Add Wipro to the List of Latin America Outsourcing’s True Believers

In the eyes of Manoj Punja, Wipro’s Chief Sales & Operations Officer Latin America & Focus Countries, the outsourcing opportunity in Latin America is “phenomenal.” “There is so …

Wipro's Punja

In the eyes of Manoj Punja, Wipro’s Chief Sales & Operations Officer Latin America & Focus Countries, the outsourcing opportunity in Latin America is “phenomenal.” “There is so much activity from an economic sense,” says Punja, whose firm can be added to the growing list of Indian-based multinationals who are keen to become more  entrenched into the fabric of Latin America IT commerce. “We have singled out Latin Americas as a special region to focus on.”But how hard is Wipro going to push on the accelerator to become a key player in the region?

Recently rumored to be another tier one Indian player ready to set up operations in Colombia (which would put the firm in the company of TCS, and also Genpact – which NSAM recently confirmed as a ‘go’ for Colombia), Wipro also has delivery hubs in Curitiba, Brazil and Monterrey, Mexico.

Play Hard

Although vastly smaller than what rival TCS has committed to the market (TCS has over 7,000 associates spread across the region versus 650 for Wipro), Punja and his associates sound like they are going to play harder in the Latin American market and contend for more domestic business. Wipro’s presence in Brazil began in 2008 through a shared services deal with the giant brewery company, AmBev.  The firm had set up operations in Monterrey the year before.

Heading up regional operations is Fabio Daniel, VP & Geo Head for Latin America, who stepped down as CEO for Softtek  Mexico to join Wipro last fall.

Heading up regional operations is Fabio Daniel, VP & Geo Head for Latin America, who stepped down as CEO for Softtek  Mexico to join Wipro last fall. In our interview recently, Daniel emphasized that Wipro is going after niche opportunities requiring specialized services and talent. “What we are doing differently is we’re not focusing on general outsourcing, but instead high end services,” he says. Service offerings include application development and maintenance, cloud computing services and “second generation BPO.” “We are doing cloud services combined with IT and BPO in a more sophisticated way. We are doing heavy lifting locally, leveraging the depth and specialization that is available here in order to bring higher value to the customer,” he says.

Over 60% of Wipro’s IT business worldwide is generated from the Americas. Therefore it makes perfect sense for Wipro to follow in the footsteps of so many other firms by providing services in the classic Nearshore model. About 20% of services provided out of the Mexico operations are considered “nearshore” and could include delivery to US clients as well as other firms in Latin America, says Punja.

Brazil Weighting

How much weight is Wipro under operating in a high-cost market like Brazil? Both Punja and Daniel remarked that doing business in Brazil is challenging. “The labor law are very protective, and the fringe benefits (in Brazil) make up a big part of the overhead,” says Daniel.

In regards to other markets, such as Colombia, Punja says: “There are certainly countries that are relatively cheaper, outside of the main markets.” He cited the possibility of ‘taking work out’ of Brazil and delivering those services from a neighboring country.

Does that mean Wipro is shopping for a new center in Uruguay, Paraguay or an off-the-radar spot like Guyana?

“Some of the countries that have lower costs, such as Peru, Costa Rica .. ,” says Daniel, “you run into issues of scale. Populations are low and the number of people graduating is not so large. In some of those countries also you have some infrastructure issues.” Costa Rica, for example, has one of the lowest performing telecom markets in the region because the local incumbent, I.C.E., has had a strange-hold on the commercial market, essentially squashing competition and ICT innovation. The market – as President Laura Chinchilla told us on video last year – is in the process of opening up and should trigger better service quality.

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Only time will tell, but clearly Wipro is out there shopping and kicking the tires on a market that is showing phenomenal upside.

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