Outsourcing: Ankur Prakash, Vice President And COO, TCS Latin America (Part 3)

By Sramana Mitra and guest author Aditya Modi

Sramana: And how big a factor is language in your work in Latin America?

Ankur: For global customers, all the people whom we recruit are bilingual, so more than 90% of the people are bilingual. We ensure that all these employees are continuously in touch with the English language. We keep employees who are not working for global customers trained in the English language conducting classes. We have full-time teachers in foreign countries which help employees with language skills. This is so that whenever there is a need to transfer one employee from one client to another client working for a different project, they will not find any particular language a barrier. We ensure that the training is done; that they are kept abreast of necessary skills that are needed for working in English. And of course, the locals speak Spanish or Portuguese without any problem.

Sramana: Of the 200,000 graduates coming out from universities every year across Latin America, what percentage of them is bilingual, English, Spanish or Portuguese?

Ankur: I think if you take across Latin America, it should be anywhere between 30% and 35%.

Sramana: You mentioned the entrepreneur mindset and the fact that there are 3,000 companies across Latin America that have fewer than50 people; you hire a lot from that population. Now, typically the startup mindset and the large company mindset are different, so would you comment on this? In Silicon Valley, for example, there is a large population that is not really interested in working with big companies. They go to work for startups because they want to work for startups. Would you comment on those dynamics?

Ankur: I believe that to run a company successfully, whether you are part of a big company or a startup, at the end of the day you have to get the fundamental things right. If you don’t, you are going to suffer. So at the end of the day, if employees see more value, if the employees see a better career for themselves, if employees see that they can better contribute in some other place, they will definitely move either from startups to big companies or from big companies to startups. We ensure the inflow of fresh graduates because that has been a successful model for us across the globe. So, we have that particular model in Latin America as well. And we attract experienced professionals by giving them the opportunity to work with a global workforce, to be trained in the U.S. and in India, to work with global customers, to work with the market leaders within Latin America. With all these things combined, we are in a much better position to attract talent.

Sramana: Would you please talk about the core structure of Latin America? We know that over the past 15 to 20 years the cost differential between the U.S. and India has changed. The ratio used to be 1:10; now, it is gradually shrinking, and now, it is somewhere between 1:5 and 1:3. What’s the cost differential while comparing with the Latin American market, based on your experience with the numbers that you are doing? Also, what is the cost advantage you are able to provide to Latin American customers working out of Latin America?

Ankur: I will take the last question first. As for the Latin American cost advantage, cost arbitrage, I don’t think that any company that works just on cost arbitrage in Latin America can provide any kind of value additional and advantage to local customers because there will always be one company in which it can offer the same kinds of services at a much lower price than another. It is important to have a cost-effective model in front of customers, but I don’t think it is sufficient. Just by having cost effective models, you will not be in a position to get a project or win an outsourcing deal. So, we bring value to the customer by being cost effective in terms of staying within the budget they define. More important, we bring in the global expertise, we bring in the global network delivery, we bring in value-adds such as CMMi Level 5 in services, CMMi Level 5 in development, and so on. We bring in those kinds of values, and we bring in security, standardization, and uniformity in project execution. That’s how we get results in Latin America and in other parts of the world.

The other thing, the costs of Latin America compared with those of India and the U.S. We cannot make a generalized statement because each country is different in terms of its economy, its growth, and its cost structure. Brazil is largest economy in Latin America and the fastest-growing economy in the region, but it is also one of the costliest economies in the region. If you want to compare Brazil with other parts of the world, I think Brazil would be on par with any of the cost structures you might have observed in other parts of the world. But if you do an average comparison, I would say that Latin America, compared to the U.S., is approximately 50% to 60% of the cost.

This segment is part 3 in the series : Outsourcing: Ankur Prakash, Vice President And COO, TCS Latin America
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