Outsourcing: Blanca Trevino, CEO of Softtek (Part 3)

SM: How do you tackle this zero unemployment in your industry? That’s bound to create a talent war. How is the region coping with that? How do you propose to cope with that going forward?

BT: The thing is because of how deeply companies want to be part of this industry and offer services globally, some governments, certainly the Mexican government but also other governments in the region, are putting together initiatives to incentivize the industry. The universities are working very hard to have more time ready, offering different kinds of programs, not just the typical university four-year terms. Today, the zero unemployment is true, but it is also true that we see more of the universities working together with the governments, and companies like Softtek and many others are supporting those universities and understanding much better what is needed. Softtek is not just based out of one city as opposed to what happened in the beginning in India, for example. Bangalore became the city for this sort of thing. >>>

Outsourcing: Blanca Trevino, CEO of Softtek (Part 2)

SM: Actually, TCS (Tata Consultancy Services) has set up a major Latin America operation.

BT: They do. TCS probably is the Indian vendor that has the largest call center here in Latin America. They do have a strong presence in Brazil, and from Brazil, they support global clients. They won, a couple of years ago, some government projects here in Mexico. I don’t believe they’re working for the government here anymore. But I think – as opposed to what other Indian vendors look at when they look at Latin America – TCS was looking at the region not just to offer service from the region but also looking at the Latin American market. >>>

Outsourcing: Blanca Trevino, CEO of Softtek (Part 1)

Softtek is global company that provides its clients, which comprise top-tier corporations, with process-driven IT solutions. The company has office locations in North America, Latin America, Europe and Asia. The world has Softtek to thank for the creation of nearshoring, which involves companies outsourcing tasks to other companies that are located in nearby countries or accepting outsourced work from companies in nearby locations i.e., a U.S.-based company outsourcing its customer service responsibilities to a call center in Mexico or Brazil or vice versa.

Sramana Mitra: Hi Blanca. Let’s start with some context of your company. When did you get started? What kind of circumstances got you going, and what are you doing today? >>>

Outsourcing: Brad Heath, CEO of VirTex Assembly Services (Part 4)

Sramana Mitra: Would you talk a bit about the logistics challenges in shipping and so forth? Of course, there are energy prices and everything, but how has that changed? At some point, it made a lot of sense to manufacture everything in a local destination, and the logistics and shipping charges were not exactly big factors, but they seem to be becoming bigger factors. Would you talk a bit about the trends on the logistics side?

Brad Heath: I can talk to that to the extent that we see that. Obviously, we don’t see much of that in the high-mix, low-volume arena as you would in the high volume, but the piece we see that matters is the piece of, How long do you tie up in supply chain? If you have your supply chain all coming out of Asia and coming to the U.S., you tie up your money from the time that you initially wire the money to place the order, through the lead time of material, through the time of manufacture through the time of transit. That also precludes you from making a lot of changes to your design during that period. So, that logistics time greatly limits your flexibility in terms of what you can order, what you can change, and what you can improve or reduce the cost of in your product. >>>

Outsourcing: Brad Heath, CEO of VirTex Assembly Services (Part 3)

Sramana Mitra: Is Mexico the only Latin American country that is coming up in that near shoring trend?

Brad Heath: No. It’s the only one that we’re dealing with, but you’ve got stuff happening down in Brazil. You’ve got a number of others.

SM: Brazil is not easy to get to at all.

BH: It’s not easy to get to, but for the stuff that they’re trying to sell in that region … that’s one of the directions I think a lot of contract manufacturers as well as captive manufacturers are doing. They’re trying to build a product where the market for that product is. >>>

Outsourcing: Brad Heath, CEO of VirTex Assembly Services (Part 2)

SM: What are the repercussions of that?

BH: Well, we go ahead and work with our supply chain in the same manner, to minimize our risk and our liability. So, we’re not taking any risks that our customers aren’t taking, but we’re working with our supply chain to minimize that risk for our customers. There are certain things that if you buy them, you have to take them, and there are certain things that you don’t. If we can go ahead and get forecasted information, have that through a managed inventory programs with our supplier partners, we can minimize that risk for our customers.

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Outsourcing: Brad Heath, CEO of VirTex Assembly Services (Part 1)

We often talk about how much technology has done to make our lives easier and our workflows faster. When we do, we aren’t usually thinking about the ways that Austin, Texas–based VirTex uses technology to make their customers’ lives easier. From RFID tags to medical training equipment to solar power monitoring, VirTex manufactures all kinds of things, even equipment that help farmers operate at lower costs. Although the company is based in the United States and has a U.S.-based clientele, it ships products all over world.

Sramana Mitra: Hi, Brad. Let’s start with some context about you and your company. Where are you located? How long have you been around? What is your business, what is the scale, and so forth? >>>

Accenture Benefits from Very Strong Outsourcing Growth

According to research firm Information Services Group, for the quarter ended December 2011 markets saw strong growth in global outsourcing contracts. The total contract value (TCV) of contracts executed during the period grew 7% over the year to $26.4 billion. Growth was led by deals in the business process outsourcing (BPO) space and in the European, Middle East and Africa (EMEA) markets. The TCV of contracts in 2011 grew 3% to $95 billion, the biggest increase since 2005. EMEA markets helped drive growth as full-year TCV for the region grew 27% to $55 billion. By segment, BPO contracts grew 32% over the year to $29 billion for the year 2011. However, contracting activity within the IT outsourcing (ITO) segment fell 6% over the year to $66 billion.

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