Q&A: PeopleOne’s CEO on the Expansion of LATAM-for-LATAM Outsourcing

Delivering on your promises goes a long way in the outsourcing market and if there’s one thing organizations demand from their technology service providers it’s that they stick …

“Today technology is seen as a commodity; what sets one provider apart from another is the quality of service provided,” says PeopleOne CEO Marciano Verdi.

Delivering on your promises goes a long way in the outsourcing market and if there’s one thing organizations demand from their technology service providers it’s that they stick to the terms of the contract. This is the key to consolidating your position on both a regional and global scale in the highly competitive IT services industry, says Marciano Verdi, CEO and founder of PeopleOne, a business providing outsourcing and IT managed services.

“Today technology is seen as a commodity; what sets one provider apart from another is the quality of service provided,” states Verdi, who has over 20 years experience working in the ICT industry. Born in Brazil but currently living in Mexico, Verdi is working hard to help PeopleOne become one of the businesses with the highest turnover in Latin America. To this end, he explained in an interview with Nearshore Americas, he has opened the business up to new investors and the acquisition of other companies, such as Informatech, a Brazilian software development business that has helped PeopleOne to develop its own technology.

Nearshore Americas: From your perspective what’s the state of the IT industry in the countries in which you operate?

Marciano Verdi:  In Mexico, prospects aren’t just good; they’re very good. Many businesses are experiencing growth, which has proven advantageous for businesses such as ours. Infrastructure support is really taking off within the country. People are becoming more and more aware of the benefits of subcontracting to outsourcing services.

On the other hand, in Brazil we are focusing on developing new technology. We started by using technology from third parties but a couple of years ago we made the decision to start developing our own technology, so the service desk services and the IT managed infrastructure services we are currently providing are managed using our own technology. This year there will be presidential elections in Brazil. We are aware that generally, when there are elections taking place, investments tend to slow down a little, due to the uncertainty of the political scene. But Brazil, as well as Mexico, has great potential when it comes to growth.

NSAM:  What are the main issues involved in setting Latin America up as a service provider to the United States?

MV:  Language was a significant obstacle for the longest time. The United States used to look to India for outsourcing services rather than to Latin America. The market sought to overcome this by focusing efforts on improving training and getting to know the North American market better. Now there are businesses that come directly to our market, without even considering going to other parts of the world. Latin Americans saw that they could do well in this market and started training staff to meet the demands of the United States market.

NSAM: As outsourcing personnel providers, are you able to find sufficient talent in the countries in which you operate?

MV: That is a daily challenge. We’ve come to see that we need to work hard to ensure the staff feel they are part of the business. Many employers focus on how to get the most out of the employee, without taking into account what is best for them, which results in workers having a negative attitude towards their organization. I have finally come to understand that this attitude gets you nowhere. At the end of the day, an employee will go wherever they’re paid best.

We do our best to attract talent that wants to grow with us. There are several initiatives when it comes to holding onto staff, such as, helping them to feel that they are part of the business, that they are listened to and that their efforts are recognized and appreciated. We host an event called the Performance Team on a yearly basis. This event aims to strengthen employee values, such as dedication, commitment and quality, among others.

NSAM:  How has outsourcing influenced the role of the businesses’ CIOs?

MV:  The large corporations are more open to this business model, as it frees the CIOs up to go where they are needed within the business without having to worry about the operation’s processes or support. I remember an IBM event ten years ago, where I heard a guru say: “Any business that doesn’t have an IT person on its board is doomed to failure.” And, now, more than ever, technology is involved in the business decision making process.

Moreover, the CIO should work closely with the business. If he has the option of subcontracting the operation (with agreeable terms),  it takes away all the stress of being responsible for operating a department that could require a lot of time and effort and frees him up to spend more time with the business itself. On the other hand, medium-sized businesses still do not fully understand the values of outsourcing. And these businesses stand to benefit the most – as outsourcing could help them go from a medium-sized business to a big business. It’s a cultural issue, but, with time we expect this sector to fully embrace this business model, as they are already showing signs of doing so.

NSAM:  Would you say this is happening in Latin America?

MV:  Generally speaking, yes. I believe that Brazil is a little further on than other countries, but they still took their time getting there. They had to go through their own maturing process. Today, big cities such as Sao Paulo, Rio de Janeiro, Bello Horizonte and Puerto Alegre are much more open to the idea of outsourcing. The same cannot be said for businesses operating in smaller cities.

NSAM:  What are businesses looking for in an outsourcing service provider?

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MV:  Mainly, that they stick to the terms of the contract. When it comes to a sales pitch, everyone is perfect – offering the best service, resources and quality.  But when it comes to delivering on what was promised, they don’t always live up to expectations. I have seen many businesses that have gone back to managing everything internally because they’ve had bad experiences with outsourcing.  I think that the biggest challenge is finding a truly committed ally. Technology is a commodity, what sets one business apart from another is the quality of the service they provide and the attention they offer.  So, if I fully understand that this is my client’s biggest concern, I have to focus on meeting their needs to the absolute best of my ability.

NSAM:  PeopleOne was founded in 2008. How would you describe the business’ progress since then?

MV:  Starting up a business in a foreign country experiencing an economic crisis was extremely complicated to begin with. But by being consistent and determined, as well as genuinely believing in the project we managed to weather the storm. Without wanting to offend, I’ve found that you don’t have to be brilliant to succeed in business in Mexico. You just have to deliver on what you promise: this goes a long way in this particular market.

We started the business in 2008 with four people operating from an office of 15 square meters.  Now, we have over 200 operating in Brazil, Mexico, Paraguay and the United States.  There is a saying, ‘it goes well for those who work well’.  I believe we can truly say that we do all we can to make sure things go well on a day-to-day basis so that we continue to grow.  There will always be external factors that have an impact on a business, and this is no less true for us –  you have to remember that some years are just better than others.  You have to keep your feet on the ground and work consistently on a day-to-day basis.

We have grown at quite an aggressive rate – over 100% in the first few years, mainly in Mexico.  The acquisition of Informatech (a Brazilian software development company) in 2012 helped with this. Growth depends on a variety of external factors, specific to the country in which we are operating. Informatech has helped us develop our own apps and to start manufacturing our own software.

NSAM:  Do you have any plans to expand?

MV:  We plan to expand according to our clients’ demands.  At the moment, we have a commercial operation in the United States, which, thanks to customer demand, we are planning to expand to include a delivery center in December. In Panama, we are working with a high-profile client. We plan to start operating within the country so that we can attend their needs more closely. We expect to commence work there at the end of the year. Obviously, this will help us to grow within the local market.

The challenge is establish the business among those with the highest turnover (on a regional scale) by the year 2020. I understand that this will not come about if we rely purely on organic growth. In 2012 I brought a group of investors to the business to help support the expansion process. We can sustain our organic growth, but we also hope to grow through new acquisitions.

We have quite an aggressive expansion project, and our aim, as a business, is to be able to offer clients a 360-degree service. In other words, if a client wants security, we assign them a security specialist, if they want to develop software, we assign them one of our developers: everything depends on the individual needs of the client.

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