Social Media Management Emerges as Sweet Spot for Latin America Outsourcers

The Latin America IT and software development community is starting to become a stand-out location for social media management. At least that’s the opinion of Michael Widjaja, who is a Senior Executive with Accenture in Europe, and a private investor. Widjaja, currently on paternity leave in Buenos Aires, spoke to us about how LatAm can leverage this unique positioning, and also offered a set of views on the investment climate in the region.

NSAM:  What trends are you seeing in IT developments in Latin America?

Widjaja: I see a lot of things. There has been tremendous growth in Latin America, but they are one year behind from Europe. There are two distinctions with web platforms: marketplace, social platforms, etc. tend to be more geographically specific. For example, www.choosa.net  is a platform for graphic design where small companies can post for local designers and designers can reply. This concept is already successful in the US and other parts of the world, but not in Latin America.

Another trend is usability and mobility – mobile devices, kiosks to check in at hotel, rental agencies, airports, tablets, the way we interact with technology is changing a lot.

The other part is the rise of social applications, and social marketplaces for resources. There is a big opportunity because social marketplaces are becoming very popular, especially social transaction platforms. We see a lot of benefit with Latin American resources. The design from US or Europe is much more solid, but the products from Latin America have more flavor and that is something companies are looking for as well.

NSAM:  What do you mean by “more flavor?”

Widjaja: In terms of the Latin American culture – it is warmer – you see it in the design, that is warmer, has more emotion, and companies are looking for those types of designs.

NSAM: What are some of the challenges providers face?

Widjaja: A lot of companies are providing services to the US but they are challenged on the operations level. Even though labor is cheap and the quality is good, they need the language skills. They are competing with India and China, and inflation is significant in Argentina. This is a risk for the guarantee of cheap labor. It is challenging to maintain a competitive position.

NSAM:  Where are areas of opportunity?

Widjaja: An increased amount of companies are using Latin American resources for social media. It is very resource intensive – facilitating discussions, posting the right content on blogs and discussion boards, setting-up the accounts and company templates – and you have to keep maintaining social media. A lot of companies are not aware how resource intensive it is.

NSAM:  How would a US company use a company in Buenos Aires to manage its social media strategy?

Widjaja: Just like any Offshore construction. The client needs to understand their strategy and the company in Buenos Aires will present ideas and implement.

NSAM: The Social Media Manager is becoming an important position.

Widjaja: Social Media Manager (SMM) is a very important position. What you do with social media is not a separate part, or an add on – it needs to be aligned with the overall strategy, it needs to be solidified. The position should be formalized within the company, but executing the ideas, creating ideas can be done in offshore locations. A lot of companies underestimate this strategic position.

NSAM: So, a company can hire the SMM to interface with the social media strategist who is offshore, or design a strategy first and then hire SMM to oversee the implementation and maintenance?

Widjaja: I have seen it done both ways. Some companies are asking for social media to be executed in specific markets, for example, one in Latin America, one in Europe and one in the US. They need people who are closer to the culture and language.

NSAM: What are some of the challenges IT developers encounter in Latin America?

Widjaja: The work can be done very well, but selling is very difficult. Do you need to put a sales force in Europe, or just employ a low level sales person there? Communications management is also a challenge. A part of it lies in the cultural interaction. Making sure you get the right specifications, and making sure the project is developed accordingly is important. The client specifies what they want, but not what they don’t want. The platform is developed to the specifics, it works, but doing things outside the box is challenging.

NSAM: What needs to happen?

Widjaja: Manage expectations, communicate better, describe the specifications clearly and make sure they are understood, implement proper sign-off procedures. The client needs to specify what they want to test. Everyone wants to get their solution up and running “tomorrow.” Make sure certain points are agreed and discussed. Governance needs to be looked at.

NSAM: Are you finding that companies are slow to implement an effective governance program?

Widjaja: Not specifically slow, it’s also a question of resources. They also have to stay competitive in the market, especially now with the higher salary range, companies are careful to hire people to get proper governance in place. It’s not always easy to say where the problem lies, but they do understand it is needed.

NSAM: What is the importance of Risk Management, and what are the main steps to an effective Risk Management strategy?

Widjaja: They are aware it should be done, but mostly since they are young companies, they are not always aware of how to manage it. Put a Risk Matrix in place, then identify and mitigate. I have seen cases where a company has developed a perfect Risk Management program, but they leave it in the cupboard for six moths. Situations change and specifications and people change, and it needs to be managed in that way. The Risk Matrix needs to be discussed with the client, and the client can be exposed to certain levels of risk. Otherwise, the company has to go back to client and ask for more financial means to support those activities.

NSAM:  Which industries are growing in the Outsourcing spend, and which ones are diminishing?

Widjaja: The travel industry is having a hard time. There is a lot of demand from the manufacturing industry. Social media is in demand from financial services, which are a bit more conservative. The car industry and entertainment also use social media. I haven’t seen that much with energy resources. I see government looking at social media and the Cloud, and more interest in SaaS.  But government is more cautious about data privacy and security.

NSAM: Where are the hotspots in Latin America?

Widjaja:  I know Argentina well, and know there are a lot of startups. Brazil is coming up with a lot of IT ideas, but I don’t see them reaching outside of Brazil. There is a lot of interest in the Cloud in Peru, Chile and Mexico. There is a lot of opportunity in Argentina; a lot of energy.

NSAM: What do Argentinean companies need to do to take their place in the global market?

Widjaja: Flexibility and agility are important. The world is changing quickly and Argentina is far from where the red-hot activity is happening. They need to adapt and understand the latest trends. If you just keep doing what you are doing, it’s not good for growth. Offer full solutions – measurable results that effect the bottom line. Argentina has a competitive edge, good labor, but it needs to keep moving on and adapting. The threats from India and China are still there.

NSAM: What type of support do there companies have?

Widjaja: I know there are financial programs for startups. Argentina wants to play a role in the technology world. The government supports and finances events; they are trying to build an incubating culture. There are also a lot of private initiatives. It is easy to establish a company here than it is in Europe. I’ve seen the government trying to jump on the IT wagon.

Editor’s Note: The thoughts expressed during our conversation are solely the opinions of Widjaja, and not those of Accenture.