When HP announced that one of its six big global hubs would be in Costa Rica, we wondered what that sizable investment would mean for its outsourcing operations in another Nearshore nation. Would Costa Rica’s gain be Argentina’s loss?
Well, to malappropriate from the Broadway musical version of former First Lady Eva Perón, Argentina requires no crying. HP officials say the country will continue to play a significant role in their regional strategy but will also get a bigger piece of the global pie; in fact, its role is likely to grow as long as business continues to grow.
“In the outsourcing space, HP has always positioned itself as an end-to-end service provider, with focus on the large enterprise segment,” says Marcelo Kawanami, Frost & Sullivan research analyst, Latin America ICT. Looking at it from that perspective, Argentina locks nicely into the company’s round-the-world coverage plan for several reasons.
First, the country’s IT workers have established expertise in several key enterprise areas, most notably transportation and finance. Airlines send a lot of work there. HP Argentina’s centers tend to focus on application testing, maintenance, and development, but also provide some BPO and infrastructure services.
Second, HP Argentina has an established roster of clients. “We serve 50 clients out of Argentina, an anchor group whose business we have continued to grow,” says Jeff Womack, VP of Best Shore Enablement within HP’s Enterprise Services group. “It doesn’t make sense to move that work to Costa Rica or any other place because of the base of knowledge, the client knowledge, not to mention the relationships we’ve built up over the past few years.” Those relationships involve national and local governments as well as several universities.
The EDS influence
Further, HP acquired a huge enterprise presence in Argentina when it acquired EDS, which had a couple thousand people working in the country. “HP did a great job integrating EDS with its services portfolio,” Kawanami says. “The post-acquisition work was very well managed and a core focus for the company during the last couple of years.”
It sounds like HP Argentina will be taking on more work in other Latin America countries. Womack mentioned Peru, Uruguay, Paraguay, and Chile. And with Argentine employees proficient in Portuguese, they can also serve clients in Brazil and Portugal.
That fact brings up another part of HP’s intentions for its centers in Argentina: to deliver more services globally—or at least more services to the U.S. and Europe, Womack says. Argentina will also take on work from HP’s farshore centers when it makes sense.
“We can render services in English, French, German, Italian, Portuguese, of course Spanish, and several other languages.”
Besides the requisite IT skills, Argentines have a knack for languages that gives them an advantage. “Languages are part of our heritage because Argentina is a country of immigrants,” says Diego Schargorodsky, HP’s director of operations for enterprises services in Cordoba. (He offers his own surname as exhibit A.) “We can render services in English, French, German, Italian, Portuguese, of course Spanish, and several other languages.”
Argentina can also exploit the time zone. “When you work in applications testing and maintenance, being able to hand over work every 12 hours is one of the keys to being effective for clients,” Schargorodsky says. “But in order to do that successfully, it helps to be able to communicate with your partners throughout the day. We could not do that if we were in China,” he says.
“Argentina is just three hours ahead of Dallas,” Womack adds.
Cordoba, global player
HP now has facilities in three main locations in Argentina: Buenos Aires, Rosario, and Cordoba. While Buenos Aires is the bigger market, Cordoba looks like the rising star, a growing software hub (and fifth on the Nearshore Americas list of Leading IT Cities in Latin America). In December, as part of its $1 billion worldwide investment program, the company opened a new delivery center in Cordoba, its seventh in Argentina. “As part of this expansion, Cordoba will have more capacity to support regional and global clients,” Schargorodsky told us. (He heads the Global Services Center in Cordoba.)
About 900 people currently work for the Cordoba operation. HP expects that number to grow by 500 or so in the next year-and-a-half.
During the ceremonial opening of the new facility, HP paid recognition to employees who have entered its postgraduate scholarship program. This is part of HP’s effort to deal with what Schargorodsky says is one of the company’s biggest local challenges: intense competition for IT talent.
To incubate tech skills, HP has set up different programs with the universities in the region, including one “that allows students to join the company and have a real job experience before graduation,” he says, and one “to encourage students to enter technology and engineering careers, because we need those skills to perform our activities.”
Local and federal governments will have to step up as well if the country is to compete with the likes of big Brazil for large, lucrative contracts.
Meanwhile, Womack describes the Argentina proposition thus: “Deep industry expertise in strategic verticals, like finance and transportation. Strengths in essential domains, like applications management and development. Caliber of talent is phenomenal. Plus, language support and time zone, which means we can support North American and European clients. On that last point, Argentina is recognized as being compatible with U.S. and E.U. standards.”