the organization. This can help generate new ideas and identify alternative means of carrying out the project.

“While we always take care of the legal side and seek the support of the legal department of the company, it is important to define the way in which both parties work. We always look for a win-win situation. The penalties do not exist so that we can use them, I don’t want to have to document a fight with a business partner. What I want is for everything to go well and for both parties to win, and for everything to go according to plan,” Islas said.

With this in mind, Juan Carlos Cedillo of Pacific Star Food Service said that he aims to ensure that many of the outsourcing contracts that his company establishes are based on fixed prices and “not in time and materials.”

He also believes that it is important to provide incentives for outsourcing service providers. “If the provider finishes on time or ahead of time, they may receive a bonus. Of all the occasions in which we have signed a contract under these terms, half of the time the bonuses have been met. I prefer to reward people for getting thing done on time and in good quality than to fight with them for having failed.”

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‘Age of the Customer’ Is Not Just a Call Center Issue: Why IT Needs to Pay Attention http://www.nearshoreamericas.com/age-customer-implications-ito-bpo/ http://www.nearshoreamericas.com/age-customer-implications-ito-bpo/#comments Wed, 12 Nov 2014 22:20:43 +0000 http://www.nearshoreamericas.com/?p=42257 By Loren Moss Many pundits claim that we are in a new “Age of the Customer,” with advantages (and drawbacks) for both customer-facing companies and the consumers themselves. Access to information for customers allows them to make more informed decisions than was ever possible in the past. On the other hand, consumer-oriented companies have more, quantitative and qualitative data on ...

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By Loren Moss

Many pundits claim that we are in a new “Age of the Customer,” with advantages (and drawbacks) for both customer-facing companies and the consumers themselves. Access to information for customers allows them to make more informed decisions than was ever possible in the past. On the other hand, consumer-oriented companies have more, quantitative and qualitative data on customers, even at the individual level. Behavior patterning, voice biometrics, psychographic data, and predictive analysis give retailers the ability to specifically target their offerings towards customers.

What this is doing beyond the realm of retail is interesting. Forward-thinking enterprises are rethinking their relationship and interface with their employees, in some cases looking at them as “customers” of sorts. Business processes and workflows are re-examined with an eye towards employee engagement, similar to how retailers may analyze their “customer journey.”

Embracing New Attitudes

“It’s a step-up from earlier ergonomics principles due to the meeting of multiple disruptions at the same time such as automation, robotics, cloud services, mobility, and data-driven analysis. ‘Customer age’ should mean building simplicity and elegance in the way enterprises work and think, right from technology, people, and processes,” says Everest Group Practice Director Yugal Joshi. “It’s not only about ‘external-facing’ relationships, but the entire value chain. The way services are created and delivered. The way they are evolved and preserved. The focus should not only be on ‘revenue generation’ through commercial relationships and one more ‘sales channel,’ but fundamentally creating an efficient organization that runs lean. Digital transformation has the potential to perhaps provide more certain cost savings when leveraged across internal processes than the uncertain revenue enhancement through customer-focused strategies.”

What the Age of the Customer should mean for companies is the internalization of the concept that every person or entity a service is provided to, internal or external, as a customer. When this service attitude is embraced, not only is the soft benefit realized of increasing stakeholder engagement, but efficiencies are created and business processes are improved. Just as forward-thinking retailers are now focused on customer effort, the effort required to complete processes—not just for employees, but even applying this towards processes and workflows (man & machine) can be reduced, always leading to improvement.

As Joshi puts it, “Organizations need to focus on ‘stakeholders’ rather than just customers. Stakeholders should be everyone:  employees, partners, different business units beyond sales and marketing, IT operations, and of course customers. Too much obsession over the ‘end-customer’ will be counterproductive. Unless the entire value chain is digitized, piecemeal adoption may only improve one aspect and create inefficiency across others. It is easier to get funding for sales and marketing initiatives as they are perceived to provide quick RoI.”

Joshi continues: “However, internal operations that already are termed and are stigmatized as ‘cost centers’ find it hard to get the needed funding. This disconnect between the front-end processes catering to the consumers and the enabling processes done by back-end resources, creates overhead for the organization and an overall inferior experience for the consumer as well. When you have a hammer everything looks like a nail. Therefore, though front-end processes appear a de-facto choice, they must be in sync with the back-end in terms of digital adoption for an enterprise to really succeed.”

Get With It

Going forward, successful companies and organizations of all types, including nonprofits, will do well to embrace the age of the customer, and internalize it into their organizational culture. When this approach is applied to every process, internal and external, the organizations improve and function better. Just as the Information Age ushered in previously unknown applications for analytics, and what eventually became known as “big data,” the Age of the Customer is the rational evolution from this, allowing organizations to use those foundations to drive real and tangible improvements, internally and externally.

“What many organizations are not realizing is that digital strategies should make them rethink and re-imagine their role towards all the stakeholders in the enterprise, not only the customer,” adds Joshi. “For sure, customer success is key to the business, however, it is tightly linked to organizations’ overall perspectives about customers and other stakeholders—how much they respect, understand, and value all the stakeholders. Successful businesses always kept customers at the center and designed their business models around them. Laggards never did that. Digital strategy will not change this. Not all enterprises will become ‘customer aware’, and there will be winners and losers. However, unlike other technology disruptions, digital is deep rooted and can create existential crisis for enterprises that are unwilling to leverage it or change accordingly.”

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Slideshow: Speed-Matching Brings Buyers Closer to Mexico http://www.nearshoreamericas.com/speedmatching-sessions-outsourcing-conference/ http://www.nearshoreamericas.com/speedmatching-sessions-outsourcing-conference/#comments Wed, 12 Nov 2014 02:21:31 +0000 http://www.nearshoreamericas.com/?p=42275 By Duncan Tucker “Without question, the speed-matching session was one of my personal favorite parts of FutureSource Summit,” declared Nearshore Delivery Services partner Luis Derechin, who was among one of over 100 participants in the high-speed networking session that took the first year conference – held last week in Mexico City –  to a whole new level.  Buyers from leading ...

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By Duncan Tucker

“Without question, the speed-matching session was one of my personal favorite parts of FutureSource Summit,” declared Nearshore Delivery Services partner Luis Derechin, who was among one of over 100 participants in the high-speed networking session that took the first year conference – held last week in Mexico City –  to a whole new level.  Buyers from leading U.S. and multinational tech companies and financial institutions including Google, State Street, RealD, Honeywell, Staples, Teradada and Cisco Systems were paired up with Mexican, Costa Rican, Indian, US and Argentine IT and BPO service providers, software developers, outsourcing advisors,  and recruiting agencies.

Conference delegates commented that the speed-matching, or match-making, concept is still a rarity in Mexico executive conferences and applauded the ‘ice-breaking’ nature of making instant connections.

Like a version of Mexican musical chairs, the sellers would change places after every micro meeting in order to reach as many people as possible. This rapid form of networking enabled delegates in attendance to make introductions and exchange business cards with potential partners and gain some indication of who their perfect match might be.

“We worked very hard to establish the ideal ratio of buyers to sellers, giving both sides of the aisles a chance to gain maximum value from these quick interactions,” said Kirk Laughlin, managing director of FutureSource Group, which hosted the two-day conference.

blank Slideshow: Speed Matching Brings Buyers Closer to Mexico

blank Slideshow: Speed Matching Brings Buyers Closer to Mexico

blank Slideshow: Speed Matching Brings Buyers Closer to Mexico

blank Slideshow: Speed Matching Brings Buyers Closer to Mexico

blank Slideshow: Speed Matching Brings Buyers Closer to Mexico

blank Slideshow: Speed Matching Brings Buyers Closer to Mexico

blank Slideshow: Speed Matching Brings Buyers Closer to Mexico

blank Slideshow: Speed Matching Brings Buyers Closer to Mexico

blank Slideshow: Speed Matching Brings Buyers Closer to Mexico

blank Slideshow: Speed Matching Brings Buyers Closer to Mexico

blank Slideshow: Speed Matching Brings Buyers Closer to Mexico

blank Slideshow: Speed Matching Brings Buyers Closer to Mexico

blank Slideshow: Speed Matching Brings Buyers Closer to Mexico

blank Slideshow: Speed Matching Brings Buyers Closer to Mexico

blank Slideshow: Speed Matching Brings Buyers Closer to Mexico

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FutureSource: How Serious is the Demand for IT Talent in Mexico? http://www.nearshoreamericas.com/futuresource-panel-businesses-proactive-developing-mexicos-human-talent/ http://www.nearshoreamericas.com/futuresource-panel-businesses-proactive-developing-mexicos-human-talent/#comments Mon, 10 Nov 2014 21:43:44 +0000 http://www.nearshoreamericas.com/?p=42234 By Duncan Tucker Tech companies need to take up a more proactive role in working with Mexican universities to ensure that they are producing graduates with the right skills to meet their needs. That was the message from a number of industry experts in a panel on human talent on day two of the inaugural FutureSource Summit in Mexico City’s ...

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By Duncan Tucker

Tech companies need to take up a more proactive role in working with Mexican universities to ensure that they are producing graduates with the right skills to meet their needs. That was the message from a number of industry experts in a panel on human talent on day two of the inaugural FutureSource Summit in Mexico City’s Four Seasons Hotel. Meanwhile, Mexico must focus on producing more business leaders to complement its many skilled technicians, the participants agreed.

Chaired by Nearshore Americas Managing Director Kirk Laughlin, the panel on “Talent Acquisition in Competitive IT and Digital Industries” was comprised of João Nunes, Executive Director of British-based recruitment firm Michael Page; Manuel Lopez, Global IT Director at Gowan Company; Enna Zarate, CIO & Vice President of Marketing and IT at DHL Express; and Eduardo Campos, CEO of ScreenIT, a talent acquisition firm based in Queretaro, Mexico.

Shortage of Business Leadership

“We need more business-orientated people and that’s an issue in Mexico, because I believe that we have enough talent in operational terms, but not enough people with good business views and capacity for innovation. That’s a problem that we face right now,” Nunes said.

“We have people with very good skills here in Mexico and with the right coaching and the right education, people can learn more things not only related to systems. They also need to have higher education in management and they need to be well prepared for the realities and the necessities of the country,” he explained. “We have very good CIOs in Mexico and very good operations people, however when we talk about middle management, people with business intelligence and so on, it is difficult to find them.”

Campos believes that solution it to encourage technicians to specialize more in their areas of expertise; and that instead of bringing them in to management roles, companies should prepare others to take up these positions. “We definitely need more effort around making senior technicians more specialized in certain technologies. Sometimes they get to a certain level but it seems to me that there is a management deficiency,” he said. “They don’t understand the business processes, but if they’re senior technicians it seems that their next natural move is to be a project manager or even a director for the company. I’m not sure if that should be the case, but it’s happening.”

FSS human capital panel3 FutureSource: How Serious is the Demand for IT Talent in Mexico?

Some companies are having to wait for the development of human talent to meet their needs in Mexico, noted Eduardo Campos, CEO of ScreenIT (left).

“Most companies are more focused on the technical side but we need to go to other areas to learn about finances,” added Zarate, who argued that businesses need to be bold and provide workers with the opportunities to grow and learn in new areas. “Right now companies need to find the right people for the changing challenges the organization is going through in any moment,” she said. “I’m the CIO and VP of Marketing at DHL Express, without having experience in marketing. My company has the awareness to give employees the opportunities to learn or fail. What we need is more organizations where we can give our talent the opportunities to learn and understand the business part.”

Companies Must Take Responsibility for Preparing Talent

Although Mexico is producing over 100,000 graduates in IT-related fields every year, some companies are still facing difficulties in finding talent with the skills that they require. “I’ve had to adapt my organization to the person’s talent because I can never find the right person for the right job,” Lopez said. “Definitely it’s a challenge. One thing that’s a blessing today are networking technologies that are able to find the talent and that has opened doors to be able to find talent.

With numerous international corporations looking to hire on a large scale in Mexico, Campos noted that there will inevitably be some delays in readying the necessary workforce. “I’m excited to say that I’ve seen more and more of the academies working closely with companies in terms of training graduates in business. That’s helping a lot to develop the market but the thing is we have a gap in terms of the pace. The companies need this talent now, but we need to wait probably three or four years more to develop the talent that the market is demanding,” he said.

Nunes agreed that if companies are relying to universities then they “need to wait because the changes will take a while, in some cases five to ten years with regard to some areas of technical expertise.” When asked whether Mexican universities are being flexible enough to change their curriculums to meet companies’ needs, Nunes stated that “universities are not ready and probably they will never be ready” because of the ever-changing nature of the market and the demands of businesses. “Sometimes the company must take responsibility for the education of its future employees. The companies search for people who are already ready, they are not willing to spend lots of money on teaching this kind of expertise,” he added. “Companies have to face the responsibility that they have to prepare the talent.”

There are some positive examples of cooperation between tech firms and universities sin this respect, Lopez noted: “I’ve seen the University of Tlaxcala work together with Oracle and they created this program certified by Oracle. I think that’s a good partnership, you have to have the universities and the technology companies working together.” In another positive development, Lopez observed that it has also become more common for Mexican universities to send students abroad on exchange programs that help them develop a broader perspective and gain a better understanding of the opportunities and their own potential.

FSS human capital panel2 FutureSource: How Serious is the Demand for IT Talent in Mexico?

Mexico has plenty of skilled engineers but needs more business-savvy leaders, the panelists agreed.

Can Work-at-Home Work in Mexico?

The deployment of work-at-home agents has become increasingly common in the United States, but it remains a rare occurrence in Mexico’s IT sector. Nunes believes that “people can be more productive working at home rather than being at the office,” but Campos noted that many companies in Mexico are not yet ready for this. “Some companies don’t have the capacity to control the work, to program and schedule the time for people to work at home. It’s a matter of companies being prepared and ready,” he stated.

The biggest barrier is the lack of trust in Mexico, Lopez interjected. “It’s a big cultural difference between Mexico and the U.S in terms of trust. If you don’t trust your employees of course you want to see them sitting there at the workplace and have another person over their shoulder to see what they’re doing,” he said. “In other countries where they have trust they encourage productivity because the worker feels it’s their responsibility to provide a certain outcome regardless of where they’re working. That trust is something we need to build in Mexico.”

Toward the end of the session the panel took several questions from the 125 delegates in attendance. Mark Ferri, IT Senior Manager at U.S. multinational Cisco Systems, asked if it was common for companies operating in Mexico to offset any talent shortages by bringing in people from other countries.

“If you have an international company it’s easier to adapt a foreigner because they are used to teaching that person how to deal with the culture and the language,” Campos replied. “But when you talk about a Mexican company, I don’t suggest that you look to bring someone from outside Mexico if the company doesn’t have the experience of having foreign staff.”

He explained: “The person could have a good business orientation in Europe but that’s not the same business orientation that you would have in Mexico. So we need to be careful about bringing people into Mexico. It is possible but the company must be ready to do it, because sometimes the importation of talent from other countries can be a disaster for the company.”

 

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Mexico Urged to Flaunt its Strengths at Day One of FutureSource Summit http://www.nearshoreamericas.com/mexico-urged-flaunt-strengths-day-futuresource-summit/ http://www.nearshoreamericas.com/mexico-urged-flaunt-strengths-day-futuresource-summit/#comments Fri, 07 Nov 2014 03:40:25 +0000 http://www.nearshoreamericas.com/?p=42204 By Duncan Tucker Mexican service providers and their potential clients in the United States are both missing out on mutually beneficial business relationships because of a lack of communication and problems of perception. The pressing need to solve the lack of understanding on the U.S. corporate side was one of the clearest messages to emerge from day one of the ...

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By Duncan Tucker

Mexican service providers and their potential clients in the United States are both missing out on mutually beneficial business relationships because of a lack of communication and problems of perception. The pressing need to solve the lack of understanding on the U.S. corporate side was one of the clearest messages to emerge from day one of the inaugural FutureSource Summit at Mexico City’s Four Seasons Hotel on Thursday.

As Daniel Chavez, the CEO of Monterrey-based software developer Dextra Technologies put it, Mexico’s offering is “not about labor arbitrage” – although it has many key advantages that offset wage differences – and it should not necessarily been seen as a destination that replaces India in buyers’ minds. Instead, Mexico can complement offshore operations.

“Our business models are changing to a consumption-based model and our cycle times are changing. We need to be able to produce capabilities much faster than we could before. This isn’t about killing India so much as really becoming global companies,” said Mark Ferri, IT Senior Manager at U.S. multinational Cisco Systems, in an insight-crammed Super Panel on “Collaboration and the New Demands of Americas’ Outsourcing Leadership.”

FSS crowd Mexico Urged to Flaunt its Strengths at Day One of FutureSource Summit

The attendees engaged in lively discussion with the guest speakers throughout day one.

The key to success is “right-shoring,” knowing where to outsource certain functions to the right places, explained Ferri. He urged Mexican sellers to talk up their agile development models and explain to U.S. companies how they can leverage both offshore and onshore locations in order to prosper.

Bridging the Continental Divide

“The conservative nature of U.S. businesses is extremely frustrating” when it comes to exploring the opportunities that Mexico offers, said Jon Butler, Principal Consultant at technology advisory firm ISG. In order to break through that, he urged Mexican providers to bring potential clients to their centers so that they can witness the reality of the situation south of the border.

Mexican sellers must also improve their communication skills in order to showcase their talents more effectively, Butler added. “Please talk in English,” was his frank advice for providers when they pitch to potential clients from the United States. “It’s not because I don’t respect your country or your culture, but because I see all of you as future leaders and when you’re up on the global stage English is an important language.”

FSS Kirk Mexico Urged to Flaunt its Strengths at Day One of FutureSource Summit

Nearshore Americas Managing Director Kirk Laughlin welcomes the audience to the inaugural FutureSource Summit.

“People in the U.S. understand the Mexican work ethic but they don’t recognize the ingenuity and problem-solving capabilities of the Mexican people,” Butler explained. Hence increasing Mexico’s English-speaking capabilities is paramount for the country in order to stop underselling itself and realize its potential, he said.

That potential is evident when you delve into the numbers and examine the talent that Mexico is producing.

Ten years ago, the nation had negative growth in the number of students graduating in IT-related fields each year, revealed Alfredo Pacheco, CEO of Mexico’s National Chamber of the Electronics, Telecommunications and Information Technologies Industry (CANIETI). “Right now there are more than 100,000 IT-related professionals graduating each year, that’s more than in the U.S. and Brazil, countries that are two or three times bigger than Mexico,” he added.

Moreover, the number of Mexican service providers has grown from just 25 to around 400 in the last 12 years, noted Daniel Chavez, the CEO of Monterrey-based software developer Dextra Technologies.

FSS 3DRobotics Mexico Urged to Flaunt its Strengths at Day One of FutureSource Summit

Tim McConnell explains how 3D Robotics prospered through cross-border colaboration in his live case study.

Collaboration Breeds Success

Prior to the super panel, a great example of the success that can be achieved through cross-border collaboration came from Tim McConnell, Vice President of Engineering at 3D Robotics, the world’s second biggest commercial drone manufacturer.

Headquartered in Berkeley, California, 3D Robotics has engineering facilities in San Diego and a manufacturing facility in Tijuana, Mexico. “I’ve found it so easy to interact with the folks in Tijuana, there’s really no cultural barriers and everyone there speaks English very well,” McConnell said. “If we need to discuss something then I can get in my car and I’m there an hour later. It’s a wonderful relationship, a wonderful close collaboration.”

3D Robotics produces drones for commercial use in many industries – anything that’s “dull, dirty or dangerous,” McConnell said – including agriculture, infrastructure maintenance, construction, conservation and extreme sports. “We get really great engineering talent down there, there’s some terrific universities in the Tijuana area, as well as in California, so we’ve got engineers on both sides,” he added.

 

FSS matchmaking Mexico Urged to Flaunt its Strengths at Day One of FutureSource Summit

The 125 buyers and service providers were paired up in speed-networking sessions.

In comparison with offshore destinations like India and China, McConnell emphasized that Mexico has many significant advantages. Aside from the obvious benefits of Mexico’s geographic proximity, shared time zone and strong cultural affinity with the United States, it also provides much greater protection of intellectual property, he noted: “the folks that I’ve dealt with in Mexico are so focused on maintaining IP security and that’s just not something I’ve seen on the other side of the Pacific.”

Once the presentations and panels were over, the 125 delegates in attendance took part in “Speed-Matching” sessions, a rapid form of networking in which buyers are paired up with service providers in five-minute slots before moving on to meet more potential partners.

FSS refreshments Mexico Urged to Flaunt its Strengths at Day One of FutureSource Summit

Delegates were treated to Mexican cuisine and of course tequila at the end of the day.

“My main target is to network with key people that I have identified,” said Pablo Gallegos, Country Manager of Tech Mahindra, which only recently initiated operations in Mexico. In the next 24 months we hope to have around 500 people across Mexico, he added. Why now? The recent reforms to Mexico’s energy and telecommunications sectors make this the ideal time to invest in the country, Gallegos explained.

Companies like Pemex (Mexico’s state-owned oil and gas company) will need a lot of IT services” in the wake of recent changes to open up the industry, he said. “There are huge opportunities to take advantage of here.”

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