Wipro has continued its aggressive surge into the BPO world by announcing plans to open a BPO delivery center in Curtiba, Brazil, to service it new client, AmBev, the South American bewing giant, and subsidiary of global brewing giant InBev. InBev recently had its merger with Anheuser-Busch approved to create a global beer monolith – not a bad industry to be developing your outsourcing business, in this economy (to quote a CIO at a major brewer recently: "we love the good times, but we REALLY LOVE the bad times"…)
Following on from Capgemini's agreement to take over Unilever's South American BPO operations, we are clearly seeing signs – as we discussed last year - that Latam countries have great potential for delivering BPO services, such as finance and accounting and HR, in addition to supporting IT engagements (particularly with the legacy development skills that have sprung out of the Latam financial services sector). This latest development further augments the discussions that the leading outsourcing providers see Latam as a major addition to a global delivery framework, especially when you consider the investments Accenture, Genpact, IBM, Infosys, TCS and others have also been making in Latam resources.
Moreover, this announcement follows on from several major recent BPO wins from Wipro, which has been performing a stellar job taking on multi-tower BPO services for a number of global clients across finance, HR, customer care and some industry-specific domains.
Posted in : Business Process Outsourcing (BPO), Captives and Shared Services Strategies, Finance and Accounting, HR Outsourcing, IT Outsourcing / IT Services, Sourcing Locations
I agree with your point of view that Latin America is becoming the new destination for outsourcing. I see a lot of potentials the region cater to US and Western Europe in process areas of F&A, HR, Healthcare and Supply Chain. There is a high possibility of Indian pure play BPOs and IT driven BPO setting shops in Latin American to get edge over each other and win clients in the region and from US and West Europe.
Though the per seat net profit is yet to be attractive, but winning new clients and being the news is also important. The region also allows lot of US corporations to reduce their travel time to India or Philippines.
To conclude proven BPO companies are increasingly used to various skill sets, they would take some time to develop this in the region and till that time will have to source resources from India to run and manage the operations. There is tremendous long term gain.
Glad to see this deal featured on Horses. I have been covering this deal (http://novasphereblog.com/2008/10/31/wipro-makes-big-move-into-brazil/) and other LatAm opportunities and features on my blog, and I think the region is ready to really play in global services.
Hoepfully Wipro’s involvement reframes the discussion as “truly global services” instead of to “country x vs. India” While those comparisons are instinctive and hard to resist, I believe that the industry should seek to complement, enhance, diversify and otherwise de-risk by moving into LatAm (and other newer destinations). In other words, the pie can be grown. And it shold be.
Gents – good comments here.
I do believe we’ll see more BPO investment in the Latam region to service Latam businesses – and the Latam geos within globals; the seeds are definitely being sewn across the region. However, investment is going to be slow in the current climate,
While the capabilities of finding good quality talent with multilingual skills is compeling, especially the overlap with US timezones, I do believe the current economic and political climate could drive service providers to look more at the US mainland for future service delivery investment, especially with further expected layoffs and Obama’s clear intention to discourage firms to use non-US delivery resources. You can be sure service providers are sensing some attractive investment opportunities for BPO centers, but I do expect many investment plans are being put on hold for the next couple of months as providers wait and see how the economic climate plays out,
As the offshore market continues to evolve, Brazil appears to be well placed to compete. It won’t provide the lowest prices, but in an increasingly sophisticated marketplace, this is no longer the only assessment criteria. Brazil has a mix of capabilities that, in particular, position it to provide nearshore services to the US. It also has the beginnings of a track record in ITO and BPO. It appears unlikely they’ll ever displace the current market leader, India, but by the time of the next World Cup in 2010, Brazil may well be one of the leading runners up. -Jaime-