Nearshore Americas

Grupo Assa’s Argentina Roots Expand Deeply into Brazil

By Filipe PachecoFor Grupo Assa,  the old traditional (and stereotyped) rivalry between Brazil and Argentina is strictly kept to the soccer field. Grupo Assa, specializing in IT consulting and outsourcing, was created in 1992 in Argentina, but Brazil is the country that is now responsible for more than half of the company’s revenue.  The group recently announced plans for a second delivery center in Sao Paulo, scheduled to open in the second half of of this year.

The company anticipates 35% revenue growth in Brazil this year, but what is the rationale for targeting São Paulo? “Because we are expanding to where our clients are. Even though the city is considerably expensive, it is worth it for us to grow here,” explains Marcio Caputo, Vice-President of the group in the country.

Currently Grupo Assa has operations in another location of the city of São Paulo (Chácara Santo Antônio) and Curitiba, which provide services to about 10,000 users in the country. The company’s 2008 revenues were around R$ 85 million (US$48.6 million), an increase of about 38% compared to last year.

“We are a Latin Group, it is not fair to say Grupo Assa is a company from Argentina. We are Latin, operate in Latin countries and have Latin clients”

Rooted in Latin America

Outside of Brazil, Grupo Assa also has operations in DF, Mexico, and in Tandil and Buenos Aires, Argentina. The whole group has clients in 30 different countries, and had revenues of US$105 million in 2011. Besides the new delivery center in São Paulo, which will provide about 100 jobs to start, the firm also in the plans to simultaneously open a similar one in Cape Town, South Africa.

Even though the city of São Paulo is one of the most expensive places in Brazil to settle (or expand), Caputo reasons that it is important for the group to grow in the city and the region that is the economic heart of Brazil, and where it finds the best infrastructure available.

“Currently, about 70% of the domestic earnings are derived from clients we have had for more than two years. We know how important it is to keep them,” he says. According to Caputo, clients in Brazil are divided basically into three categories: 1) multinationals that have operations in the country, such as Johnson & Johnson, KraftFoods, Electrolux and so on; 2) Latin American corporations that have expanded to different regions, such as Vale and Camargo Correa; 3) local national clients, like the retail chain Lojas Marisa.

“We are a Latin Group, it is not fair to say Grupo Assa is a company from Argentina. We are Latin, operate in Latin countries and have Latin clients,” emphasizes Caputo. He uses the operations in Brazil as a clear example – in twelve years, the revenues in the country top those of the company in the region, followed by those in Mexico, then in Argentina and Chile, respectively.

SAP and Oracle

Recently the company announced a strategic partnership with SAP to offer financial services from Argentina, Chile and Mexico to clients across the region. The main products offered permit the interconnection between front office operations and back-office systems.

The whole group offers application management services to more than 40,000 final users of SAP and Oracle J.D. Edwards in different parts of the world. Among the global clients are AstraZeneca, Pfizer, Kraft Foods, PepsiCo, Bayer and Amcor Rigid Plastics.

Brazil, according Caputo, will remain strategically vital the firm’s overall growth. For him, the challenges the providers faces are similar to those confronted by the entire industry when operating in Brazil – basically lack of professionals, infrastructure and high costs. “But what we have to consider the most is how to attract and to retain our clients; that is something bigger than anything else. I cannot make mistakes with my clients.”

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