BRQ Founder: Brazil Players Need to be More Competitive Globally

The company was founded in 1993, in São Paulo, by Benjamin Quadros, who also gave it his initials. BRQ provides outsourcing solutions to different application segments (including CRM, BI, and ERP) but has focused much of its operations on the financial sector — “no doubt the most developed area we have in IT in Brazil,” Quadros says.With development centers in São Paulo, Alphaville, Rio de Janeiro, Curitiba, Fortaleza and Brasília, the company has about 2,700 employees and is among the leaders of the segment in applications outsourcing, with earnings of R$250 million (US$146 million) and a steady rhythm of annual growth of about 30% in the past few years. Research firm IDC rated the company second among applications providers in Brazil in 2010.

BRQ’s client list includes big names such as Petrobras, GM, Bradesco, HSBC, LG, NYSE Euronext, Carrefour, and Telefonica. Among its technology partners are IBM, Microsoft, Oracle, and Adobe.

In a recent interview, Quadros talked about how difficult it is when it comes to competing for the offshore market with India; how important the domestic market is for the company in the near term; how the company has its eye on the oil & gas sector; and how the World Cup and Olympics will eventually mean more investment in IT by BRQ’s clients.

A Different Model from India

It is not easy to compete with India when it comes to attracting offshore clients, Quadros says. That’s because India has already consolidated itself as a natural provider of IT and BPO services, and has established a whole local and international structure to support that, while in Brazil a lot of regulations and customs that get in the way still need to be removed, he says. Changes in public policies will have to happen in order for Brazil to compete effectively.

Quadros says he welcomes Plano Brasil Maior as a good demonstration of efforts to make Brazil’s technology segment more competitive with other countries, “but the main challenge now is to make the plan live for more than one year.” The measures included in the program are currently written to be valid only until the end of 2012.

“We, the Brazilian companies, need to show ourselves as being competitive, otherwise the clients are going to seek options in India or China,” he says.

This requires changes to the way Brazilian IT workers operate as well. According to Quadros, Brazilian IT professionals are used to thinking in a more global way than their counterparts in India, and they tend to have a better understanding of the whole process of the service they are providing, but in India IT workers are much more focused on their programming functions and specific development tasks. Brazilians get the big picture, but they don’t always know the right programming formulas for different procedures off the top of their heads, he says. “In India, a programmer knows everything he needs by memory,” Quadros says. “Here they don’t, but they know exactly where to look for it.”

Unlike India, where the outsourcing industry has been mainly supported by offshore clients, and unlike China, where the government is the main client for everybody, Brazil has a good balance of both segments: private clients and public institutions.

Priority: Brazil

In 2008 BRQ bought an American company, ThinkInternational, which was its first acquisition abroad. But at the same time, the financial crisis started, and doing business in the U.S. and other foreign countries became much harder. “That is why we still consider the Brazilian market as a priority in the short term,” Quadros says.

Even though the acquisition of Think was extremely important for the company`s positioning outside Brazil, Quadros says right now that BRQ’s focus is more on the domestic market than anywhere else.

“Our priority for merger and acquisition activity is in Brazil,” he says. “We still have the mentality to expand abroad, but the financial crisis has not been easy. In Spain, for example [where BRQ has an office], it is not easy to grow while the whole economy is shrinking.”

Unlike India, where the outsourcing industry has been mainly supported by offshore clients, and unlike China, where the government is the main client for everybody, Brazil has a good balance of both segments: private clients and public institutions. “We have a mix of a mature industry and a strong government sector,” he says.

Ahead: Oil & Gas and Sporting Events

Quadros considers one area in particular to represent a source of strong growth potential for BRQ: development of applications and services for the oil and gas industry. That sector has been developing quickly in Brazil, especially in the state of Rio de Janeiro. “Petrobras [the Brazilian giant of the oil industry] itself invests R$200,000 [US$117,000] a day in research and development, and now they are establishing funding plans for the companies that provide services for them, particularly transport and logistics. It is a great opportunity for us,” he says.

Another part of Brazil to keep an eye on is the Northeast, he says, a region that lacked investments in the past few decades and that has plenty of opportunities of growth.

The two biggest sporting events in the world, which happen to be taking place in Brazil starting in 2014, have not yet been a direct financial boost for BRQ or the local IT segment as a whole, Quadros says. But earnings will come indirectly and soon, he says. “We are going to see more and more growth on the part of our own clients, and all of them will invest in IT to generate agility and produce more with less.”

This article originally appeared in Sourcing Brazil