Data Center Modernization within Latin America Becomes a Sweet Spot for Unisys

Traditionally, nearshore BPO has been looked at as a North-South proposition. Lower cost Caribbean and Latin American service providers offered cost savings to U.S. and sometimes Canadian and …

Traditionally, nearshore BPO has been looked at as a North-South proposition. Lower cost Caribbean and Latin American service providers offered cost savings to U.S. and sometimes Canadian and European service buyers.  Over time, as Latin American homegrown business has become increasingly more sophisticated, and as rising wages mitigate the historical advantage from a labor arbitrage point of view, this relationship has become more complex.

Today, Latin American businesses are truly global and require the same services as any other international business. This has caused a widening in focus for the nearshore BPO provider from serving primarily North American customers to soliciting and servicing domestically domiciled businesses and those headquartered or located in neighboring countries.

While this has always taken place for the smaller and mid-sized enterprise, the industry is now witnessing a maturity of this offering at the top level, also. According to IDC, the majority of the 3500 largest Latin American companies are growing or modernizing their data centers, spending on the process an estimated $3 billion in 2013.  According to Frost & Sullivan, Brazil’s data center market alone accounts for $1.6 billion in expenditures during 2012 with a growth rate of 11.3 percent. This means that the smart global or regional BPO provider is no longer only looking north, or across the Atlantic for potential customers.

Midsize and large companies domiciled in Central and South America provide ample opportunities for the nimble provider. One example demonstrative of this progression is Unisys. With over a century in Brazil, 90 years in Mexico and 60 years in Colombia (previously as Burroughs and Sperry Univac), Unisys has evolved over time, along with the market.

North-South Paradigm

Not content to comply with the traditional North-South paradigm, Unisys and companies like it are focusing on business close to home.  “For example, we have a big BPO operation in Brazil for the largest mortgage bank in the country. We process all of their mortgages in Brazil, we own the system, the platform; it runs in our data center.  It’s full outsourcing and we have 400-500 people dedicated to just that operation,” explains Helcio Beninatto, General Manager and Vice President for Global Managed Services, Unisys Latin America. “I joined a year ago to help expedite the growth strategy in the Americas, and we have been very successful. The midsized companies here are not very well served because they are companies that are growing.

They had low quality service providers in the past but now they are looking at Unisys, and we want to help them grow so that we can grow together,” continues Beninatto. “Henkel, for instance, is a German company that we provide services for worldwide…We have several global contracts where we provide services across Europe, Asia, Latin America and North America.” Unisys still has very close working relationships with global companies like Henkel, which recently chose Unisys for monitoring and network support in eleven different Latin American and Caribbean countries.

This arrangement features managed service centers in Colombia and Brazil, along with on the ground support in those epicenters as well as México, Venezuela, Perú, Guatemala, Jamaica, Costa Rica, Argentina, Chile, and Ecuador. Still, an important and growing part of their business is serving local South American enterprises such as Bogotá-based electrical grid provider Interconexion Electrica S.A., an example of a major player that relies upon Unisys for almost every aspect of its IT operation, from desk-side support and help desk to database and asset management.

Home Market Larger than the Global

Nearshore providers would not be wise to overlook rapidly expanding companies in their own neighborhoods. There is still plenty of business to be won from up north, but statistics show that as a whole Latin America’s growth rate will exceed that of the larger world economy with a projected 2013 rate of 4.2 percent, over 2012’s 3.4 percent, according to the World Economic Forum. This means that opportunities close to home should continue to outpace those originating further abroad. This holds true both for global firms like Unisys, as well as regional and niche providers.

Chilean and Colombian companies [especially] are buying companies in other countries and they are looking at us to provide those cross border services. We are present in most of the countries,” explains Beninatto. “When a company has to look for providers in each different country, this creates a mess for them. One of our clients has several different businesses in thirteen different countries,” says Beninatto. “If they had to look for multiple providers, they would have a mess.

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We provide a single set of metrics, SLA’s (Service Level Agreements), and points of contact to unify their operations across their operating companies and across national borders.” What are the keys to winning regional business? Don’t think it is only cost cutting. In Latin America, buy-side players are looking for performance. As markets host significant, but often smaller than traditional customers such as U.S. based firms, companies are more apt to look across borders for service provider centers of excellence. As Beninatto explains, “What we have experienced is that companies have gone way beyond what they should have in cost cutting, and what they are looking at now is quality of service.”

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