The recent merger of Allus and Contax builds a new giant in the Nearshore BPO and contact center business. The combined operation employs 120,000 people and will provide services in Argentina, Colombia, Peru, Spain, the United States and Brazil. That last country is definitely a bonus for Allus.
CEO Jose Romero talks about the new union, what’s in store for contact centers, and the opportunity offered by social media.“Allus has a huge presence in Colombia and several other Spanish-speaking countries, but this deal helps them move into one of the fastest-growing economies in the world,” says Peter Ryan, lead analyst covering the contact center and BPO industry for Ovum. “It’s a good deal. And for Contax, which operates in a few different countries but is seen as a Brazilian company, they are now in a position to expand their frontiers.”
“Clients will benefit from these two firms merging their best practices,” Ryan tells Nearshore Americas. “These two companies will be able to optimize their ability to serve customers.”
This deal really reflects the competitive nature of Latin America from a domestic standpoint, Ryan says. “The call center space will be seen as not just an offshore play but a Latin America play. There’s an increasing appetite to go after Latin America from Latin America and not just offshore.”
We talked with one of the key players in the new entity—José Romero Victorica, CEO of Allus Global BPO Center—about the deal, what’s ahead for the BPO business (think social networking, he says), and his current “daily difficulties.”
Q. What is the significance of the deal between Allus and Contax?
Romero: It represents nothing more or nothing less than the union of two large, leading companies in their respective markets: Allus is a leading company in the Latin American contact center and BPO industry, and Contax is the largest in that sector in Brazil. Together, we create a leading multinational contact and BPO provider with 120,000 employees, positioning in six countries, and the capability to provide services in three languages: Spanish, English, and Portuguese.
For Allus, this union reinforces and accelerates the internationalization strategy to strengthen our position as a leader in Latin American contact center and BPO services to provide more support to our partners and greater service to our customers. It represents access to the Portuguese speaking market, a market provided for in our strategic plan. Allus becomes stronger by joining with a company of nearly 85,000 staff and that leads the industry in Brazil, a country of 190 million inhabitants. We also gain access to a new and rich culture. The big challenge is managing that many people and processes on such a large scale.
For Contax, this merger accelerates and reinforces its expansion process by joining with a company located in five countries. It gives Contax access to the rapidly growing Spanish and English speaking markets, and to a large quantity of top-quality English and Spanish speakers.
It also allows them to work with a new culture, with new ways of thinking and doing business. This is indispensable to succeed in today’s cross-cultural world. Contax no doubt appreciates and understands Allus’s slogan: ‘Innovation, creativity, and knowledge for the world’s new economy.’
Q. What does the deal mean for clients?
Romero: Clients will be able to take advantage of our broader service offerings and will benefit from our combined best operational practices. They will also have access to services in English, Spanish, and Portuguese.
Q. How did the agreement with Contax come about?
Romero: Allus has characteristics that attracted Contax and would allow them to ensure their expansion in Latin America. Among those characteristics are presence in Argentina, Colombia, and Peru, countries with attractive opportunities given the availability of human capital, competitive costs, convenient time zone, and a favorable regulatory framework. These places are strategic for the operations of Contax in Latin America. Allus also offered a sustainable model of business, sound management, and a history of growth and profitability. By offering offshore services for the market in Spain and the United States, with special focus on global customers, Allus represented an opportunity for Contax to diversify its business activities.
Q. Will we see Allus moving into new locations in the coming year? Further expansion in the United States?
Romero: We are always looking for new places and new markets. That’s one way to create value for our employees, customers, shareholders, and society. Today the US is one of our favorite markets, and we see great opportunities there. Allus has many customers in the US who have placed their trust in us, and our strategy is to continue to grow in that market.
Q. What trends or developments do you think we’ll see in BPO in the next couple of years?
Romero: BPO companies have an opportunity to take on more processes than they handle today. The challenge they face is to become an extension of the company they serve. BPO providers will offer important advantages such as reducing costs, allowing the client to focus on its core business instead of processes, and giving the client access to best practices. The sector will continue to see global growth.
One important factor driving that growth will be the spread of social networking and social media. We have two clients in Argentina, one in Peru, and two in Colombia with whom we are working on these types of services, which seem to be under the orbit of contact centers. I believe that contact centers must adapt to these new ways in which customers are communicating and interacting. Businesses must be aware of what their customers are saying, thinking, and needing, and so contact centers must work within these new channels. Remember that this industry was born to make sales, then began to face customers via chat and e-mail. So now contact centers must adapt to the new mechanisms through which people express themselves.
Q. In our profile of you for the Nearshore Americas Power 50 list of most influential executives, you said that one of the keys to Allus’s success is being able to “overcome daily difficulties.” What daily difficulties are you dealing with these days?
Romero: The difficulties depend on the reality of each country and each context. Today Argentina is in a special stage compared to other countries that export services, because it is losing competitiveness due especially to wage inflation. This is one of the difficulties that demands more energy because we want to continue growing in Argentina. It has human capital of high quality—some of the best in the region—and in addition has a lot of expertise and industry know-how. We believe these difficulties are temporary, so we are committed to Argentina. Meanwhile, in Colombia and Peru, the reverse situation is true.