The path Wipro has followed in establishing a presence in Latin America has not exactly been smooth or consistent.
Originally, much of the company’s thrust into the region was generated by a significant domestic-focused presence in Brazil. The other leg to its LatAm strategy was to take hold in Mexico, but a series of leadership changes and overall lack of vision led to disappointing results and a sense that Wipro would never manage to contend with a familiar competitor – Tata Consultancy Services (TCS) – which famously grew a sizeable presence in Latin America starting in 2001 and never looked back, accumulating over 12,000 associates in over a dozen markets.
Wipro, meanwhile, remained in the slow lane – clearly not getting the same boost of attention and investment during the 2000s that TCS enjoyed from senior leadership back in India.
Fast forward to 2017 and Wipro is starting to finally carve out its identity in the Latin America outsourcing sector, formed around an intense focus on business process services (BPS) instead of the classic ADM functions that characterized the emergence of TCS.
Clearly a big factor in the acceleration of Wipro’s activity stems from the placement, two years ago, of Ankur Prakash, who holds the title of Vice President of New Growth and Emerging Markets. Prakash was one of the key operational leaders to guide development of TCS’s Nearshore and domestic operations, before departing in 2014.
The Mexico Factor
As is the case with so many global IT consultancies, performance in Mexico often serves as a bell-weather market to test whether an operator can develop the foundation to serve both domestic and international clients. Under Prakash’s leadership, Mexico has become an especially crucial focus market.
Established in 2016, Wipro’s Guadalajara site is fairly new, but has become the fastest growing location for the company. The company’s first facility is already at capacity with 750 full seats (600 in BPS, the rest in IT), while 300 have been built out in a new site (120 of which are BPS), which has a capacity of 1,100.
Regionally, Wipro has around 1,700 people in BPS, so Mexico represents the bulk of their LatAm focus.
“This has been completely unexpected; the kind of growth we are seeing in Mexico is unprecedented,” said Gurmohan Dugal, Head of Business Process Services for Wipro Latin America.
Strengths and Weaknesses of Mexico BPS
Wipro’s BPS division started with around 120 people in Mexico. Today that same business unit has just over 870 employees – 150 in Mexico City and 720 in Guadalajara, according to Dugal.
The company tested the water with Monterrey, but found that cost, connectivity, and US risk perception was better in Guadalajara, despite the latter still being a concern for US buyers.
“One of our clients, when comparing security concerns with Colombia, said that Mexico had one thing that no other country does – CNN,” said Dugal. “He said that when something small happens in Mexico, CNN blows it up like nobody’s business in the US, but when you come to Mexico it’s like any normal place – you can go out, party, and generally feel safe.”
Dugal describes the Guadalajara and Mexico story as being broken down into two parts: the first, is what Wipro is doing for local customers, such as a couple of large Mexico-based banks, and the second is what Mexico can do for Nearshore clients in the US.
“Nearshore has become critical for us and a major differentiator,” he said. “Typically, the US work always went to Guatemala, Costa Rica, or the Philippines. A lot of our customers now say that Philippines is not that good of an option, as the location is fairly saturated.”
Wipro’s clients see Guadalajara as an attractive option when comparing the cost base to a Philippine operation, as it is “at least 10-15% cheaper”, and, when comparing to India, it is “around 10% more expensive”, according to Dugal.
Talent Acquisition and Retention
Initially, Guadalajara was intended for Spanish language services, but that changed to a 50-50 split with English and Spanish once a client saw the capabilities of the city’s talent.
Wipro has, according to Dugal, never had an issue hiring people in Guadalajara, unlike in India. The company is sourcing this talent from local universities, allowing it to ramp up 100 people in 4 weeks flat. Over a year, this represents over 1,000 people, which is helped along by an attrition rate of only 20-22%.
“In Guadalajara, you can find talent for multiple industries,” said Dugal. “We have contact center, health services, pharma services, finance and accounting analytics, L1 and L2 back office support, and order management.”
Wipro offers full-time contracts to new employees, something that Tata Consultancy Services also offers, but Dugal stated that many competitors still do not take this route. The company has found that staying away from agency hires and temps is creating a more collaborative culture.
“Mexico culture leans heavily toward the inclusion of family and friends, and this enjoyment of working together has led to 30% of new hires coming from referrals,” said Dugal. “On one side, this is a risk if you anger someone because you may find a horde of people leaving together but as long as you can get it right, the company culture benefits from this. People need to feel aligned to each other and the organisation to enjoy coming to work.”
For those that leave the company, Dugal has found that most people are either moving to the US or enrolling into education commitments, which is something he doesn’t see in India or the Philippines.
Dugal stressed that the “silver bullet” in most companies’ talent retention schemes in the region is to pay more, which he doesn’t believe works. Instead, the knowledge that the company is growing and providing opportunities for development makes a lot more sense.
Regional Challenges and Future Outlook
Attracting talent in Central America, particularly Costa Rica, Guatemala, and El Salvador, has been a challenge for Wipro, predominantly because of the size of each country.
“In Central America, you get around 6,000 to 7,000 fresh college graduates in each country per year, which is the same as I would get in Guadalajara every quarter,” said Dugal.
Even so, thanks to a new contract acquired recently, Wipro is adding 200 people to its 200-strong workforce in the Costa Rica facility this month, which was only recently established in July 2017.
Here, the company is providing back office support, both for Latin America and the US, but, surprisingly, also a small team of 10 people providing support to India in English.
“Internally, the site will be a backup for Guadalajara, in terms of English-language support,” said Dugal. “If you look at Peru, Brazil, or Colombia, you won’t get English language. The government spends a lot more on teaching people English in Costa Rica, which is difficult to find in other places.”
Being a fairly new player in the region, Wipro has had to face its biggest challenge of building brand value and recognition. However, thanks to its talent acquisition and retention strategy, the company should be able to continue carving a path in the regional BPS market.