After two years in Silicon Valley, the executive Sergio Pessoa, responsible for Apex Brazil’s office in San Francisco, is back in Brazil with a mission to drive the expansion of Todo! Technology Solutions. Todo! is a subsidiary of the Contax group, the largest contact center company in Brazil and one of the world’s largest business process outsourcing (BPO) companies, specialized in customer relationship management (CRM).
Pessoa has been a global business development executive and was responsible for promoting global market initiatives at Brasscom. He has a Bachelor of Science degree in Computer Science from Unicamp, Brazil, and an MBA from the University of Chicago. In an exclusive interview with Nearshore Americas, he discussed the next challenges in his career.
Nearshore Americas: Why did you decide to return to Brazil to take on the position as managing director at Todo!?
Sergio Pessoa: I lived in the United States from 1995 to 2013, and the main reason for accepting Contax group’s invitation was the challenge of transforming the group technology branch (Todo!), which was created in 2009 and is a strategic segment for the company. I started working as a technology consultant, having worked for large firms such as Accenture and Daugherty Business Solutions. I also worked for a managed services solutions company, where I led the service desk operation for McDonald’s in the U.S., England and China. At Motorola, I led the development of public safety applications. Lastly, my experience at Apex and at Brasscom allowed me to understand the challenges involved for a Brazilian technology company in the internalization and innovation processes. So, there was an alignment of my experiences with the needs of the group that led me to return to Brazil.
NSAM: What are the company’s focus areas?
Pessoa: The Contax Group is a leader in the contact center area in Latin America and the fourth largest company in the world in the BPO segment. Technology is at the core of Contax’s transformation plan and you need technology to improve service quality and productivity. In this context, four lines of business were created at Todo!. In CRM intelligence, for example, we create award winning solutions for leadership and innovation. On the other hand, there is the challenge of managing several operational sites and to have excellence in the IT environment management is critical for this business. In addition to that, acquisitions have allowed Todo! to gain experience in software development. Finally, in the engineering segment, the ability to develop structural projects and infrastructure network is important for creating a new business line to attend the requirements of large events. Thus, we intend to create innovative solutions to leverage not only the business with Contax, but also with others clients, which accounts for almost 50% of Todo! revenue.
NSAM: What are the company’s plans for growth?
Pessoa: Over time, the growth of the traditional contact center model, based on workstations, tends to stabilize. On the other hand, the demand for higher quality and more efficiency means more technology. The sector has grown above GDP over the last ten years and our expectation is that it will continue to grow strongly. This year, the group will invest 200 million Brazilian Reals (US$71.4 million) in technology and we intend to double in size over the next two year in the IT segment. We plan to extend our capacity and we are also looking to inorganic growth through acquisitions.
NSAM: Does the company have plans to compete in the global market?
Pessoa: Internationalization is a strategic point for the company. The Contax group has operations in Argentina, Colombia, Peru and Chile, and serves other markets such as the United States and Spain. I have plans to make Todo! globally competitive. Latin America will be the first step, but I have ambitions to go beyond that market in the future.
NSAM: A study from The Economist put Brazil in 15th place in a ranking of globalization in the ICT area. Exports account for less than 6% of the IT sector revenue in Brazil. What are the main barriers for Brazilian companies toward internationalization?
Pessoa: The size of the Brazilian market is an inhibitor for internationalization, because companies feel comfortable with existing opportunities in Brazil. The complexities of the Brazilian market, such as the language barrier and high taxes and labor costs are also important. Companies that want to operate in global markets must be competitive in price terms, because they are competing with companies from India or from Latin America countries, such as Colombia and Mexico, which have lower costs than Brazil. Meanwhile, there is also the matter of mindset. Brazilian entrepreneurs did not look very much to the international market. But this is changing with the new Brazilian generation, which has already acquired a more global mindset.
NSAM: In which areas does Brazil offer competitive advantages?
Pessoa: The IDC study showed that Brazil is the fourth largest ICT market in the world, and the seventh largest in the IT sector. The participation of services is much higher than products and certain factors explain this. First of all, the initial internationalization cycle, almost 10 years ago, was more focused on services, especially in solutions for the financial market, a sector in which Brazil has strong expertise. Some companies that have exported products have had a focus on bank security. But there are other opportunities beyond the financial sector, as, for example, in the telecom and retail sectors. Brazilians are very creative people and this is very important for innovation. Furthermore, companies that want to provide IT services to the American market have the advantage of Brazil being in the same time-zone as the United States, unlike India and China. But Brazilian companies must be prepared to operate in the US, which is a more sophisticated market.
NSAM: What remains to be done for Brazil to become more competitive in this area?
Pessoa: The government has offered great incentives since the exemption of the payroll, which was very important for reducing costs. There are programs such as Brasil Mais TI and Pronatec, which are targeted at professional training, and others initiatives to stimulate innovation. However, there is a lack of investment from the private sector. In Brazil, private sector investments in R&D (research and development) are much smaller when compared either with the United States or Europe. On the government side, it will be necessary to create specialized programs focused on demand, in order to develop the technology industry in the most strategic areas. What is lacking in Brazil is a strong ecosystem able to leverage these things, such as in Silicon Valley. In Brazil, there are good universities doing researches, but they haven’t focus on market. On the investment side, we already have a system of accelerators to support startup companies, but there are still many more funds focused on private equity than venture capital, and companies can’t rely on an IPO as they can in the U.S. So, the ecosystem of Brazil is still very shy, but it is improving.