Post on 09-Apr-2015
La empresa global de sistemas de México
Estrategias de Empresas Mexicanas en el ExteriorEncuentro Nacional PROSOFT 2.0
Mayo 2008
25 años de historia en América Latina
Pionero y líder de la industria Near Shore®
Acerca de Softtek
Mayor empleador privado de profesionales de TI del país
Oferta Proveedor global líder en servicios de TI y procesosSoluciones locales,
regionales y globalesCreador y líder de la industria Nearshore
Alternativa fuente al outsourcing desde India
Líder en América Latina
Presencia Sirviendo en Norte América, América Latina, Europa & Asia30 oficinas de venta y
operaciónPresencia directa
en 13 países8 Centros de Entrega Global
México, Brasil, España, China
Perfil Clientes Corporaciones líderes en los mercados en los que operamos>70% del ingreso con clientes recurrentes
6 organizaciones Fortune 50+100 clientes activos
Su Gente ~ 6,000 profesionales de TI“Great Place to Work” en Argentina, Brasil y México
Innovador programa de interfase con universidades
La más baja rotación para jugadores globales
Atendiendo clientes en 20+ países
En México
Entre las 500 empresasque más empleo generan
Mayor exportador de servicios de aplicaciones
La empresa con más centros globales en el país
Entrena al mayor número de profesionales de TI al año
Growth relative to the IT services industry
35%
10%
14%
11%
20%
14%
10%
2%
0%
46%
42%
39%
33% 34%
20%
10%
Softtek
World
wide I
T ser
vice
s (1)
Mex
ico (2
)
Brazil
(3)
Offshore
IT S
ervi
ces (3
)
Perot S
yste
ms
(4)
Accentu
re (4
)
Keane
(4)
CSC (4)
TCS (4)
Info
sys (4
)
Satyam
(4)
Wip
ro (4
)
Patni (
4)
Synte
l (4)
Covansy
s (4)
… anddomestic markets.
… and renowned North American
vendors.
Slightly below tier 1 Indian vendors, and faster than
most tier 2 Indian vendors
Outperforming the offshore
segment…Faster than the global market …
CA
GR
’04
-’06
Source: (1) Forrester(2) Select(3) IDC(4) Public Filings
0
50
100
150
200
250
83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 '00 '01 '02 '03 '04 '05 '06 '07
Start of Near Shore®
Services
Rev
enue
US
D M
illio
n
Acquisition of GE’s
Ddemesis
Softtek is Founded
Acquisition of China’s IT UNITED
Local Multinational Global
Phases of evolution
First International office (Peru)
Four people join the founder
Key learning period
Latin America is already seizing the Opportunity
Gartner - Cool Vendors in IT Services and Outsourcing, 2005
“Softtek represents a
unique combination of
being a formidable offshore service
provider and being the only non-Indian
vendor to pose serious
competition”
OffshoreServices
GlobalIT
Services
$18
$443
$587
$5524% CAGR
6% CAGR
2005 2010
Global IT Services Market ($ billions)
Note: Not drawn to scaleSource: JP Morgan with data from IDC and 2005 NASSCOM-McKinsey report
“An economic downturn in the U.S.
will increase demand for global services in 2008 as the Fortune 1000
seek to reduce costs”
NeoIT – December 2007
Why become a global service provider?
The diversification imperative creates an opportunity
Practicality
Reliance on one sourcing destination
Time zone and distance
Competition for talent
Currency appreciation
Geopolitical
94%of US companies
outsource IT domestically only
59%Cite management challenges as top
reasonRobert Half
CIO MagazineApril 1, 2008
Alternatives The right balance depends
on company specific needs Business drivers Risk policies Cost pressures Productivity targets Availability of resources Infrastructure Reliability Need for interaction and
communication Export restrictions Business culture affinity
Alternatives to India Brazil Canada China Eastern Europe Ireland Israel Mexico Philippines Russia Vietnam
Why Mexico?
Legal Framework in place (NAFTA) Geographical and cultural proximity Time zone No trips to the other side of the world Communication is enhanced Infrastructure in telecommunication,
power and transportation Low risk status Cost
Outsourcing Works, So India Is Exporting JobsSeptember 25, 2007
… In one project, an American bank wanted a computer system to handle a loan program for Hispanic customers. The system had to
work in Spanish. It also had to take into account variables particular to Hispanic clients: many, for instance, remit money to families
abroad, which can affect their bank balances. The bank thought a Mexican team would have the right language skills and grasp of
cultural nuances.
But instead of going to a Mexican vendor, or to an American vendor with Mexican operations, the bank retained three dozen engineers at
Infosys, which had recently opened shop in Monterrey, Mexico.
Such is the new outsourcing: A company in the United States pays an Indian vendor 7,000 miles away to supply it with Mexican
engineers working 150 miles south of the United States border. “
This is a buyers market
Buyers decide where to outsource
Providers respond(Infosys opened shop in Monterrey in October 2007)
Salaries stay in Mexico. Profit goes to India
Mexico is becoming a buyer’s choice
Some deterrents to consider Near Shore® Services
Cost Expectation of same cost as India/Philippines Countries have a different cost base Cost is competitive (in many cases more competitive than)
considering the Total Cost of Engagement Country perception
IT in Mexico? Is it scalable? Big internal demand has created seasoned talent pool IT graduates and financial industry consolidation has created more
talent available State and Federal Government support programs taking off
Misinformation Assumption that nearshore is the same as off-shore There are very tangible and practical differences Always consider the Total Cost of Relationship
Mexico as viewed by the analysts
Opportunity comes with challenges
Cost Alternatives have to remain competitive Consider total project cost, not only base
rates Quality
Certified (Six Sigma, CMM 5, PMI, SAS/70 .…) Mature methodology and processes Technologically savvy
Reliability On time, on budget & fully bilingual
Scalability
Softtek is LATAM’s largest private player…E
mp
loye
es
6,000
108,000
80,500
49,200
72,000
15,00011,700
16,000
Softtek TCS Infosys Satyam Wipro Patni Syntel Covansys
… but when compared to Indian playersa fraction of tier 1
half or smaller than tier 2
Emerging as a Global Player
Maintain sustained growth in Latin America
Providing global services from Mexico, Brazil & Spain
Softtek has successfully surpassed a series of challenges
Combining high quality & cost competitiveness
Strongly positioned to thrive in the new IT services landscape
Low mindshare amongst buyers
English speaking professionals in non
English-speaking countries
Strong internal market
Skepticism from industry and government in early
stages
Economic and political uncertainty
Lack of acquisition targets
Limited scale when compared to other regions
Outsourcing mindset just started to gain speed
Higher base costs than India
Lack of CMMi and Six Sigma resources in
LATAM
An unbalanced offer-demand ratio in LATAM
in spite of … in spite of … in spite of …
Differentiators
Global Delivery Model
Bring value to a wide range of engagements
Outstanding customer
experience
Corporate principles EntrepreneurshipSofttek’s Culture
Ability to perform
Strategic Vision
Focus on global competitiveness
Early-mover on global services in the Americas
A recurring client base
Strong partnerships
Beliefs
Value proposition
Fills a gap left by
India-centric sourcing
OutstandingCustomer
Experience
World-Class cost efficient
services
NearshoreOnshore OffshoreOnsite
Reduce Complexity of
IT Services Management
Globalize IT Operations
Optimize Cost
Support Business Evolution
Solid service features
Tangible value for clients
Key features of the model
Fills a gap left by
India-centric sourcing
OutstandingCustomer
Experience
World-Class cost efficient
services
Key features of the model
Fills a gap left by
India-centric sourcing
OutstandingCustomer
Experience
World-Class cost efficient
services
Focus on world-class competitiveness
Process maturity
Scale
Customer intimacy
Evolution through specialization
Strong ERP solutions capabilities
Cross-industry practices
Vertical focus Evolving BPO
practice
Longstanding customer centric
relations
Management involvement
Flexibility to meet evolving SLAs
Highly personalized
delivery model
Investing aggressively in key global-competitiveness elements
Strong local markets
presence
Ability to rapidly ramp-
up teams
Robust recruiting program
Globally competitive workforce
Organic + non-organic growth
Global Delivery Model
Near ShoreOn-site On-shore Off-shore
Total Cost of Engagement
Fully Loaded Rate
+
Fu
lly L
oad
ed R
ate
($$
$)
Offsite leverage(% of people working in a lower cost location)
Offshore
Softtek
Direct costs
Onsite costsOffsite costs
Indirect costs
Project OverheadAllocation Cost at Client Site
Attrition CostsConnectivity & Telephone
Transition & Knowledge TransferProject Trips
Relationship ManagementProductivity Losses
Risk Management CostsAttrition Costs
Increased offsite leverage allows a lower Total Cost of the Engagement
Key features of the model
Fills a gap left by
India-centric sourcing
OutstandingCustomer
Experience
World-Class cost efficient
services
Fills an existing gap
InteractivityRapid Response to Change
DiversificationSkills Availability
Multi-Language Support
Global Sourcing Gap
Global sourcing needs
Asia-centric sourcing
Near Shore® Features
NAFTA • Advantageous immigration regulations• Access to more visa types: E, TN, L, H1• Lesser impact of new regulations• Sound infrastructure• Strong intellectual property protection
Proximity • Importance of being close• Relationship management is easier• Seamless Project Tracking and oversight
Time Zone • Importance of working concurrently • Seamless interaction on iterative development projects,
short term projects or enhancements• Practical issue resolution
Cultural Afinity • Similar business culture• Business culture affinity facilitates day-to-day team
integration
Cost Advantages • Significant lower rates than the US• Lower communication & infrastructure costs• Lower Indirect Costs than offshore model
Explicit arguments
4 Hour Flight
Through this Model we have achieved 80% Near Shore,20% Onshore Ratio in projects
Near Shore® Features
Lower RiskFewer risks to business• True complement to a single-country strategy• Lower geopolitical risk• Fewer immigration restrictions• Lower currency fluctuations
Diversification Support diversification strategies• Lowers single-country risk• As the Americas service center• As a component in a right placing strategy
Lower TCE Lower TCE (Total Cost of Engagement)• Less overhead than offshore• Lower communication costs• Lower indirect cost than India
Non- Explicit arguments
Evolution of global delivery model
Time
Value
Fill the gap left by India
Total Cost ofEngagement
ProductivityGains
Global Nearshore
1996 2001 2003 2006
•Same time-zone•Similar day-to-day culture
•Short flights•Trade agreements
•Lower indirect costs
•80-100% leverage of nearshore
•Low attrition
•Mature quality model
•Digitized processes
•Domain expertise
•Outstanding customer experience
•Follow the sun
Building strong capabilities from Mexico has and will continue to be key
Softtek Global Nearshore™ Model
North AmericaAguascalientesEnsenadaMexico CityMonterrey
South AmericaPorto AlegreSão Paulo
EuropeA Coruña
AsiaBeijing
Near Shore® Delivery Centers
Allows follow-the-sun solutions
Key features of the model
Fills a gap left by
India-centric sourcing
OutstandingCustomer
Experience
World-Class cost efficient
services
A Great Customer Experience
Business Value Experiential Value
Two Components
Quality
Skills
Cost
Person’s Needs & Wants
Lifestyle
Cultural Affinity
Tangible Intangible
Both Components impact our client’s bottom lineProductivity, High Customer Satisfaction, Cost Efficiencies, Faster ROI
Self Assessment of Business Value Promise
• May not be enough:– Sophisticated
customers are big commoditizers of value
– Tier 1 India firms are opening Near Shore operations
– More Mexican firms may enter the global market (and we want them to!)
– “The world is flat”
• It is a great starting point:– We are the “Near Shore
niche” leaders– “Rightplacing” is the next
wave– Newcomers will play “catch-
up”– Our Near Shore Model is a
Global Delivery Model
Business Value alone warranties competitiveness, differentiation comes from Experience Value
Our promise
Improve our Customer’s Working Lives
Softtek Experience lifecycle
Analyze Experiential World of the Customer
Design the Experience
Structure the Customer
Experience
Build the Experiential
Platform
Experiential Innovation
•Improve our customer’s working lives
•Sociocultural context of the individual (needs/wants/lifestyle)•Analyze Business Concept (requirements/solutions)
•Connect between strategy and execution•Specify the value the customer can expect from the experience (EVP=Experiential Value Promise)
•Identify Customer’s needs•Personalize our interaction
•Dynamic Exchanges and contact points with customers•Focus on Intangible elements (Value, attitude, behavior)
The elements of our experiential value
1. Built on the elements that have made us thrive
2. A platform that specifies the value our customer can expect
3. Continuously innovate to maintain the edge
Experiential Foundation
Experiential Platform
Experiential Innovation
Experiential FoundationG
eo
polit
ica
l
Me
xica
n H
um
an
C
ap
ital
So
ftte
k’s
Cu
lture
Proximity NAFTA Stability
Day-to-day Culture
Ingenuity FriendlinessExpertise
Familiarity
The Human Element
Quality Oriented
EntrepreneurialO
ur
Pe
ople
Support
SkilledFocused on Customer
Passionate about their
role
Experiential Value PromiseE
xper
ien
tial
F
ou
nd
atio
nE
xper
ien
tial
P
latf
orm
Inside-out Outside-in Inside-in
Exp
erie
nti
al
Inn
ov
atio
n
Improve our Customer’s Working Lives
Geopolitical
Mexican Human Capital
Softtek’s Culture
Our People
Maintain High-TouchUnderstand our
Customer’s Context
“The ‘value added’ for most any company, tiny or enormous, comes from the Quality of Experience provided”
Tom Peters
La empresa global de sistemas de México
Estrategias de Empresas Mexicanas en el ExteriorEncuentro Nacional PROSOFT 2.0
Mayo 2008